Document:

ex1022-10ka2007.htm

    
 

    Exhibit
10.22

    

    [Cooper
Cameron Building]

    

    

    

    

    

    

    

    LEASE
AGREEMENT

    

    

    between

    

    BELTWAY
ASSETS LLC,

    a
Delaware limited liability company,

    

    as
Lessor,

    

    and

    COOPER
CAMERON CORPORATION,

     a
Delaware corporation,

    

    as
Lessee

    

    Dated as
of

    

    November
19, 2002

    

    
      	
              APPENDIX

            	
              1

            	
              Definition

            

    

    
      	
              SCHEDULE

            	
              A

            	
              Desription
      of Land

            

    

    
      	
              SCHEDULE

            	
              B

            	
              Lease
      Data

            

    

    
      	
              SCHEDULE

            	
              C

            	
              Certain
      Definitions

            

    

    
      	
              SCHEDULE

            	
              D

            	
              Permitted
      Encumbrances

            

    

    
      	
              SCHEDULE

            	
              E

            	
              Trade
      Fixtures

            

    

    
      	
              SCHEDULE

            	
              F

            	
              Subordination,
      Non-Disturbance and Attornment
Agreement

            

    

    
      	
              SCHEDULE

            	
              G

            	
              Estoppel
      Letter

            

    

    
      	
              SCHEDULE

            	
              H

            	
              Description
      of Excess Land

            

    

    

    
      
         

      

      
        
          

        

      

       

    

    THIS
LEASE, dated as of the date specified in Item 1 of Schedule B (as
amended from time to time this "Lease"), between the Lessor
specified in Item 2 of Schedule B ("Lessor"), having an office
at the address set forth in Item 2 of Schedule B and the
Lessee specified in Item 3 of Schedule B (herein,
together with any Person succeeding thereto by consolidation, merger or
acquisition of its assets substantially as an entirety, called "Lessee"), having an address
at the address set forth in Item 3 of Schedule B,, both
parties intending to be legally bound.

    

    
      	
               
      

            	
              Capitalized
      terms not otherwise defined when they first appear are defined in Appendix
      I.

            

    

    

    
      	
              1.  

            	
              Demise; Title;
      Condition.

            

    

    
      	
              2.  

            	 

    

               
(a)            Lessor
hereby leases to Lessee, and Lessee hereby leases from Lessor, subject to the
terms hereof, all of Lessor's right, title and interest in the Leased
Property.

    

               
(b)            Lessee
has examined the Leased Property and Lessor's title thereto, and has found the
same to be satisfactory. Lessee shall in no event have any recourse against
Lessor for any defect in Lessor's title to the Leased Property or any interest
of Lessee therein.

    

               
(c)            LESSOR
LEASES THE LEASED PROPERTY TO LESSEE IN ITS PRESENT CONDITION, AND LESSEE
ACCEPTS THE LEASED PROPERTY "AS IS" AND "WHERE IS", AND LESSOR MAKES NO
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE LEASED
PROPERTY OR THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR
USE FOR A PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, OR AS TO QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN OR ENVIRONMENTAL CONDITION THEREOF; AND
ALL RISKS INCIDENTAL TO THE LEASED PROPERTY SHALL BE BORNE BY LESSEE. LESSOR
SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT TO ANY DEFECT OR
DEFICIENCY OF ANY NATURE IN THE LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER
PATENT OR LATENT AND LESSOR SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY FOR
ANY DIRECT OR INDIRECT DAMAGE TO PERSONS OR PROPERTY RESULTING THEREFROM OR FOR
LESSEE'S LOSS OF USE OF THE LEASED PROPERTY OR ANY PORTION THEREOF OR ANY
INTERRUPTION IN LESSEE'S BUSINESS CAUSED BY LESSEE'S INABILITY TO USE THE LEASED
PROPERTY OR ANY PORTION THEREOF FOR ANY REASON WHATSOEVER. THE PROVISIONS OF
THIS PARAGRAPH HAVE BEEN NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION
AND NEGATION BY LESSOR OF, AND LESSOR DOES HEREBY DISCLAIM AND LESSEE DOES
HEREBY WAIVE, ANY AND ALL WARRANTIES BY LESSOR, EXPRESS OR IMPLIED, WITH RESPECT
TO THE LEASED PROPERTY OR ANY PORTION THEREOF, WHETHER ARISING PURSUANT TO THE
UNIFORM COMMERCIAL CODE OR ANY OTHER LEGAL REQUIREMENT NOW OR HEREAFTER IN
EFFECT OR OTHERWISE.

    

               (d)           Subject
to the provisions of this paragraph (d), Lessor hereby assigns, without recourse
or warranty whatsoever, to Lessee, all Warranties and Permits. Such assignment
shall remain in effect until the expiration or termination of this Lease and
thereafter shall be null and void. Lessee shall notify in writing each
Governmental Authority that has issued any Permit in the manner required by each
such Governmental Authority of Lessee's occupancy of the Leased Property. Lessor
shall also retain the right to enforce any Warranties assigned in the name of
Lessee if an Event of Default exists. Lessor hereby agrees to execute and
deliver, at Lessee's sole expense, such further documents, including powers of
attorney, as Lessee may reasonably request in order that Lessee may have the
full benefit of the assignment effected or intended to be effected by this
paragraph (d). Upon the termination of this Lease, to the extent, if any, still
in effect, the Warranties and Permits shall automatically revert to Lessor. The
foregoing provision of reversion shall be self-operative and no further
instrument of reassignment shall be required. In confirmation of such
reassignment, Lessee shall, at its sole expense, execute and deliver promptly
any certificate or other instrument which Lessor may reasonably request. Any
monies collected by Lessee under any of the Warranties if an Event of Default
exists shall be held in trust by Lessee and promptly paid over to Lessor. If and
when such Event of Default is cured, Lessor shall promptly pay over said monies
to Lessee.

    
      
         

      

      
        
          

        

      

       

    

    2.           Term.

    

    (a)          Subject
to the provisions hereof, Lessee shall have and hold the Leased Property for a
term (the "Basic Term")
which shall begin on the Commencement Date and end at midnight on the
Basic Term Expiration Date unless sooner terminated or extended as hereinafter
expressly provided.

    

    (b)          So
long as no Event of Default exists on the last day of the Basic Term or any
Renewal Term, Lessee, at Lessee's option, may elect to renew the Term for one
(1) or two (2) or three (3) additional terms of five (5) years (each a "Renewal Term", and
collectively the "Renewal
Terms"); provided however, Lessee may not elect to renew the Term for any
given Renewal Term unless it. has renewed the Term for all prior Renewal Terms.
Each such election, if exercised by. Lessee, shall be.exercised by Lessee not
less than three hundred sixty-five (365) days before the expiration of the then
current Term, by written notice to Lessor. Either party, upon request of the
other, will execute and acknowledge, in form suitable for recording, a
reasonable instrument confirming any such renewal. Prior to the exercise of any
such option by Lessee, Lessee shall have the right to waive its right to elect
to renew the Term by giving written notice thereof to Lessor.

    

    3.           Rent.

    

    (a)          During
the Term, Lessee shall pay the rent provided in Item 6 of Schedule B ("Basic Rent") to Lessor (or
to such other party as Lessor may from time to time specify in writing) in
lawful money of the United States by electronic transfer of immediately
available funds before 1:00 P.M., Eastern Time, at such place, within the
continental United States, as Lessor may from time to time designate to Lessee
in writing. Basic Rent shall be payable by Lessee in installments in the amounts
set forth in Item 6 of Schedule B and
(except for the first payment of Basic Rent which shall be due and payable on,
or no more than thirty (30) days prior to, the date of commencement of the Basic
Term) shall be due and payable on, or no more than thirty (30) days prior to,
the dates specified in Item 6 of Schedule B ("Installment Payment Dates") and shall constitute
Basic Rent for the periods specified in said Item 6. If any Installment Payment
Date falls on a day which is not a Business Day, Basic Rent shall be due and
payable on, or no more than thirty (30) days prior to, the immediately prior
Business Day.

    

      
(b)           All amounts
which Lesseeds required to pay or discharge pursuant to this Lease in addition
to Basic Rent (including, without limitation, if otherwise due and payable under
this Lease, (i) amounts payable as the purchase price for the Leased Property,
(ii) any amounts payable as liquidated damages hereunder, and (iii) amounts
representing costs, expenses, liabilities and obligations due to or incurred by
or on behalf of Lessor as a result of or in connection with the enforcement of
any remedy or the exercise of any right by or on behalf of Lessor), and all
amounts representing all other expressly stated obligations of Lessee under this
Lease and the other Lease Documents which could be discharged by Lessee with the
payment of money (including, by way of example, pursuant to a contract for
performance of such obligation with a third party) as reasonably determined by
or on behalf of Lessor, and after any applicable notice and/or cure periods
whether or not Lessor or any other person has incurred any expense in connection
therewith in the exercise of any right by or on behalf of Lessor, together with
every penalty, overdue interest and cost which may be added for nonpayment or
late payment of any of the foregoing, shall constitute additional rent hereunder
("Additional Rent"). If
Lessee fails to perform any expressly stated obligation of Lessee under this
Lease or any of the other Lease Documents within the time required hereunder or
thereunder which could be discharged by Lessee by the payment of money
(including, by way of example, pursuant to a contract for performance of such
obligation with a third party) as reasonably determined by or on behalf of
Lessor, and after any applicable notice and/or cure periods then, whether or not
Lessor or any other person has incurred any expense in connection therewith in
the exercise of any right by or on behalf of Lessee, immediately upon demand by
Lessor, Lessee shall owe, as Additional Rent hereunder, the amount required to
discharge such obligation as reasonably determined by or on behalf of Lessor,
which amount shall be immediately due and payable. If Lessee fails to pay or
discharge any Additional Rent and such failure constitutes an Event of Default,
Lessor shall have all rights, powers and remedies provided for herein or by law
or otherwise in the case of nonpayment of Basic Rent. Lessee shall, unless
otherwise requested by Lessor, pay Additional Rent directly to the Person
entitled thereto. Lessee also covenants to pay to Lessor on demand as.
Additional Rent, interest at a rate (the "Overdue Rate"), calculated on
the basis of a 360-day year of twelve (12) equal months, equal to the greater of
(a) 8.25% per annum or (b) 3.5% per annum over the then current prime rate of
interest publicly announced by Citibank, N.A. (or its successor) as its "base"
or "prime" rate of interest effective in New York, New York, as such rate of
interest may change from time to time and if Citibank, N.A. (or its successor)
ceases to announce a prime rate, then the current prime rate of interest
published by the Wall
Street Journal or its
successor from time to time, but in no event greater than the maximum rate
permitted by applicable Legal Requirements, on (i) all overdue installments of
Basic Rent from the due date thereof until paid in full, (ii) all overdue
amounts of Additional Rent, arising out of obligations which Lessor shall have
paid on behalf of Lessee pursuant hereto from the date of such payment by Lessor
until paid in full, and (iii) each other sum required to be paid by Lessee
hereunder which is overdue, from the date such sum was due until the date
received by the Person entitled thereto. Lessee also covenants to pay to Lessor
on demand as Additional Rent, a late fee equal to five percent (5%) of any Basic
Rent or Additional Rent which has not been paid within five (5) days after the
same is due. If any Basic Rent or Additional Rent is collected by or through an
attorney, as Additional Rent, Lessee agrees to pay all reasonable costs of
collection, including, but not limited to reasonable attorney's fees and to
reimburse Lessor for any reasonable costs of collection, including without
limitation, reasonable attorney's fees and expenses, incurred by Lessor's
Mortgagee.

    

    4.            Use.

    

    Lessee
(and its permitted assignees and subtenants) may use and occupy the Leased
Property solely for the purposes of general office space and for such other
purposes as are incidental or related thereto, including without limitation, to
the extent consistent with an office building, food and beverage service, sales
and retail services, athletic facilities and health facilities. Lessee may
maintain in the Leased Property, for use by Lessee and its employees and, to the
extent permitted under this Lease, licensees, sublessees and assignees, and
incidental use by their invitees, contractors and visitors, employee lunch rooms
(including kitchens), employee coffee bars, printing and copying facilities,
storage, telecommunications equipment, satellite dishes, antennas, computer
equipment, data and word processing equipment, and any other facility or
equipment utilized in the normal conduct of Lessee's business and not
inconsistent with the primary use of the Leased Property as a business office
complex. Additionally, Lessee may, at its sole cost and expense, maintain
showers and an exercise room in the Leased Property.   Any
other use will be subject to the approval of Lessor, such approval shall not be
unreasonably withheld, delayed or conditioned, provided that such other use (i)
is consistent with the business uses of other properties located in the same
general area as the Leased Property, (ii) does not result in, or increase the
likelihood of, a decline in the value of the Leased Property or increase the
risk of loss to Lessor (such as by an increase in the potential exposure to
hazardous waste issues), and (iii) does not impair Lessee's ability to obtain
the Policies required to be maintained by Lessee hereunder. Notwithstanding the
foregoing, in no event may Lessee occupy or use the Leased Property in a manner
which violates any Legal Requirement or Permitted Encumbrance.

    

    5.           Net Lease; No
Termination.

    

      
(a)            Lessee
expressly acknowledges that this Lease is an absolutely "bondable net lease and
Lessee must pay all Basic Rent and Additional Rent without notice, demand,
counterclaim, set-off, deduction, or defense, and without abatement, suspension,
deferment, diminution or reduction, free from any charges, assessments,
impositions, expenses or deductions of any and every kind or nature whatsoever.
All costs, expenses and obligations of every kind and nature whatsoever relating
to the Leased Property and the appurtenances thereto and the use and occupancy
thereof by Lessee or anyone claiming by, through or under Lessee as Lessee
hereunder which may arise or become due during or with respect to the Term shall
be paid by Lessee. Lessee assumes the sole responsibility for the condition,
use, operation, maintenance and management of the Leased Property and Lessor
shall have no responsibility in respect thereof and shall have no liability for
damage to the property of Lessee or any sublessee of Lessee or anyone claiming
by, through or under Lessee for any reason whatsoever, unless such damage is
caused by the negligence or willful misconduct of Lessor or Lessor's agents,
contractors (or any such contractor's subcontractors, laborers, suppliers or
materialmen), invitees, licensees or employees, provided, that such
negligence or willful misconduct shall not entitle Lessee to abate, suspend,
defer, diminish or reduce the payment of Basic Rent and Additional
Rent.

     
(b)            Lessee
acknowledges and agrees that its obligations hereunder, including, without
limitation, its obligations to pay Basic Rent and Additional Rent, are
unconditional and irrevocable under any and all circumstances and are not
subject to cancellation, termination, modification or repudiation by Lessee.
Except as expressly provided in paragraph (c) of Article 12, Article 15, or
Article 20, this Lease shall not terminate. Lessee has no right to terminate
this Lease, and Lessee shall perform all obligations hereunder, including the
payment of all Basic Rent and Additional Rent, without notice, demand,
counterclaim, set-off, deduction, defense or recoupment, and without abatement,
suspension, deferment, diminution or reduction for any reason, including,
without limitation, any past, present or future claims which Lessee may have
against the Lessor, Lessor's Mortgagee, their respective successors and assigns
or any other Person for any reason whatsoever; any defect in the Leased Property
or any portion thereof, or in the title, condition, design, construction,
durability or fitness for a particular use thereof; any Casualty to all or part
of the Leased Property; any restriction, deprivation (including eviction) or
prevention of, or any interference with or interruption of, any use or occupancy
of the Leased Property (whether due to any defect in or failure of Lessor's
title to the Leased Property, any Lien or otherwise); any Taking of the Leased
Property or interest therein; any action, omission or breach on the part of
Lessor under this Lease or under any other agreement between Lessor and Lessee,
or any other indebtedness or liability, howsoever and whenever arising, of
Lessor, any assignee of Lessor, or Lessee to any other Person, or by reason of
insolvency, bankruptcy or similar proceedings by or against Lessor, or any
assignee of Lessor, or Lessee; the inadequacy or inaccuracy of the description
of the Leased Property or the failure to demise and let to Lessee the property
intended to be leased hereby; Lessee's acquisition of ownership of the Leased
Property (as to any obligation arising before or incident to such acquisition
and any obligation intended to survive such acquisition including, without
limitation, the payment of the full purchase price in strict accordance with the
terms hereof); any sale or other disposition of the Leased Property; the
impossibility or illegality of performance by Lessor or Lessee or both; the
failure of Lessor to deliver possession of the Leased Property; any action of
any Governmental Authority; or any other cause or circumstance, whether similar
or dissimilar to the foregoing, any present or future Legal Requirements
notwithstanding and whether or not Lessee may have notice or knowledge of any of
the foregoing. The parties hereto intend that all Basic Rent and Additional Rent
payable by Lessee hereunder shall continue to be payable in all events and in
the manner and at the times herein provided, without notice or demand, unless
the obligation to pay the same shall be terminated pursuant to the express
provisions of this Lease.

    

      
(c)           Lessee will
remain obligated under this Lease in accordance with its terms, and will not
take any action to terminate (except as expressly provided in paragraph (c) of
Article 12, Article 15 or Article 20 of this Lease), rescind or avoid this Lease
for any reason, notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution or other proceeding affecting Lessor or
any other Person, or any action with respect to this Lease which may be taken by
any receiver, trustee or liquidator, or any assignee of Lessor or any other
Person or by any court or other Governmental Authority in any such action or
proceeding. Lessee waives all rights at any time conferred by statute, to extent
that such rights are waivable, or otherwise to quit, terminate or surrender this
Lease or the Leased Property or to avail itself of any abatement, reduction,
deferment or set-off of any Basic Rent, Additional Rent or other sum payable
hereunder, or for damage, loss or expense suffered by Lessee on account of any
cause referred to in this Article 5 or otherwise.

    

    6.        Taxes and Impositions; Law
and Agreements.

    

      
(a)           Lessee
shall pay and discharge, on or before the applicable delinquency date therefor,
all taxes, including any tax based upon or measured by gross rentals or receipts
from the Leased Property, assessments, special assessments, maintenance
assessments, property owners' association assessments, other assessments,
levies, fees, water and sewer rents, utility charges, and other governmental and
similar charges, including, without limitation, any payments in lieu of taxes,
maintenance charges, vault charges, and license fees for the use of the vaults,
chutes and similar areas adjoining the Land, and, except as otherwise provided
in this paragraph (a), other governmental impositions and charges, general and
special, ordinary or extraordinary, foreseen and unforeseen, of any kind or
nature whatsoever, and whether or not the same shall have been within the
express contemplation of the parties hereto, and any interest and penalties
thereon, which are levied or assessed or are otherwise due during the Term (all
such charges referred to in this subparagraph (a) being "Taxes" and "Impositions") against (i)
Lessor and which relate to Lessor's ownership of the Leased Property, the use,
occupancy, operation or possession of the Leased Property or any part thereof or
the transactions contemplated by this Lease, including, if applicable, (A) state
franchise or doing business taxes or the like but only those relating to or
resulting solely from Lessor's ownership of the Leased Property and not any
other property or any other activity of Lessor, and only to the extent described
in the second succeeding sentence, and (B) transfer taxes relating solely to the
conveyance of the Leased Property to or from Lessee or its affiliates or in
connection with the exercise of Lessor's or Lessor's Mortgagee's remedies after
an Event of Default occurs hereunder (to the extent described in the second
succeeding sentence), (ii) the Leased Property or this Lease or the interest of
Lessee or Lessor therein or herein, (iii) Basic Rent or Additional Rent or other
sums payable by Lessee hereunder, (iv) the use, occupancy, construction, repair
or Restoration of the Leased Property or any portion thereof, (v) gross receipts
from the Leased Property or (vi) any property (such as the Excess Land) which is
included within the same tax parcel in which all or any portion of the Leased
Property is situated. If any Taxes and Impositions levied or assessed against
the Leased Property may legally be paid in installments, Lessee may pay such
Taxes and Impositions in installments; provided, however, that upon
the termination of the Term Lessee shall pay any such Taxes and Impositions
which it has been paying in installments in full, on or before such termination
date. Nothing in this Lease shall require Lessee to pay any franchise, estate,
inheritance, succession, transfer (other than as set forth above), net income or
profits taxes of Lessor (other than any gross receipts or similar taxes imposed
or levied upon, assessed against or measured only by the Basic Rent or
Additional Rent payable by Lessee hereunder or levied upon or assessed against
the Leased Property), any taxes imposed by any Governmental Authority on, or
measured by, the net income of Lessor, unless any such tax is in lieu of or a
substitute for any other tax or assessment upon or with respect to the Leased
Property, in which case such tax would be payable by Lessee hereunder. Lessee
shall furnish Lessor and Lessor's Mortgagee with receipts (or if receipts are
not available, with copies of cancelled checks evidencing payment with receipts
to follow promptly after they become available) showing payment of Taxes and
Impositions before the applicable delinquency date therefor. Except for Taxes
and Impositions paid by Lessee in installments as set forth above, Taxes and
Impositions which are payable by Lessee shall be apportioned between Lessor and
Lessee as of the date on which this Lease terminates. Lessee shall establish and
maintain the Tax and Insurance Reserve Fund at the times required by and
pursuant to the terms of Article 13. On or prior to July 1, 2003, Lessee, at its
sole cost and expense, shall cause each of the Land and Excess Land to be
separate tax parcels for ad valorem tax purposes. Additionally, if required by
applicable law, on or prior to July 1, 2003, Lessee, at its sole cost and
expense, shall cause the Land and the Excess Land to be subdivided, in
accordance with all applicable Legal Requirements, into separate subdivision
lots or reserves. If Lessee fails to complete either or both of the actions
described in the immediately preceding two sentences within the time period
provided, then Lessor shall have the right (but not the obligation) to take such
action at the sole reasonable cost and reasonable expense of
Lessee.

    

      
(b)           Lessee
shall pay all charges for utility, communication and other services to the
extent rendered or used during the Term relating to the Leased Property or the
Excess Land, whether or not payment therefor shall become due after the
Term.

    

      
(c)           Subject to
the terms of paragraph (d) of this Article 6, at Lessee's cost and expense,
Lessee shall (i) perform and comply and cause the Leased Property to comply (A)
with all Legal Requirements, whether or not such Legal Requirements necessitate
structural changes or improvements, interfere with Lessee's use and enjoyment of
the Leased Property, or require replacements or repairs, extraordinary as well
as ordinary, (B) with the terms of any easement granted or released pursuant to
Article 21, (C) with the provisions of all agreements and restrictions affecting
the Leased Property or any part thereof or its ownership, occupancy, use,
operation or possession (but expressly excluding the Loan Documents, except to
the extent, and only to the extent, that Lessee, in the Lease Documents,
expressly agrees to perform any of the obligations under the Loan Documents),
and (D) with the terms and obligations under any consent of Lessee to any
assignment of Lessor's interest in this Lease to Lessor's Mortgagee; and (ii)
procure, maintain and comply with all Permits relating to the Leased
Property.

       

      
(d)           If no
Default exists, and following written notice to Lessor and Lessor's Mortgagee,
Lessee may contest (including through abatement proceedings), in good faith and
at, its sole expense, by appropriate legal proceedings, any Taxes or
Impositions, and/or any Legal Requirement affecting the Leased Property, and
postpone payment of or compliance with the• same during the pendency of such
contest, provided that (i) the commencement and continuation of such proceedings
shall suspend the collection thereof from, and suspend the enforcement thereof
against, Lessor and the Leased Property, (ii) no part of the Leased Property nor
any Basic Rent or Additional Rent or this Lease shall be interfered with or
shall be in imminent danger of being sold, forfeited, attached, terminated,
cancelled or lost, (iii) Lessee shall promptly and diligently prosecute such
contest to a final settlement or conclusion, (iv) at no time during the
permitted contest shall there be a risk of the imposition of civil or criminal
liability or penalty on Lessor or Lessor's Mortgagee for failure to comply
therewith, (v) Lessee shall satisfy any Legal Requirements, including, if
required, that the Taxes and Impositions be paid in full before being contested,
and (vi) the residual value insurance policy applicable to the Leased Property
will not be cancelled or reduced in amount as a result of the contest, and (vii)
at Lessor's option, Lessee shall have furnished Lessor or Lessor's Mortgagee
with such security as Lessor or Lessor's Mortgagee shall reasonably request to
insure payment of Taxes and Impositions and compliance with Legal Requirements,
and any interest and penalties thereon. Lessee shall pay any and all judgments,
decrees and costs (including all reasonable attorneys' fees and reasonable
expenses incurred by Lessor or Lessor's Mortgagee) in connection with any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, if any, and perform all acts the performance of which
shall be ordered or decreed as a result thereof.

    

      
(e)           (1)           Lessee
may, on one or more occasions, render the Leased Property to all taxing and
assessing authorities having jurisdiction of the Leased Property and may, if
Lessee shall so desire, endeavor at any time or times during the Term to obtain
a lowering of the assessed valuation of the Leased Property for any year or
years of the Term for the purpose of reducing Taxes and Impositions on the
Leased Property. In such event, Lessor will offer no objection and, at the
request of Lessee, will cooperate with Lessee, at Lessee's sole expense, in
reasonably attempting to effect such a reduction. Lessee shall be bound by and
shall comply with the provisions of preceding paragraph (d) of this Article 6
which Lessor and Lessee agree shall also be applicable to exercise by Lessee of
Lessee's rights under this paragraph (e) of this Article 6.

    

     
(2)           Lessee
shall have the authority to collect the Tax or Imposition refund, if any,
payable as a result of any such proceeding Lessee may institute or action Lessee
may take for that purpose, and any such Tax refund or Imposition refund shall be
the property of Lessee to the extent to which it may be based on a payment made
by Lessee, subject, however, to an apportionment between Lessor and Lessee with
respect to Taxes or Impositions paid by Lessee for the year in which the Term of
this Lease ends, whether by expiration or termination.

    

     
(3)           In
rendering the Leased Property and taking the other action referred to in this
paragraph (e) of this Article 6, Lessee shall not enter into any agreement or
stipulation with any taxing authority for the purpose of facilitating higher
Taxes or Impositions subsequent to the Term in consideration of lower Taxes or
Impositions during the Term.

    

    7.           Liens;
Subordination.

    

      
(a)            Subject
to the terms of paragraph (d) of Article 6, Lessee will promptly and no later
than thirty (30) days after its Actual Knowledge of the filing thereof but in
any event before. the enforcement of the same, at its own expense remove and
discharge of record, by bond or otherwise, any Lien in or upon the Leased
Property, upon any Basic Rent, or upon, any Additional Rent which arises for any
reason (except for Liens arising out of the act or omission of Lessor without
the consent of Lessee), including all Liens which arise out of Lessee's
possession, use, operation and occupancy of the Leased Property, but not
including any Permitted Encumbrances. Without any portion of this sentence
altering or affecting any of the obligations or rights of Lessee under Section
10(c) of this Lease, nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, express or implied, to or for the
performance by any contractor, laborer, materialman, or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Leased Property or any
part thereof nor does Lessee constitute the agent of Lessor except as provided
in Article 21 hereof. Notice is hereby given that Lessor will not be liable for
any labor, services or materials furnished or to be furnished to Lessee, or to
anyone holding an interest in the Leased Property or any part thereof through or
under Lessee, and that no mechanic's or other Liens for any such labor, services
or materials shall attach to or affect the interest of Lessor in and to the
Leased Property. If Lessee shall fail to discharge any Lien required under this
Lease to be discharged by Lessee within the time period permitted by this Lease,
Lessor may discharge the same by payment or bond or both, and Lessee will repay
to Lessor, upon demand, any and all reasonable amounts paid therefor, or by
reason of any liability on such bond, and also any and all reasonable incidental
expenses, including reasonable attorneys' fees, incurred by Lessor in connection
therewith together with interest on all such amounts calculated at the Overdue
Rate.

    

      
(b)            This
Lease shall be subject and subordinate to all present and future mortgages,
deeds of trust, or other similar Lien instruments, and as the same be renewed,
amended, modified, consolidated, replaced or extended (individually, a "Mortgage") on the fee
interest in the Leased Property and to all advances made upon the security
thereof, provided that the holder of the Mortgage shall execute and deliver to
Lessee a subordination, attornment and non-disturbance agreement ("SNDA"), in form substantially
similar to Schedule
F hereto, providing that if a foreclosure or a deed in lieu of
foreclosure occurs such new owner will recognize this Lease and not disturb
Lessee's possession of the Leased Property if no Event of Default exists; and
concurrently therewith Lessee shall execute and deliver an estoppel certificate
in form substantially similar to Schedule G hereto.
Lessee agrees, upon receipt of such SNDA, to execute such further reasonable
instrument(s) as may be necessary to subordinate this Lease to the Lien of any
such Mortgage, and also to execute such instrument(s) recognizing the assignment
of this Lease or the Basic Rent, Additional Rent and other sums payable by
Lessee hereunder to the holder of any such Mortgage; provided however, no such
instrument shall contain terms which are materially inconsistent with this Lease
or the other Lease Documents.

    

      
(c)            Lessee
agrees to attorn, from time to time, to the holder of each Mortgage and/or the
holder of such subsequent mortgage, provided that such holder, in each case, is
the purchaser or transferee of the Leased Property (including, without
limitation, a transferee in foreclosure or pursuant to a deed in lieu of
foreclosure), for the remainder of the Term, provided that such holder or such
purchaser or transferee, shall then be entitled to possession of the Leased
Property subject to the provisions of this Lease. The provisions of this
subsection shall inure to the benefit of such holder or such purchaser or
transferee, shall apply notwithstanding that, as a matter of law, this Lease may
terminate upon the foreclosure of the Mortgage (in which event the parties shall
execute a new lease for the remainder of the Term on the same terms set forth
herein), shall be self-operative upon any such demand, and no further instrument
shall be required to give effect to said provisions. Each such party, however,
upon demand of the other, hereby agrees to execute, from time to time,
instruments in confirmation of the foregoing provisions hereof, reasonably
satisfactory to the requesting party and the requested party acknowledging such
subordination, non-disturbance and attomment as are provided herein and setting
forth the terms and,
conditions of its tenancy.

    

    8.           Indemnification; Fees and
Expenses.

    

      
(a)            Lessee
shall protect, defend (through counsel selected by Lessee and approved by the
applicable Indemnified Party, such approval shall not be unreasonably withheld)
and indemnify Lessor, Lessor's Mortgagee, each Certificate Holder and the
Indenture Trustee, their respective successors and assigns, the beneficial
owners of any of the foregoing and the trustees, beneficiaries, partners,
shareholders, officers, directors, agents or employees of Lessor, Lessor's
Mortgagee, each Certificate Holder and the Indenture Trustee, or any such
successor or assign or beneficial owner (each an "Indemnified Party" and
collectively, the "Indemnified
Parties"), from and against and hold the Indemnified Parties harmless
from all Liens (including, without limitation. Lien
removal and bonding costs), liabilities, losses, damages, demands, claims,
obligations, suits or other proceedings (including, by way of example, causes of
action, litigation and defenses), settlement proceeds, fines, penalties,
assessments, citations, directives, judgments, fees, costs, disbursements or
other expenses of any kind or of any nature whatsoever (including, without
limitation, reasonable attorneys', reasonable consultants', and reasonable
experts' fees and disbursements actually incurred in investigating, defending,
settling or prosecuting any claim, obligation, suit or other similar proceeding)
which may be imposed on, incurred by or, asserted or awarded against such
Indemnified Party ("Indemnified
Liabilities") (i) arising or alleged to arise from or in connection with
the condition, use, operation, maintenance, Restoration, subletting and
management of the Leased Property; (ii) relating to the Leased Property and the
appurtenances thereto and the use and occupancy thereof by Lessee or anyone
claiming by, through or under Lessee; or (iii) arising or alleged to arise from
or in connection with any of the following events: (A) any accident, injury to,
or death of, any person or any damage to or loss of property on or adjacent to
the Leased Property or growing out of or directly or indirectly connected with,
ownership, use, nonuse, occupancy, operation, possession, condition,
construction, repair or Restoration of the Leased Property or adjoining
property, sidewalks, streets or ways or resulting from the condition of any
thereof; (B) any claims by third parties resulting from any violation or alleged
violation by Lessee of (1) any provision of this Lease, or (2) any Legal
Requirement, or (3) any sublease, rental or license agreement or other agreement
relating to the Leased Property, or (4) any contract or agreement to which
Lessee is a party affecting the Leased Property or the ownership, use, nonuse,
occupancy, condition, operation, . possession, construction, repair or
rebuilding thereof or of adjoining property, sidewalks, streets or ways; (C) any
contest permitted by Article 6; (D) Lessee's failure to pay in accordance with
the terms and provisions hereof, any item
of Additional Rent or other sums payable by Lessee hereunder; (E) the exercise
or attempted exercise by Lessee of any of its rights under this Lease; (F) any
Specified Activity or any exercise (whether proper or improper) of any of
Lessee's rights (including its rights as attorney-in-fact) set forth in Section
21 hereof; (G) the Leased Property, Lessee, any sublessee, any assignee or any
other party claiming by, through or under Lessee not being in compliance with
any applicable Environmental Law; or (H) Lessee, any sublessee, any assignee or
any other party claiming by, through, or under Lessee not having obtained any
Permit required to conduct its or their operations at the Leased Property that
is required under any applicable Environmental Law or other Legal Requirement.
Lessee shall not be liable in any case to any Indemnified Party for any
Indemnified Liabilities to the extent that they result from the gross negligence
or willful misconduct of such Indemnified Party. If any Indemnified Party, shall
be made a party to any such litigation commenced against Lessee, and if Lessee,
at its expense, shall fail to provide Lessor or Lessor's Mortgagee or its agent
or other Indemnified Party with counsel reasonably approved by such party,
Lessee shall pay all reasonable costs and reasonable attorney's fees and
reasonable expenses incurred or paid by Lessor or Lessor's Mortgagee or its
agent or other Indemnified Party in connection with such litigation. So long as
no Event of Default has occurred and is continuing hereunder, Lessee shall
control any such litigation and settlement discussions relating thereto.
Notwithstanding anything in this Article 8, so long as (v) no Event of Default
has occurred and is continuing hereunder, (w) neither Lessor nor Lessor's
Mortgagee would be subject to any risk of criminal or material civil liability,
(x) there is no risk of Lessor losing the Leased Property or Lessor's Mortgagee
losing the priority of its Lien, (y) no Credit Rating Downgrade exists, and (z)
the residual value insurance policy applicable to the Leased Property will not
be cancelled or reduced in amount as a result thereof, Lessor will not agree to
any settlement of any claim covered by this Article 8 without Lessee's prior
written consent.

    

      
(b)           An
Indemnified Party shall promptly notify Lessee of any Indemnified Liabilities as
to which indemnification is sought; provided, however, the failure
to give such notice shall not release Lessee from any of its obligations under
this Article 8 except to the extent, if any, that (y) such Indemnified Party
receives timely notice of such Indemnified Liability so that it could have
timely given notice thereof to Lessee such that Lessee could effectively defend
against such Indemnified Liability and (z) Lessee (i) did not have timely
knowledge of such Indemnified Liability so that it could effectively defend
against such Indemnified Liability and (ii) was thereby damaged. Subject to the
rights of insurers under the Policies maintained by Lessee, Lessee may, at
Lessee's sole expense, investigate, defend or compromise, any Indemnified
Liabilities for which indemnification is sought under this Article 8 and the
Indemnified Party shall cooperate at Lessee's expense with all reasonable
requests of Lessee in connection therewith; provided, however, Lessee may not
defend or compromise such Indemnified Liabilities if (1) an Event of Default
exists, or (2) such Indemnified Liabilities would entail a risk to the
Indemnified Party of any criminal liability or civil sanctions; provided,
further, Lessee may not compromise or settle any such Indemnified Liabilities
unless Lessee agrees in advance in writing to pay the amount of such settlement
or compromise and such settlement or compromise includes a full release of all
Indemnified Parties satisfactory to each Indemnified Party in its reasonable
discretion. In any case in which any action, suit or proceeding is brought
against any Indemnified Party in connection with any Indemnified Liabilities,
Lessee may, and upon such Indemnified Party's request will, at Lessee's sole
expense defend the Indemnified Party against such Indemnified Liabilities, or
cause the same to be defended by counsel selected by Lessee and reasonably
acceptable to such Indemnified Party. If Lessee fails to do so, Lessee shall pay
all reasonable costs and reasonable expenses (including, without limitation,
reasonable attorneys' fees and reasonable expenses) incurred by such Indemnified
Party in connection with such Indemnified Liabilities. Nothing contained in this
subparagraph (b) of this Article 8 shall be deemed to require an Indemnified
Party to contest any Indemnified Liabilities or to assume responsibility for or
control of any judicial proceeding with respect thereto.

    

       (c)           The
obligations of Lessee, and the rights and remedies of each Indemnified Party
under this Article 8, are in addition to and not in limitation of any other
representations, warranties, obligations, rights and remedies provided in this
Lease or otherwise at law or in equity, and shall survive the expiration or
termination of this Lease.

    

    9.           Environmental
Matters.

    

      
(a)           Lessee
represents, warrants and covenants to the Indemnified Parties that:

    

    (i)           At
all times during the Term of this Lease, (A) the Leased Property and Lessee
shall comply, and Lessee shall cause all sublessees and any assignees of Lessee
and all other parties claiming by, through, or under Lessee to be contractually
obligated to comply, with all applicable Environmental Laws; (B) Lessee shall
have obtained, and Lessee shall cause, all sublessees and any assignees of
Lessee and all other parties claiming by, through, or under Lessee, to have
obtained, all Permits required to conduct its or their operations at the Leased
Property that are required under all applicable Environmental Laws and Lessee
shall be in compliance, and shall, in good faith and diligently, seek to have,
all sublessees and any assignees of Lessee and all other parties claiming by,
through, or under Lessee, to be in compliance with, the same; and (C) Lessee
shall remove and dispose of any Hazardous Substances present on the Leased
Property not in compliance with applicable Environmental Laws;

    

    (ii)           To
the best of Lessee's Actual Knowledge, and except as disclosed in the
Environmental Site Assessment, (A) the Leased Property complies with applicable
Environmental Laws; (B) no Release of Hazardous Substances has occurred on, from
or affecting the Leased Property in violation of the Environmental Laws; and (C)
no Hazardous Substances have been, generated, handled, treated, stored on,
incorporated in, or removed or transported from the Leased Property (including
underground contamination) except in compliance with applicable Environmental
Laws. No notices, complaints or orders of violation or non-compliance of any
nature whatsoever regarding alleged violations of, or strict liability under,
Environmental Laws have been received by Lessee or, to Lessee's Actual
Knowledge, by any Person regarding the Leased Property, and Lessee has no Actual
Knowledge that any environmental investigation by any Governmental Authority, or
any legal action by a private party, is pending or threatened, in each case with
regard to the Leased Property or any use thereof or any alleged violation of
Environmental Laws with regard to the Leased Property; and to Lessee's Actual
Knowledge, and except as disclosed in the Environmental Site Assessment, no
Liens have been placed upon the Leased Property in connection with any actual or
alleged liability under any Environmental Laws;

    

    (iii)            The
Leased Property has not been used by Lessee, and, to Lessee's Actual Knowledge,
has not been used by Lessee's predecessors or Affiliates, or, to Lessee's Actual
Knowledge, except as disclosed in the Environmental Site Assessment, by any
other Person, and will not be used by Lessee or by any Person under Lessee's
control during the Term of this Lease to generate, manufacture, refine, produce
or process any Hazardous Substance or to store, handle, treat, dispose, transfer
or transport any Hazardous Substance other than normal and lawful uses of such
Hazardous Substances in compliance with Environmental Laws which activities have
not had and will not have any material adverse effect upon the Leased
Property;

    

    (iv)            To
Lessee's Actual Knowledge, and except as disclosed in the Environmental Site
Assessment, no pits, lagoons, ponds, or other surface impoundments, above ground
tanks or other containment structures have been or will be constructed, operated
or maintained in or on the Leased Property in violation of applicable
Environmental Laws and no underground storage tanks are or will be constructed,
operated or maintained in or on the Leased Property; to Lessee's Actual
Knowledge, except as disclosed in the Environmental Site Assessment, there is
presently no asbestos nor asbestos-containing material (except commercially
produced product in non-friable bonded form in floor, ceiling or wall materials
which is in good condition, the presence of which complies with all
Environmental Laws) nor any PCB-containing equipment, including PCB-containing
transformers, located in, on, at or under the Leased Property nor will any of
the foregoing be located in, on, at or under the Leased Property at any time
during the Term of this Lease. Lessee shall maintain and implement a written
asbestos-containing material operations and maintenance program for any
identified or presumed asbestos-containing materials, such written program to be
in form and content reasonably acceptable to Lessor;

    

    (v)            To
Lessee's Actual Knowledge, and except as disclosed in the Environmental Site
Assessment, other than lawful quantities in connection with Lessee's use of the
Leased Property in compliance with Environmental Laws, the Leased Property is
free of Hazardous Substances at, in, on, over or under the Leased Property,
regardless of the source of any such Hazardous Substances; and

     

                                  
(vi)          To Lessee's
Actual Knowledge, the Environmental Site Assessment is true, correct and
complete, and contains no misstatement of fact or omission of any fact which
would make the statements contained therein untrue, incomplete or misleading in
any material respect.

    

       (b)           Promptly
upon obtaining Actual Knowledge thereof, Lessee shall notify Lessor and Lessor's
Mortgagee if any of the following occur, in each case relating to the Leased
Property or the use, occupancy or operation thereof: (i) the Leased Property,
Lessee, any sublessee or assignee of Lessee or invitee of Lessee, or any other
party claiming by, through, or under Lessee, fails to comply with any
Environmental Law in any manner whatsoever; (ii) any notice, complaint or order
of violation or non-compliance with any Environmental Law of any nature
whatsoever is issued to Lessee, or any sublessee of any portion of the Leased
Property or any assignee of Lessee, or any other party claiming by, through, or
under Lessee; (iii) any notice of a pending or threatened investigation under
any Environmental Law is issued; (iv) any notice from any Governmental Authority
requiring any corrective action under any Environmental Law is issued; or (v)
any Permit, application, report, document or other communication with respect to
a pending or, threatened action by any Governmental Authority or other Person
relating to a violation of the Environmental Laws, or the actual, alleged or
potential Release of Hazardous Substances or presence or existence of any
Hazardous Substances at, on, adjacent to or upon the Leased Property is
issued.

    

       (c)           At
any time (i) if a Release of Hazardous Substances has occurred on, from or
affecting the Leased Property in violation of Environmental Laws or an adverse
change in the environmental condition of the Leased Property has occurred, and
if Lessee fails (A) diligently to. commence to remediate or cure such condition,
to - the extent necessary to meet Legal Requirements, to comply fully with
applicable Environmental Laws, and to prevent a material diminution in the fair
market value of the Leased Property related to the environmental condition,
within thirty (30) days after Lessee obtains Actual Knowledge of such adverse
change (or such shorter period as may be required by law or if an emergency
exists) and (B) thereafter diligently prosecute to completion such cure, or (ii)
if an Event of Default exists under this Lease, or (iii) if Lessor or Lessor's
Mortgagee has reasonable cause to believe that Lessee is in Default or has
permitted a Default under this Article 9, Lessor or Lessor's Mortgagee may cause
to be performed or direct Lessee to cause to be performed an environmental audit
or site assessment of the Leased Property and the then uses thereof reasonable
in scope under the circumstances, and may take such actions as it may deem
necessary to remediate or cure such condition or to cause the Leased Property to
comply with any Legal Requirement. Such environmental audit or site assessment
shall be performed by an engineer qualified by law and experience to perform the
same and satisfactory to Lessor and Lessor's Mortgagee, shall include a review
of the uses of the Leased Property and compliance of the same with all
Environmental Laws, and shall include an estimate of the cost to cure any
Default in Lessee's covenants hereunder. All reasonable costs and expenses
actually incurred by Lessor or Lessor's Mortgagee in connection with such
environmental audit or assessment and any remediation required shall constitute
Additional Rent and shall be immediately due and payable by Lessee upon demand,
and shall bear interest at the Overdue Rate from the date such cost or expense
is incurred until it is paid. Such audit or assessment shall be addressed to
Lessor and Lessor's Mortgagee and shall provide expressly that they can rely on
its findings.

    

      
(d)           Subject to
the provisions of paragraph (d) of Article 6 hereof, inclusive of the right of
Lessee to contest and postpone compliance and exercise Lessee's other rights
thereunder (in accordance with the provisions thereof), in the event of a
violation of or the discovery of a violation of any Environmental Law, Lessee
shall promptly perform all remedial actions as shall be necessary or desirable
to clean up, contain, or remove any Hazardous Substances on, under or in the
Leased Property in accordance with, and as required by, applicable Environmental
Laws and Permitted Encumbrances to restore the Leased Property to its
pre-contamination condition and otherwise to cure any such violation of any
Environmental Law, all at Lessee's sole cost and expense, including, without
limitation, all investigative, monitoring, removal, containment and remedial
actions in accordance with applicable Environmental Laws (and in all events in a
manner reasonably satisfactory to Lessor and Lessor's Mortgagee). Lessee (i)
shall use good faith efforts to determine the nature and scope of all such
required remedial actions within thirty (30) days after the date ("Remedial Date") which is the
first to occur of (A) Lessee's obtaining Actual Knowledge of any such violation
or (B) the date on which Lessee has exhausted its rights under paragraph (d) of
Article 6 with respect to such violation (if Lessee exercises its rights under
such paragraph (d)) and (ii) shall complete all such actions within one hundred
twenty (120) days following the Remedial Date, provided that if such remedial
actions cannot be completed with diligence within such one hundred twenty (120)
day period, and so long as Lessee is performing such remedial actions with due
diligence, the time within which such remedial actions may be completed shall be
extended for such period as may be reasonably necessary to complete such
remedial action with diligence, provided the same shall be subject to Lessor's
approval and consistent with the requirements of applicable Legal Requirements.
If Lessee fails to perform the necessary remedial actions as required hereby
within the time periods set forth herein, Lessor or Lessor's Mortgagee may, but
shall not be obligated to, cause the Leased Property to be freed from Hazardous
Substances or otherwise brought into compliance with Environmental Laws, and any
reasonable costs and expenses actually incurred by Lessor or Lessor's Mortgagee
in connection therewith, together with interest at the Overdue Rate from the
date incurred until actually paid by Lessee, shall constitute Additional Rent
and shall be immediately due and payable on demand. Lessee grants to Lessor and
Lessor's Mortgagee access to the Leased Property and a license to remove any
Hazardous Substances and to do all things Lessor or Lessor's Mortgagee deems
necessary to bring the Leased Property into compliance with the Environmental
Laws. If, as a result of a violation of any Environmental Laws, a Lien attaches
to the Leased Property that takes priority over the Lien of the Mortgage, Lessee
shall promptly, and in any event within thirty (30) days after notice of the
attachment of any such Lien, discharge or contest such Lien in accordance with
the provisions of paragraph (d) of Article 6 and, if contested rather than
discharged, post a bond or deposit an irrevocable letter of credit with Lessor's
Mortgagee, in either event satisfactory in form and substance, with a surety or
obligor satisfactory to Lessor's Mortgagee and in an amount sufficient to
discharge such Lien.

    

      
(e)           In addition
to, and not in limitation of, any indemnity contained in Article 8, Lessee
agrees to indemnify, defend (at trial and appellate levels, and with attorneys,
consultants and experts acceptable to Lessor and Lessor's Mortgagee) and hold
harmless each Indemnified Party from and against any and all Indemnified
Liabilities which may be imposed upon, suffered or incurred by, or asserted or
awarded against such Indemnified Party to the extent arising directly or
indirectly from or out of: (i) the presence, use, storage, transportation, or
Release of Hazardous Substances at, from, on, over, under or in the Leased
Property, or any Release of Hazardous Substances emanating from the Leased
Property onto any contiguous property, regardless of whether occurring before or
during the Term of this Lease (or occurring after the Term of this Lease so long
as Lessee or any of its Affiliates either is in possession of all or any portion
of the Leased Property or owns all or any portion of the Leased Property) and
regardless of the source of any such Hazardous Substances, (ii) the breach of
any representation or warranty contained in this Article 9, (iii) any Default in
the performance of any obligation under this Article 9, (iv) any violation of
any Environmental Law with respect to the Leased Property or by Lessee or any
Person, or resulting from Lessee's failure to comply with this Article 9, or (v)
the enforcement of this Article 9.

    

      
(f)           The
representations, warranties and obligations of Lessee, and the rights and
remedies of each Indemnified Party under this Article 9, are in addition to and
not in limitation of any other representations, warranties, obligations, rights
and remedies provided in this Lease or otherwise at law or in
equity.

    

      
(g)           Lessee's
obligations and liabilities with respect to each Indemnified Party, actual or
contingent, under this Article 9 and relating to the period through the end of
the Term, whether arising before, during or after the Term, shall survive the
termination of this Lease or the abandonment of the Leased Property by Lessee,
or any acquisition or disposition of the Leased Property, except for events and
circumstances resulting solely from the acts of any Person other than Lessee,
any Affiliate of Lessee, or any Person claiming by or through Lessee or any such
Affiliate and occurring after the foreclosure of the lien of the Mortgage and
the sale of the Leased Property pursuant to such foreclosure.

    

    10.      Maintenance and Repair;
Additions.

    

      
(a)           Lessee
will, at its sole cost and expense, keep and maintain the Leased Property,
including the Improvements and any altered, Restored, additional or substituted
buildings and other improvements, in good order and safe condition, ordinary
wear and tear excepted (subject to Lessee's continuing obligation to maintain
the Leased Property in accordance with the maintenance of other Class A suburban
office buildings in the West Sam Houston Parkway/Interstate 10 (Katy Freeway)
area, and (except as otherwise provided in paragraph (c) of Article 12) will
make all structural and non-structural, and ordinary and extraordinary changes,
repairs and replacements, foreseen or unforeseen, which may be required, whether
or not caused by its act or omission, to be made upon or in connection with the
improvements to the Leased Property in order to keep the same in such condition,
including taking action necessary to maintain the Leased Property in compliance
with all Legal Requirements; subject, however, to any
contest of applicable Legal Requirements conducted in accordance with the
provisions of paragraph (d) of Article 6. Lessee shall keep the Leased Property
orderly and free and clear of rubbish, and shall not commit or suffer any waste
of the Leased Property. Lessor shall not be required to maintain, alter, repair,
rebuild or replace any improvements on the Leased Property or to maintain the
Leased Property, and Lessee expressly waives the right to make repairs at the
expense of Lessor or to terminate this Lease because of Lessor's failure to so
maintain or repair pursuant to any Legal Requirements at any time in effect.
Lessor shall have no obligation to incur any expense of any kind or character in
connection with the management, operation or maintenance of the Leased Property
during the Term of the Lease. Lessee shall use and operate the Leased Property
or cause it to be used and operated only by personnel authorized by Lessee and
Lessee shall use reasonable precautions to prevent loss or damage to the Leased
Property from Casualty.

    

      
(b)           If any
Improvements encroach upon any property, street or right-of-way adjoining or
adjacent to the Leased Property, or violate any restrictive covenant affecting
the Leased Property or any part thereof, or impairs the rights of others under
or obstructs any easement or right-of-way to which the Leased Property is
subject (excluding, however, covenants, easements or rights-of-way granted by
Lessor after commencement of the Term without the consent of Lessee all of which
shall be null and void), then, promptly after the written request of Lessor or
any Person affected by any such encroachment, violation, impairment or
obstruction, Lessee shall, at its expense, either (i) obtain effective waivers
or settlements of all claims, liabilities and damages resulting from each such
encroachment, violation, impairment or obstruction or (ii) make such changes in
the Improvements and take such other action as shall be necessary to remove such
encroachments or obstructions and to end such violations or impairments,
including, if necessary, the alteration or removal of any Improvement. Any such
alteration or removal shall be made to the same extent as if such alteration or
removal were an Alteration under the provisions of paragraphs (c) or (d) of this
Article 10 and there shall be no abatement of rent by reason of such alteration
or removal.

    

      
(c)           Lessee may,
at its sole expense, make Alterations (y) which satisfy all of the following
conditions ("Minimum
Alterations Conditions"): (i) are consistent with Lessee's use of the
Leased Property, (ii) do not adversely affect the structural elements of the
Improvements, or Building Systems, (iii) do not adversely affect the utility,
useful life or fair market value of the Leased Property and (iv) are not
otherwise prohibited by this Lease and (z) with respect to which. Lessee has
furnished to Lessor evidence reasonably satisfactory to Lessor that all of the
Minimum Alterations Conditions will be satisfied for such Alterations. Lessee
may desire to construct additional covered parking space by building onto
(vertically and/or horizontally) the existing parking garage ("Garage") situated on the
Land. Alterations which consist of additional covered parking spaces which are
consistent with the existing Garage shall be deemed to satisfy subparts (i) and
(iii) of the Minimum Alterations Conditions. In constructing any additional
covered parking space by building onto (vertically and/or horizontally) the
Garage, Lessee, so long as it complies with the provisions of this Section 10(c)
and other applicable provisions of this Lease with respect to such construction,
need not comply with any of the provisions of Section 4.2 of the REA other than
subpart (a) of such Section 4.2. All Alterations other than the Alterations
contemplated in the first sentence of this subpart (c) are herein called the
"Other Alterations".
Lessee may, at its sole expense, make Other Alterations only if consented to in
writing by Lessor. In connection with Lessee's request for such consent of
Lessor, Lessor shall act with good faith and reasonable diligence in complying
with the applicable provisions of this Lease. Lessor may withhold its consent to
any Other Alteration (1) if such Other Alterations will not satisfy all of the
Minimum Alterations Conditions, (2) if the plans and specifications for such
Other Alterations are not reasonably acceptable to Lessor or (3) if at the time
such consent is requested either (a) Lessee does not have a Minimum Credit
Rating or (b) a Default or an Event of Default exists hereunder. Additionally,
it will be reasonable for Lessor to condition its consent on Lessee being
obligated to deliver to Lessor a certificate of a structural engineer or
qualified architect licensed in the state in which the Leased Property is
located certifying that if the Other Alteration is constructed in accordance
with the proposed plans and specifications, it will not adversely affect the
structural integrity of the Improvements or adversely affect the Building
Systems and it will conform with all Legal Requirements. Lessee shall construct
all Alterations (including Other Alterations) in a good and workmanlike manner
using a quality of material and workmanship at least as good as the original
work or installation of the Improvements and in compliance with all applicable
Legal Requirements, including those relating to parking, and will complete the
Alterations (including Other Alterations) in a commercially reasonable time
period. Each Alteration (including Other Alterations) shall be made at the sole
cost and expense of Lessee, may not be encumbered by Lessee and (other than
Trade Fixtures) shall become the property of Lessor and subject to this
Lease.

    

      
(d)           All work
done in accordance with this Article 10 shall comply with the requirements of
all Policies required to be maintained by Lessee hereunder and with the residual
value insurance policy applicable to the Leased Property.

    

      
(e)           Lessee
agrees that all of the Improvements shall be deemed real property and fixtures
owned by Lessor. In furtherance of the foregoing, Lessee hereby grants, conveys
and transfers to Lessor any and all of Lessee's right, title and interest in and
to the Improvements (other than Trade Fixtures) (whether now existing or
hereafter constructed). Lessee agrees that any and all Improvements of whatever
nature at any time constructed, placed or maintained upon any part of the Land
shall be and remain the property of Lessor, subject to Lessee's rights under
this Lease. Lessee agrees to execute, acknowledge, deliver, and file all
documents reasonably necessary or appropriate to effect the purpose of this
paragraph 10(e).

    

    11.      Trade
Fixtures.

    

    Lessor
acknowledges and agrees that the items of trade fixtures, machinery and
equipment described in Schedule E (but specifically excluding Improvements,
Building Systems and other replacements of fixtures, machinery and equipment
which are the property of Lessor), together with other personal property of
Lessee that is as easily removable as the personal property described on
Schedule E, are and shall remain the property of Lessee ("Trade Fixtures") and
be treated as "trade fixtures" for the purposes of this Lease and Lessee may
remove the same from the
Leased Property at any. time before the termination of this Lease, provided that
Lessee shall repair any damage to the Leased Property resulting from such
removal. Lessee may, at its own cost and expense, install or place or reinstall
or replace upon or remove from the Leased Property any such Trade Fixtures. Any
such Trade Fixtures shall not become the property of Lessor. Replacements of
Building Systems, fixtures, machinery and equipment that are property of the
Lessor shall be of at least equal quality to the replaced Building Systems,
fixtures, machinery and equipment when the replaced items were new.

    

    12.       Condemnation and
Casualty.

    

      
(a)           Lessee
hereby assumes all risk of loss, damage or destruction, whether (i) by fire or
hazard or other casualty, or the theft of all or any portion of the Leased
Property (a "Casualty")
or (ii) by condemnation, seizure, confiscation, requisition or other taking or
sale of the use, access, occupancy, easement, rights to or title of all or any
portion of the Leased Property, whether permanent or temporary, by or on account
of any actual or threatened eminent domain proceeding or other action by any
Governmental Authority or any transfer in lieu or in anticipation thereof (a
"Taking"; a Taking and a
Casualty are each sometimes called a "Destruction"). Lessee hereby
assigns to Lessor's Mortgagee, if any, and otherwise to Lessor any award or
insurance proceeds or other payment to which Lessee may become entitled by
reason of its interest in the Leased Property (other than any award or insurance
proceeds or other payment made to Lessee specifically made for interruption of
business, moving expenses or Trade Fixtures; hereinafter called "Lessee's Loss") if the Leased
Property, or any portion thereof, is damaged, destroyed, lost or taken in a
Taking or a Casualty. If a Destruction occurs, the Lessee shall give Lessor and
Lessor's Mortgagee prompt written notice thereof, and describe in reasonable
detail in each case the facts or circumstances of the Destruction and the damage
to or loss or destruction of the Leased Property. So long as no Event of Default
exists, Lessee shall at its cost and expense, in the name and on behalf of the
Lessor, Lessee, Lessor's Mortgagee or otherwise, appear in any such proceeding
or other action, negotiate, accept and prosecute any claim for any award,
compensation, insurance proceeds or other payment on account of any such
Destruction and, subject to paragraph (b) below, cause each such award,
compensation, insurance proceeds or other payment to be paid to Lessor's
Mortgagee, if any, and otherwise, to Lessor. Lessee shall use commercially
reasonable efforts to achieve the maximum award or other recoveries obtainable
under the circumstances. Any negotiated awards, settlement or recoveries shall
be subject to Lessor's and Lessor's Mortgagee's prior written approval (and if
approved, Lessee shall be deemed to have used commercially reasonable efforts to
achieve the maximum award or other recoveries obtainable under the
circumstances). Lessee shall promptly inform Lessor of all settlement offers.
Lessor and Lessor's Mortgagee may appear in any such proceeding or other action
in a manner consistent with the foregoing and the costs and expenses of any such
appearance shall be borne by Lessee and payable to Lessor as Additional Rent. If
an Event of Default exists, Lessor's Mortgagee (or if there be none, Lessor)
shall have the exclusive right at Lessee's cost to negotiate, adjust and settle
awards, settlements and recoveries without Lessee's approval.

    

      
(b)           After
giving notice of a Destruction under the provisions of paragraph (a) of this
Article 12, Lessee shall, at Lessee's own cost and expense, proceed with
diligence and promptness (i) to carry out any work necessary to make the Leased
Property safe and secure, and (ii) to Restore the Leased Property. All
Restoration shall be undertaken and completed in the same manner as if the same
were undertaken pursuant to paragraphs (c) and (d) of Article 10, and shall be
subject to the reasonable requirements of Lessor and Lessor's Mortgagee as
provided for in clause (ii) below. All Restoration shall be completed by the
Outside Restoration Date, The foregoing obligations of Lessee so to Restore the
Leased Property shall not be applicable (but the obligation of Lessee to make
the Leased Property safe and secure shall be applicable) if Lessee has made (or
has been deemed to have made) an offer to purchase the Leased Property pursuant
to paragraph (c) below. If during the pendency of such Restoration the term of
this Lease expires or otherwise terminates, then, at Lessor's option, such term
shall be extended until completion of such Restoration on the same terms and
conditions (including Basic Rent, Additional Rent and other rent) which were in
effect immediately prior to such extension. The "Outside Restoration Date"
shall mean (a) with respect to a Casualty, eighteen (18) months after the
Destruction occurs, or (b) with respect to a Taking, twelve (12) months after
the Destruction occurs, in each case subject to extension by Lessor of not more
than eighteen (18) months to the extent that Restoration is delayed due to acts
of God, strikes, unavailability of materials, or further
Destruction.

    

    Except
upon completion of Lessee's purchase of the Leased Property pursuant to Article
15 hereof (including payment by Lessee of all amounts Lessee is to pay pursuant
to such Article 15), Basic Rent and Additional Rent shall not abate hereunder by
reason of any Destruction affecting the Leased Property, and this Lease shall
continue in full force and effect and Lessee shall continue to perform and
fulfill all of Lessee's obligations, covenants and agreements hereunder
notwithstanding such Destruction.

    

    The Net
Award shall be applied to effect compliance with Lessee's obligations hereunder.
Before commencement of any Restoration and at all times during Restoration, if
the undisbursed portion of the Net Award is less than the reasonably estimated
hard and soft costs to Restore the Improvements to the condition required in
this paragraph (b), as reasonably determined by Lessor, at Lessee's expense,
then, unless such estimated cost is less than the Restoration Threshold Amount,
Lessee shall deposit the amount by which such estimated cost to Restore exceeds
the Net Award with the Depositary (as defined below) or shall post an equivalent
bond or other security reasonably satisfactory in form and substance to Lessor
and Lessor's Mortgagee issued by a surety, bank or other Person satisfactory to
Lessor and Lessor's Mortgagee, whereupon such deposit or bonded amount shall be
part of the Net Award for purposes of paragraph (c) of this Article 12. If the
Net Award does not exceed the then Specified Amount (the "Restoration Threshold Amount"),
then provided no Event of Default exists, the Net Award shall be promptly
paid to Lessee to be applied to the Restoration required by this paragraph (b).
If the Net Award exceeds the Restoration Threshold Amount then provided no Event
of Default exists:

    

    (i)          The
full amount thereof shall be paid to a depositary (the "Depositary"). The Depositary
shall be Lessor's Mortgagee or a servicer of the loan held thereby, or a bank or
trust company, selected by Lessor and approved by Lessor's Mortgagee, the
long-term unsecured debt obligations of which are rated at least "A" and "A2",
respectively, by S&P or Moody's (or any successor to either entity). The
Depositary shall have no affirmative obligation to prosecute a determination of
the amount of, or to effect the collection of, any insurance proceeds or
condemnation award or awards. Moneys so received by the Depositary shall be held
by the Depositary in trust separately for the uses and purposes provided in this
Lease. To the extent not available to be paid from the Net Award, fees and
expenses payable to the Depositary shall be paid by Lessee as Additional
Rent.

    

    (ii)          Payments
of the Net Award for the actual costs and expenses incurred by Lessee in
connection with such Restoration shall be made periodically (but not less
frequently than once each calendar month and not more frequently than twice each
calendar month) to Lessee from time to time as work progresses by the Depositary
after written notice to the Depositary, with a copy to Lessor, setting forth in
reasonable detail and with reasonable supporting materials all of such costs and
expenses actually incurred by Lessee. Lessee shall comply with the reasonable
requirements of Lessor and Lessor's Mortgagee, if any, with respect to the
distribution of any Net Award by the Depositary, including without limitation
that no Event of Default exists hereunder, that Lessee proceeds promptly after
the Net Award is delivered to the Depositary to Restore the Leased Property in
accordance with the requirements of this Article 12 and paragraphs (c) and (d)
of Article 10, that all plans and specifications for the Restoration shall have
been reviewed and approved by Lessor and Lessor's Mortgagee, and that
disbursements by the Depositary shall be not more frequently than monthly in an
amount not exceeding the hard and soft costs of the Restoration incurred since
the previous disbursement and shall be conditioned upon, the delivery to the
Depositary of appropriate lien waivers, architect's certificates, title
insurance endorsements and other certificates and information that would
typically be delivered to a construction lender in a construction loan context.
The Depositary shall retain ten percent (10%) of the Net Award until Restoration
is substantially complete at which time the undisbursed balance of the Net Award
shall be disbursed as herein provided. At all times the undisbursed balance of
the amount of deposit with the Depositary must be not less than the cost to
Restore the Leased Property clear of all Liens. If upon completion of the
Restoration and the payment of all costs incurred in connection therewith there
is any excess Net Award, then:

    

    
      	
               
      

            	
              (1)

            	
              In
      the case of a Casualty, and provided that no Default or Event of Default
      then exists, such excess Net Award shall be paid to or retained by Lessee,
      free and clear of any claims by Lessor or Lessor's Mortgagee;
      or

            

    

     

                       
(2)            In
the case of a Taking, such excess Net Award shall:

    

    
      	
               
      

            	
              (a)

            	
              First,
      be paid to or retained by Lessee in an amount equal to the total amount of
      costs and expenses paid by Lessee (and with respect to which Lessee has
      not been reimbursed) on behalf of Lessor and Lessor's Mortgagee in
      connection with such Taking pursuant to Section 12(a) hereof;
      and

            

    

    

    
      	
               
      

            	
              (b)

            	
              Second,
      be paid to or redeemed by Lessor (subject to the terms of any Lessor's
      Mortgage), free and clear of any claims by
  Lessee.

            

    

    

                        
(c)           As used
herein, the following terms shall have the meanings indicated:

    

    
      	
               
      

            	
              (x)
      "Casualty Event of Loss" means that there has been a casualty of more than
      twenty five percent (25%) of the Leased Property such that the Casualty
      renders the Leased Property unfit for use in Lessee's business and the
      Leased Property cannot be Restored within twelve (12) months after such
      Casualty occurred.

            

    

    

    
      	
               
      

            	
              (y)

            	
              "Condemnation
      Event of Loss" means the Taking of, in whole or in any significant part,
      the Leased Property, either permanently, or for a period which extends six
      (6) months beyond expiration of the Term, such that the Leased Property is
      rendered unfit for use in Lessee's business and the remainder of the
      Property cannot be Restored, within twelve (12) months after such Taking,
      to the Taking Restored Condition.

            

    

    

    Notwithstanding
the foregoing provisions of this Article 12:

    

    (I)            If
there is a Casualty Event of Loss or a Condemnation Event of Loss, then at any
time within three (3) months after such Casualty or Taking, Lessee may make an
irrevocable rejectable offer to Lessor to purchase the Leased Property, in the
manner and under the terms of Article 15 on the Installment Payment Date first
occurring sixty (60) days after Lessor's acceptance of such offer, for a
purchase price equal to the Termination Value as of the date of purchase. Lessor
shall have ninety (90) days after receipt of such offer in which to accept or
reject such offer. No rejection of such offer shall be effective unless
consented to in advance in writing by Lessor's Mortgagee, if any, and if such
consent to rejection from Lessor's Mortgagee is not delivered within such ninety
(90) day period, then such offer shall be deemed accepted as of the last day of
such ninety (90) day period. Additionally, if, within such ninety (90) day
period, there is no notice from Lessor to Lessee either accepting or rejecting
such offer, then such offer shall also be deemed accepted as of the last day of
such ninety (90) day period.

    

    

    
      	
               
      

            	
              (II)

            	
              If
      (A) a Destruction occurs, (B) Lessee does not exercise the right (if
      available to Lessee) set forth in subpart (I) of this subpart (c), and (C)
      any of the two following conditions exists: (i) such Destruction
      constitutes a Condemnation Event of Loss or (ii) after such Destruction
      Lessee fails to Restore the Leased Property by the Outside Restoration
      Date, then, in any of such events, at the option of Lessor (with the prior
      written consent of Lessor's Mortgagee), upon notice from Lessor of any
      such event which makes reference to this Article 12(c) and the invocation
      of the offer provisions hereafter provided for, Lessor may require Lessee
      to make, and Lessee shall be deemed to have made, a rejectable offer to
      Lessor to purchase the Leased Property in the manner and under the terms
      of Article 15 on the Installment Payment Date first occurring sixty (60)
      days after Lessor's acceptance of such offer, for a purchase price equal
      to the Termination Value as of the date of purchase. Lessor shall have
      ninety (90) days after such offer in which (by written notice from Lessor
      to Lessee within such ninety (90) day period) to accept or reject such
      offer and if, within such ninety (90) day period, there is no written
      notice from Lessor to Lessee either accepting to rejecting such offer,
      then Lessor shall be deemed to have accepted such offer. No rejection of
      such offer shall be effective unless consented to in advance in writing by
      Lessor's Mortgagee.

            

    

    

    If Lessor
rejects any offer under this paragraph (c), this Lease shall terminate on the
Installment Payment Date first occurring thirty (30) days after such rejection,
and Lessor or Lessor's Mortgagee, as the case may be, shall retain the entire
Net Award.

    

    (d)            Notwithstanding
any other provision to the contrary contained in this Article 12, if a temporary
Taking occurs, this Lease shall remain in full force and effect (including
without limitation the obligation of Lessee to continue to pay without reduction
Basic Rent and Additional Rent) and the Lessee shall be obligated to continue to
pay Basic Rent and Additional Rent and Lessee shall be entitled to the entire
Net Award paid for such temporary Taking; except that any portion of the Net
Award allocable to the time period after the expiration or termination of the
Term shall be paid to Lessor. The provisions of this Article 12 shall supersede
any contrary provisions in any statute or law.

    

    13.           Insurance.

    

    (a)           Lessee
shall, at its cost and expense, maintain or cause to be maintained valid and
enforceable insurance of the following character and shall cause to be delivered
to Lessor and Lessor's Mortgagee annual certificates of the insurers as to such
coverage and shall comply with the requirements of this Article 13 ("Insurance
Requirements"):

    

    (i)           "All
Risks of Physical Loss" property insurance covering the Leased Property and all
replacements and additions thereto, and all building materials and other
property which constitute part of the Leased Property in a manner consistent
with insurance maintained by Lessee on properties similar to the Leased Property
and in any event in amounts not less than one hundred percent (100%) of the full
replacement value of the Leased Property less Land and other uninsurable items,
subject to an agreed value endorsement, together with an endorsement providing
for law and ordinance coverage in an amount equal to at least twenty-five
percent (25%) of the full replacement value of all Improvements, all of such
insurance to have a deductible not greater than the Specified
Amount.

    

    (ii)           Commercial
general liability insurance covering legal liability on an "occurrence" basis
against claims for bodily injury, death or property damage, occurring on, in or
about the Leased Property and, to the extent commercially reasonably available,
the adjoining land, streets, sidewalks or ways occurring as a result of
construction and use and occupancy of facilities located on the Leased Property
or as a result of the construction thereof or the use of products or materials
manufactured, processed, constructed or sold, or services rendered, on the
Leased Property, in the minimum amount of $5,000,000 (or such higher amount as
Lessor may reasonably require from time to time) with respect to any one
occurrence, accident or disaster or incidence of negligence and with a maximum
deductible of the Specified Amount.

    

    (iii)           Worker's
compensation insurance (or other similar insurance or self insurance program
permitted and in compliance with the Legal Requirements of the state in which
the Leased Property is located) covering all Persons employed in connection with
any work done on or about the Leased Property with respect to which claims for
death or bodily injury could be asserted against Lessor, Lessee or the Leased
Property, complying with the Legal Requirements of the state in which the Leased
Property is located.

    

    (iv)            If
any portion of the Leased Property is located in an area designated by the
Federal Emergency Management Agency as having special flood and mudslide
hazards, flood insurance either through its customary property insurance program
or in the maximum available amount under the Flood Disaster Protection Act of
1973 and otherwise meeting the requirements of the Federal Insurance
Administration.

    

    (v)            Business
interruption insurance in amounts sufficient to compensate Lessor for all Basic
Rent, Additional Rent and other amounts payable hereunder for a period of not
less than eighteen (18) months, the amount of such coverage to be adjusted
annually to reflect the Basic Rent, Additional Rent and other amounts payable
during the succeeding eighteen (18) month period.

    

    (vi)            At
all times during which construction, repairs, Restoration or Alterations are
being made with respect to the Improvements, the insurance provided for in
subsection (i) written on a so-called builder's risk completed value form on a
non-reporting basis, including permission to occupy the Leased Property, and
with an agreed-amount endorsement waiving co-insurance provisions.

     

                                   
(vii)          Broad form
general boiler and machinery insurance (without exclusion for explosion)
covering physical damage to the Leased Property and to the major components of
any central air conditioning or ventilation systems, steam boilers, pipes,
turbines, engines or similar apparatus in an amount which is not less than one
hundred percent (100%) of the full replacement value of the Leased
Property.

         

                                   
(viii)          Intentionally
Deleted.

     

                                    
(ix)          Such other
insurance, in such amounts, against such risks, and with such other provisions
as is required by Lessor's Mortgagee or customarily and generally maintained by
operators of other Class A suburban office buildings in the West Sam Houston
Parkway/Interstate 10 (Katy Freeway) area, including war risk insurance (at and
during such times as war risk insurance is commonly obtained in the case of
property similar to the Leased Property), when and to the extent obtainable from
the United States Government or any agency thereof.

    

    All
policies of insurance required hereunder (the "Policies") shall be written
by insurance companies having an insurance company claims paying rating from
S&P and Moody's of "A" or better and be considered equivalent to a NAIC 1 or
other rating designation acceptable to the. Securities Valuation Office of the
National Association of Insurance Commissioners. All such.. insurance companies
shall be legally qualified to issue such insurance in the state where the Leased
Property is located, and otherwise be reasonably satisfactory to Lessor and
Lessor's Mortgagee.

    

    Insurance
certificates evidencing the coverage required by the Policies shall be deposited
with the Lessor by Lessee on the date hereof and thereafter no less frequently
than annually. With respect to the Policies described under subparagraphs (i),
(ii), (iv), (v), (vi), (vii) and, if applicable, (viii) and (ix), the Lessee
also shall deliver insurance certificates evidencing the coverage required under
said subparagraphs to the Lessor's Mortgagee, naming the Lessor's Mortgagee as
the certificate holder. The form and substance of such certificates shall be,
satisfactory to Lessor and Lessor's Mortgagee, in the exercise of reasonable
judgment, and shall be issued by the insurer. Furthermore, the Lessee shall
deliver to Lessor and Lessor's Mortgagee certificates (or other evidence
reasonably satisfactory to Lessor and Lessor's Mortgagee) evidencing the
coverage required by the Policies at least fifteen (15) days before the earlier
of the expiration of the existing insurance period or the due date for all
premiums for the renewal of such Policies.

    

    All
Policies of property insurance shall name the Lessor as loss payee and Lessor's
Mortgagee as loss payee, mortgagee and additional insured, as its interest may
appear, and all liability Policies shall name the Lessor and the Lessor's
Mortgagee as additional insured, as their respective interests may appear and
the policies required under subparagraphs (i), (iv), (v), (vi), (vii) and (viii)
(ix) above shall identify the Lessor as the owner of the Leased Property. In
addition, all Policies shall contain a standard New York lender or equivalent
"non-contributory mortgagee" endorsement naming the Lessor's Mortgagee as loss
payee, mortgagee and additional insured.

    

    All
Policies and endorsements shall be fully prepaid and nonassessable. The Lessee
shall not obtain any separate or additional insurance which is contributing in
the event of loss unless the Lessor and the Lessor's Mortgagee are each insured
thereunder (as their interests may appear) and the policies therefor are
satisfactory to the Lessor and the Lessor's Mortgagee.

    

    (b)            Intentionally
Deleted

    

    (c)            All
Policies shall (i) provide that the insurance evidenced thereby shall not be
canceled or modified without at least thirty (30) days' prior written notice
from the insurance carrier to the Lessor and the Lessor's Mortgagee, (ii)
provide that the issuer waives all rights of subrogation against Lessor, any
successor to Lessor's interests in the Leased Property and Lessor's Mortgagee,
(iii) provide that thirty (30) days' advance written notice of cancellation,
modification, termination or lapse of coverage will be given to Lessor and
Lessor's Mortgagee, (iv) provide that such insurance, as to the interest of
Lessor and Lessor's Mortgagee, will not be invalidated by any act or neglect of
Lessor, Lessor's Mortgagee, Lessee or any party, nor by any :foreclosure or any
other proceedings relating to the Leased Property, nor by any change in the
title ownership of the Leased Property, nor by use or occupation of the Leased
Property for purposes more hazardous than are permitted by such Policy, (v)
provide that no claims shall be paid thereunder without ten (10) days' advance
written notice to the Lessor and the Lessor's Mortgagee, (vi) be primary and
without right or provision of contribution as to any other insurance carried by
Lessor or any other interested party, and (vii) if any insuring company is not
domiciled within the United States of America, include a United States Service
of Suit clause (providing any actions against the. insurer by the named insured
or Lessor are conducted within the jurisdiction of the United States of
America).

    

    (d)            Lessee
shall comply at its sole expense, with all of the terms and conditions- of all
Policies.

    

    (e)           Any
time after an Event of Default has occurred, or if a Credit Rating Downgrade has
occurred, Lessee shall on demand pay to Lessor's Mortgagee, if any, or otherwise
to Lessor, on the same day of each month that Basic Rent is due hereunder a
monthly payment in such amount as Lessor or Lessor's Mortgagee determines to be
necessary to create and maintain a reserve fund from which to pay before they
become due all Taxes and Impositions during the next ensuing twelve (12)
months,' and sufficient to pay all premiums ("Insurance Premiums") that
are due for the renewal or replacement of the coverage afforded by the Policies
(the "Tax and Insurance Reserve Fund
Payment"). The Tax and Insurance Reserve Fund Payment shall be held in
escrow (the "Tax and Insurance
Reserve Fund") by Lessor or Lessor's Mortgagee free of trust and without
interest to Lessee, and may be commingled with other funds. Any excess reserve
shall be credited against subsequent Tax and Insurance Reserve Fund Payments
required hereunder, and any deficiency shall be paid by Lessee upon demand and
shall bear interest at the Overdue Rate if unpaid five (5) days after such
demand, but shall be paid in no event later than five (5) days before the date
when such Taxes and Impositions and Insurance Premiums shall become delinquent.
To the extent that adequate funds for Taxes and Impositions and for Insurance
Premiums have been paid to create a Tax and Insurance Reserve Fund and provided
no Event of Default exists, Lessor (or Lessor's Mortgagee if the Tax and
Insurance Reserve Fund is held by Lessor's Mortgagee) shall, on not less than
fifteen (15) days' written request of Lessee, cause the same to be applied to
Taxes and Impositions and Insurance Premiums payable by Lessee hereunder; provided, Lessee
shall not be required to pay such Taxes and Impositions and Insurance Premiums,
as the case may be, if (i) no Event of Default exists, (ii) the Tax and
Insurance Reserve Fund contains sufficient amounts to pay such Taxes and
Impositions, and (iii) Insurance Premiums and Lessor (or Lessor's Mortgagee if
the Tax and Insurance Reserve Fund is held by Lessor's Mortgagee) fails to apply
such funds to pay such Taxes and Impositions and Insurance Premiums following
Lessee's written request. If an Event of Default exists, then the Tax and
Insurance Reserve Fund may be applied to any Rent then due and unpaid and Lessee
shall remain liable to pay such Taxes and Impositions and Insurance Premiums to
the extent not paid out of the Tax and Insurance Reserve Fund. If after an Event
of Default has occurred or a Credit Rating Downgrade has occurred Lessor or
Lessor's Mortgagee has demanded Lessee to make the Tax and Insurance Reserve
Fund Payments pursuant to this paragraph (e) and during any three (3) month
period thereafter no Event of Default exists and Lessee maintains the Minimum
Credit Rating, then upon expiration of such three (3) month period the balance
of the Tax and Insurance Reserve Fund shall be returned to Lessee and Lessee
shall have no further obligation to make Tax and Insurance Reserve Fund Payments
unless and until a new Event of Default or a new Credit Rating Downgrade
occurs.

    

    Any
unapplied portion of the Tax and Insurance Reserve Fund shall be returned to
Lessee within thirty (30) days after the expiration of the Term or termination
of this Lease, provided. there exists no Event of Default by Lessee. Upon the
occurrence of any Event of Default by Lessee hereunder, Lessee agrees that
Lessor may apply all or any portion of the Tax and Insurance Reserve Fund to any
obligation of Lessee hereunder. If all or any portion of the Tax and Insurance
Reserve Fund is applied to any obligation of Lessee hereunder, Lessee shall
immediately upon request of Lessor restore the Tax and Insurance Reserve Fund to
its original amount with interest at the Overdue Rate on such amounts five (5)
days after such request. Lessee shall not have the right to call upon Lessor to
apply all or any portion of the Tax and Insurance Reserve Fund to cure any
Default or fulfill any obligation of Lessee hereunder, but such use shall be
solely in the discretion of Lessor. Upon any conveyance of the Leased Property
by Lessor, Lessor's right in the Tax and Insurance Reserve Fund shall be
transferred by Lessor to Lessor's transferee, and upon such transfer Lessee
releases Lessor herein named of any and all liability with respect to the fund,
its application and return, and Lessee agrees to look solely to such transferee
with respect thereto. The provisions of the previous sentence shall also apply
to subsequent transferees.

    

    14.            Financial Statements;
Certificates. Lessee will cause to be delivered to Lessor and Lessor's
Mortgagee the following financial statements of Lessee:

    

    (i)           
For any period that Lessee is a public company, as soon as practicable but in no
event later than the date of filing with the Securities and Exchange Commission
or other Governmental Authority, copies of all Form 8-K, Form 10-K, and Form
10-Q reports, financial statements, proxy statements, notices, annual reports
and other communications as Lessee shall send to its shareholders and other
information generally made available to banks and other lenders (exclusive of
proprietary information); provided that Lessor and Lessor's Mortgagee shall be
deemed to have been furnished the foregoing reports and other information if and
to the extent Lessor and Lessor's Mortgagee may electronically access such
reports and other information by means of the homepage of the Securities and
Exchange Commission on the Internet; provided that such electronic resource is
generally available to the public without charge;

    

     (ii)           For
any period Lessee is not a public company required to file such reports with the
Securities and Exchange Commission then within one hundred twenty (120) days
after the end of each fiscal year, and within sixty (60) days after the end of
any other fiscal quarter, a consolidated statement of earnings, and a
consolidated statement of changes in financial position, a consolidated
statement of stockholders' equity, and a consolidated balance sheet of such
entity as of the end of each such year or fiscal quarter, setting forth in each
case in comparative form the corresponding consolidated figures from the
preceding annual audit or corresponding fiscal quarter in the prior fiscal year,
as appropriate, all in reasonable detail and satisfactory in scope to Lessor and
Lessor's Mortgagee, and certified to Lessee as to the annual consolidated
statements by independent public accountants of recognized national standing
selected by Lessee, whose certificate shall be based upon an examination
conducted in accordance with generally accepted auditing standards and the
application of such tests as said accountants deem necessary under the
circumstances; and

    

    (iii)           Within
sixty (60) days of the end of each calendar year, an annual operating statement
for Lessee's operations as lessee and operator of the Leased Property, detailing
revenue, expenses and capital improvements made to the Leased Property, together
with a projection of such capital improvements for the next calendar year, such
operating statement to be certified as true, correct and complete by Lessee's
Chief Financial Officer or Treasurer.

    

    Within
one hundred twenty (120) days after-the end
of each of Lessee's fiscal years, Lessee will cause to be delivered to Lessor
and Lessor's Mortgagee a certificate by an Executive Officer of Lessee (i) that
to the best of such officer's knowledge based on reasonable inquiry, there
exists no Default or Event of Default under this Lease or if any such Default or
Event of Default exists, specifying the naturee thereof, the period of existence
thereof and what action Lessee proposes to take with respect thereto and (ii)
detailing capital improvements made to the Leased Property during the prior"
calendar year and a projection of such matters for the next calendar year. In
addition, Lessee agrees, upon prior written request, to meet with Lessor and
Lessor's Mortgagee during normal business hours at mutually convenient times,
from time to time, to discuss this Lease and such information about Lessee's
business and financial condition requested by Lessor.

    

    Any
non-public information delivered to the Lessor pursuant to this Article 14, or
otherwise, shall be deemed to be, and shall be treated as, confidential so long
as such information is labeled as "Confidential" by Lessee when delivered to
Lessor. Lessor may share the information delivered pursuant to this Article 14
with Lessor's Mortgagee, the Certificate Holders, potential mortgagees, rating
agencies, servicers, potential purchasers of the Leased Property or a beneficial
interest therein and all other parties having a legitimate business purpose for
reviewing the same, and such parties may disclose such non-public information to
regulatory authorities and in accordance with any judicial or governmental
order, or if required by any law, regulation or stock exchange
rule.

    

    15.           Purchase
Procedure.

    

    (a)           If
Lessee purchases Lessor's interest in the Leased Property pursuant  to
any provision of this Lease, the terms and conditions of this Article 15 shall
apply.

    

    (b)           On
the Closing Date:

    

    (i)          Lessee
shall pay to Lessor's Mortgagee, if any, and if none to Lessor, or as Lessor
directs, in lawful money of the United States in immediately available funds, at
Lessor's address herein stated or at any other place in the United States which
Lessor may designate, an amount equal to the purchase price described in such
provision (which purchase price shall never include the Reinvestment Premium
except in connection with a transfer pursuant to Section 20(b)(ii)(3) of this
Lease);

    

    (ii)          Lessor
shall execute and deliver to Lessee a special warranty deed covering the Leased
Property, and an assignment and such other instrument or instruments as may be
appropriate and customary in accordance with prevailing local conveyancing
practices, which shall transfer all of Lessor's interest in the Leased Property,
in each case free and clear of any Mortgage, but subject to (A) any Liens
existing on the first day of the Term (other than any Mortgage), (B) the
Permitted Encumbrances, (C) all Liens attaching to the Leased Property after the
beginning of the Term (other than those created or evidenced by the Mortgage and
those created or caused by or through Lessor without the consent of Lessee, (D)
any installments of Impositions then affecting the Leased Property, and (E) all
Legal Requirements. Lessor shall either (1) credit the Net Award, if any,
actually received by Lessor to the purchase price or (2) pay the same to Lessee
and assign to Lessee all rights to any award not yet received;

    

    (iii)          Lessee
shall pay all charges incident to such transfer or the termination of the Lease
which are incurred by Lessor, Lessor's Mortgagee or Lessee, including but not
limited to all transfer taxes, recording fees, escrow fees, title insurance
premiums and federal, state and local taxes (except for any franchise, net
income, or profit taxes of Lessor or Lessor's Mortgagee), and reasonable
attorneys' fees and expenses of Lessor's counsel and counsel to Lessor's
Mortgagee;

    

    (iv)          Lessee
shall pay to Lessor all Basic Rent, Additional Rent and other sums payable by
Lessee under this Lease, due and payable through and including the date Lessee
completes the purchase of Lessor's interest in the Leased Property, and the
party purchasing the Leased Property shall be entitled to receive all amounts on
deposit in the Tax and Insurance Reserve Fund; and

    

    (v)          Except
for those warranties contained in the special warranty deed described in
subparagraph (b)(ii) of this Article 15, Lessor's transfer of its interest in
the Leased Property shall be on an as-is basis, without any representation or
warranty, either express or implied, as to the design, condition, quality,
capacity, merchantability, habitability, durability, suitability or fitness of
the Leased Property for any particular purpose, or any other matter concerning
the Leased Property or any portion thereof.

    

    (c)           This
Lease shall remain in full force and effect and Lessee shall perform all of its
obligations under this Lease through completion of the closing of Lessee's
purchase of Lessor's interests in the Leased Property pursuant to this Article
15, at which time Lessor shall have no liability for any obligation arising
under this Lease from and after such closing.

    

    

    
      
         

      

      
        
          

        

      

       

    

    16.         Quiet Enjoyment. So
long as no Event of Default exists under this Lease, Lessor covenants that
Lessee shall and may at all times peaceably and quietly have, hold and enjoy the
Leased Property during the Term of this Lease from any claim by, through, or
under Lessor. Notwithstanding the preceding sentence, (a) Lessor may exercise
its rights and remedies under Article 20 and (b) Lessor, Lessor's Mortgagee,
representatives of a residual value insurer, and their respective agents may
enter upon and inspect the Leased Property, during normal business hours after
reasonable prior notice and with the minimum disruption reasonably practicable
to Lessee's occupancy (x) once every three (3) years while Lessee has a credit
rating, (y) once each year while Lessee does not have a credit rating, and (z)
two (2) times during the last year of the Basic Term. Any failure by Lessor to
comply with the foregoing covenant shall not give Lessee any right to cancel or
terminate this Lease, or to abate, reduce or make deduction from or offset
against any Basic Rent or Additional Rent or other sum payable under this Lease,
or to fail to perform or observe any other covenant, agreement or obligation
hereunder or to recover any damages against Lessor resulting therefrom. Subject
to the foregoing sentence, Lessee may obtain injunctive or other equitable
relief against Lessor for breach of the aforesaid covenant of peaceful and quiet
possession and enjoyment of the Leased Property. If requested by Lessor or
Lessor's Mortgagee (upon thirty [30] days' prior written notice), Lessee shall
at its own expense provide Lessor and Lessor's Mortgagee with certificates every
year during the Term of this Lease (except the last year of the Term, during
which year Lessee shall provide such certificate each. fiscal quarter of Lessee)
certifying (if true and correct) that the Leased Property is in the condition
required by Article 10; provided, that Lessee
shall be required to deliver, the certificates required by this sentence once
each fiscal quarter of Lessee if required by Lessor's Mortgagee. One (1) year
before the expiration of the Term, if requested by Lessor or Lessor's Mortgagee,
Lessee shall at its own expense cause the Leased Property to be inspected: by a
qualified independent inspector, the results of which shall be made available to
Lessee, Lessor, and Lessor's Mortgagee not less than eleven (11) months before
the end of the Term, to determine whether the condition of the Leased Property
complies with the requirements set forth in the residual value insurance policy
applicable to the Leased Property.

    

    17.         Survival. If this
Lease is terminated as herein provided, Lessee's obligations and liabilities,
actual or contingent, under this Lease which arose at or before, or is otherwise
attributable to a period of time prior to, such termination shall survive such
termination.

    

    18.         Subletting;
Assignment.

    

            
(a)          Lessee may, on one or
more occasions and from time to time, sublet the Leased Property or any portion
thereof, or on one or more occasions and from time to time, assign its interest
in this Lease, provided that:

    

        
(i)             No
Event of Default exists under this Lease on the date of such sublease or
assignment;

    

    (ii)             Each
sublease or assignment shall expressly be made subject and subordinate to the
provisions hereof;

    

      (iii)              No
sublease may extend beyond the Basic Term, unless Lessee has exercised its right
to renew pursuant to paragraph (b) of Article 2 and the last Renewal Term for
which Lessee has exercised its option under Article 2 extends through the
scheduled expiration date of such sublease;

    

     (iv)   
          With respect to an
assignment, the assignee is a partnership, corporation, limited liability
company or other business entity which either owns one hundred percent (100%) of
the common stock of Lessee or is an Affiliate of Lessee and with respect to
which at least 50% of the ownership interest of such Affiliate is owned,
directly or indirectly, by Lessee; and

    

     
(v)            With
respect to an assignment, the assignee assumes all of Lessee's duties,
liabilities and obligations under this Lease accruing from and after the date of
such assignment such that both Lessee and such assignee shall be jointly,
severally and primarily liable for the performance of all of Lessee's duties,
liabilities and obligations under this Lease accruing from and after the date of
such assignment (such assumption agreement shall be in form and substance
reasonably satisfactory to Lessor).

     

    (b)            No
such sublease or assignment shall affect or reduce anyy obligations of Lessee,
or the rights of Lessor hereunder, and all obligations of Lessee hereunder shall
continue in full effect as the obligations of a principal and not of a guarantor
or surety, as though no subletting or assignment had been made.

    

    (c)            
Lessee shall, within ten (10) days after the execution of any such sublease or
assignment (with assumption agreement), deliver to Lessor a conformed copy
thereof and of any short form lease or memorandum of lease which has been
prepared for recording purposes.

    

    (d)            Notwithstanding
anything to the contrary herein contained, without the prior written consent of
Lessor (which may be granted or withheld in Lessor's sole discretion), Lessee
will not, directly or indirectly, consolidate with or merge into any
corporation, association, partnership or other business organization or permit
any corporation, association, partnership or other business organization to
consolidate with or merge into it, or sell or otherwise transfer all or
substantially all of its properties and assets, or acquire all or substantially
all of the assets of any corporation, association, partnership or other business
organization or individual, unless the Lessee shall be the entity surviving such
consolidation, merger or other action, or the surviving entity or transferee
shall enter into an assumption of this Lease in form and substance reasonably
satisfactory to Lessor and Lessor's Mortgagee (together with an opinion of
independent counsel in form and substance reasonably satisfactory to Lessor and
Lessor's Mortgagee relating to the due authorization, execution, delivery and
enforceability of such assumption).

    

    (e)             Neither
this Lease nor the Term of this Lease shall be mortgaged by Lessee unless such
mortgage is expressly made subject to and subordinate to the rights of Lessor
and Lessor's Mortgagee, nor shall Lessee mortgage or pledge the interest of
Lessee in and to any sublease of the Leased Property or any portion thereof or
the rental payable thereunder unless such mortgage or pledge is expressly made
subject to and subordinate to the rights of Lessor and Lessor's Mortgagee. Any
such mortgage or pledge, and any sublease or assignment not permitted by this
Article 18, shall be void.

    

    (f)           Lessee
shall pay as Additional Rent to Lessor on demand all reasonable  costs
and expenses of Lessor and Lessor's Mortgagee (including in-house or outside
counsel attorneys' reasonable fees and expenses) in reviewing or executing any
instrument pursuant to this Article 18.

    

    (g)            With
respect to any sublease which meets the requirements set forth above and the
following requirements, Lessor shall join with Lessee and the applicable
sublessee in executing and delivering a subordination, attornment and
non-disturbance agreement in form and substance reasonably satisfactory to
Lessor:

    

    
      	
              (i)  

            	
              Lessee
      has not suffered a Credit Rating
Downgrade;

            

    

    

    
      	
              (ii)  

            	
              The
      applicable sublessee shall, pursuant to such sublease, occupy at least two
      (2) full floors;

            

    

    

    
      	
              (iii)  

            	
              The
      rental rate provided for in such sublease is at least a "prevailing market
      rate"; and

            

    

    

    
      	
              (iv)  

            	
              Such
      sublessee has a tangible net worth of not less than $80,000,000.00 and has
      a "3" as ascribed by the National Association of Insurance Commissioners
      whether such designation is made public or reflected in a private letter
      designation.

            

    

    

    19.           Advances by
Lessor.

    

    If Lessee
shall fail to make or perform any payment or act required by this Lease, then,
upon ten (10) Business Days' notice to Lessee (or upon shorter notice or no
notice, to the extent necessary to meet an emergency or a governmental
limitation), Lessor may at its option pay or perform such act for the account of
Lessee, and Lessor shall not thereby be deemed to have waived any Default or
released Lessee from any obligation hereunder. Amounts so paid by Lessor and all
related incidental reasonable costs and related reasonable expenses (including
reasonable attorneys' fees and reasonable expenses) incurred in connection with
such payment or performance shall constitute Additional Rent and shall be paid
by Lessee to Lessor on demand and shall bear interest at the Overdue Rate from
the date of Lessor's payment until the date .Lessor is reimbursed in
full.

    

    20.            Conditional Limitations --
Events of
Default and Remedies.

    

    (a)            Any
of the following occurrences or acts shall constitute an "Event of Default" under this
Lease: 

     

    (i)           If
Lessee (A) fails to pay any installment of Basic Rent within five (5) days after
any such payment is due, (B) fails to pay Additional Rent and such failure
continues for ten (10) days after notice thereof has been given to Lessee, (C)
fails to keep in full force and effect any insurance coverage required to be
maintained by Lessee hereunder, (D) fails to perform its obligation to purchase
the Leased Property when required to do so by any provision of this Lease, or
(E) fails to timely pay any Taxes and Impositions when due and the payment of
such Taxes and Impositions is not then being contested pursuant to and in
accordance with the provisions of Section 6(d) hereof; or

    

    
      	
                                              (ii)

            	
              If
      Lessee fails to perform any other covenant, agreement or obligation on the
      part of Lessee to be performed under this Lease and such failure continues
      for a period of thirty (30) days after notice thereof has been given to
      Lessee; provided, however, that in the case of a failure which Lessee is
      able to remedy with reasonable diligence, but not within a period of
      thirty (30) days, if Lessee commences within such period of thirty (30)
      days to remedy such failure and thereafter prosecutes the remedying of
      such failure with reasonable diligence, the period of time within which to
      remedy such failure shall be extended for such period not to exceed an
      additional sixty (60) days (and, if agreed to by both Lessor and Lessor's
      Mortgagee, a second period of sixty (60) days) as may be reasonable to
      remedy the same with all reasonable diligence;
  or

            

    

     

                                 
(iii)            If
Lessee files a petition of bankruptcy or for reorganization or for an
arrangement pursuant to the Bankruptcy Code, or is adjudicated a bankrupt or
becomes insolvent or makes an assignment for the benefit of its creditors, or
admits in writing its inability to pay its debts generally as they become due,
or is dissolved, or suspends payment of its obligations, or takes any corporate
action in furtherance of any of the foregoing; or

     

                                
(iv)            If a
petition or answer is filed proposing the adjudication of Lessee as a bankrupt,
or its reorganization pursuant to the Bankruptcy Code, and (A) Lessee consents
to the filing thereof, or (B) such petition or answer is not discharged or
denied within ninety (90) days after the filing thereof, or

     

                                  (v) 
          If a receiver,
trustee or liquidator (or other similar official) is appointed for or takes
possession or charge of Lessee, or Lessee's estate or interest in the Leased
Property, and is not discharged within ninety (90) days thereafter, or if Lessee
consents to or acquiesces in such appointment; or

     

                                
(vi)            If
the Leased Property is left unattended, unsecured and without maintenance;
or

     

                               
(vii)            If
Lessee has made a material misrepresentation under this Lease, any document or
instrument executed in connection with Lessor's acquisition of the Leased
Property (including any purchase agreement or conveyance document) or any
certificate or writing tendered in connection with the execution and delivery of
this Lease.

    

    (b)            If
an Event of Default shall occur and be continuing, Lessor shall have the option
to do any one or more of the following without any notice or demand, in addition
to and not in limitation of any other remedies permitted by law or by this Lease
(including without limitation, seeking to recover damages, including
consequential and incidental damages to the extent provided for in Article 36 of
this Lease, against Lessee):

     

                                    
(i)   
         Decline to repossess the
Leased Property, and elect to maintain the Lease in full force and effect. In
this event, Lessor shall have the right to sue Lessee for the recovery of
monthly Basic Rent and/or Additional Rent as such Rent becomes due for and
during the entire unexpired portion of the Term of the Lease. If it is necessary
for Lessor to bring suit against Lessee in order to collect such sums, Lessor
has the right to allow monthly Basic Rent and/or Additional Rent charges to
accumulate and to bring an action on several or all of the accrued monthly Basic
Rent and/or Additional Rent charges due at any one time. Any such suit shall not
prejudice the right of Lessor to bring a similar action for any subsequent
monthly Basic Rent and/or Additional Rent as it falls due.

    

    (ii)             Treat
the Event of Default as an anticipatory repudiation, terminate Lessee's rights
under this Lease (but not its obligations), and repossess the Leased Property.
In such event, Lessor shall have the right to immediate possession of the Leased
Property and may re-enter the Leased Property, change the locks and remove all
persons and property therefrom without being guilty in any manner of trespass or
otherwise; and any and all damages to Lessee, or persons holding under Lessee,
by reason of such re-entry are hereby expressly waived; and any such termination
of Lessee's rights under the Lease or re-entry on the part of Lessor shall be
without prejudice to any remedy available to Lessor for arrears of Basic Rent
and/or Additional Rent, breach of contract, damages or otherwise, nor shall the
termination of Lessee's rights under this Lease by Lessor acting under this
subsection be, deemed in any manner to relieve Lessee from the obligation to pay
the Basic Rent and/or Additional Rent due or, to become due as provided in this
Lease.
for and during the entire unexpired portion (or what would have been the entire
unexpired portion) of the Term. In the event of termination of Lessee's rights
under this Lease and repossession by Lessor as provided in this subsection,
Lessor shall have the further right, but not the obligation, to:

    

    (1) Relet
the Leased Property upon such terms, conditions and covenants as are deemed
proper by Lessor for the account of Lessee and in such event Lessee shall remain
liable for the full Basic Rent and Additional Rent for, the remainder of the
Term of this Lease (reduced as hereafter provided by reason, of the monthly rent
and other. charges [if any] actually collected under the; new lease), and in
addition Lessee shall pay to Lessor Lessee's Share (as hereinafter defined) of
all costs of renovating and/or altering the Leased Property (or any portion
thereof) for a new lessee or lessees (including all out-of-pocket expenses
incurred by Lessor, including incentives, allowances and inducements) and all
reasonable brokerage and/or reasonable legal fees incurred in connection
therewith. Lessor shall have the right to sue Lessee to collect Lessee's Share
of all costs of renovating and/or altering the Leased Property (or any portion
thereof) for a new lessee or lessees (including all out-of-pocket expenses
incurred by Lessor, including incentives, allowances and inducements) and all
reasonable brokerage and/or reasonable legal fees incurred in connection
therewith, as well as the difference for the entire unexpired portion (or what
would have been the entire unexpired portion) of the Tenn of this Lease between
the Basic Rent and Additional Rent under this Lease versus the monthly rent and
other charges collected or to be collected under the new Lease. In no event
shall Lessee be entitled to any excess rent received by Lessor on account of
such reletting(s). As used herein, "Lessee's Share" shall mean the ratio, the
numerator of which is the number of months from the date that Lessee's rights
under this Lease are terminated as provided above until the date that the
Term.hereof would have expired, and the denominator of which is the number of
rent-paying months in the primary term of the lease entered into by Lessor
pursuant to such reletting; but in no event shall Lessee's Share exceed
100%;

    

    (2)
Alternatively, at the election of Lessor (provided that no such election shall
be effective unless consented to in advance in writing by Lessor's Mortgagee, if
any), Lessee shall pay as damages to Lessor, upon any such termination of
Lessee's rights under this Lease, such sum as at the time of such termination of
Lessee's rights equals the amount of the excess, if any, of the then present
value of all the Basic Rent and Additional Rent which would have been due and
payable hereunder during the entire unexpired portion (or what would have been
the entire unexpired portion) of the Term of this Lease over and above the then
present rental value of the Leased Property (in its AS IS condition) for the
same period. For purposes of present value calculations, Lessor and Lessee
stipulate and agree to a discount rate equal to the Discount Rate

    

    (3)
Alternatively, at the option of Lessor exercised at any time while an Event of
Default in the payment of Basic Rent or Additional Rent is continuing, Lessor
shall be entitled to recover from Lessee, five (5) days after written notice to
Lessee, as liquidated damages, in addition to any other proper claims but in
lieu of and not in addition to any amount which would thereafter have become
payable under other provisions of this clause (ii), the Termination Value as set
forth in Schedule
C hereto, plus, if the. Event of Default which gave rise to Lessor's
exercising its option pursuant to this subpart (3) was an Event of Default under
Section 20(a)(i) of this Lease, any Reinvestment Premium, provided that, if
Lessee shall so request, Lessor, shall at the time of such payment assign and
convey the Leased Property to Lessee, without further consideration, in
accordance with the terms and provisions of Article 15 hereof.

    

    (iii)          
Send written notice, signed by Lessor and consented to in writing by Lessor's
Mortgagee, declaring the Lease forfeited and expressly advising Tenant that it
is relieved of all further rights and obligations under the Lease (except those
obligations which are intended to survive expiration or termination of the
Lease). Absent such written notice, signed by Lessor and consented to in writing
by Lessor's Mortgagee, repossession by Lessor and/or expulsion of Lessee from
the Leased Property shall in no way be construed as a termination of the Lease
or Tenant's obligations thereunder.

    

    (c)           
In the event, and only in the event, that applicable law requires Lessor to
attempt to mitigate damages following the termination of Lessee's rights under
this Lease as provided in (ii) above, Lessor shall use reasonable efforts to the
extent required by applicable law to relet the Leased Property on such terms and
conditions as applicable law permits, provided, however, that (A) Lessor shall
not be obligated to relet the Leased Property before leasing other vacant space
owned or operated by Lessor at the Leased Property as to which Lessor is using
reasonable efforts to relet to the extent required by applicable law, (B) Lessor
reserves the right to refuse to lease the Leased Property to any potential
tenant which does not meet Lessor's reasonable standards and reasonable criteria
for leasing any other comparable space owned or operated by Lessor, and (C)
Lessor shall not be obligated to undertake any greater efforts to relet the
Leased Property than Lessor utilizes to lease any other vacant space owned or
operated by Lessor. In any proceeding in which Lessor's efforts to mitigate
damages and/or its compliance with this subsection is at issue, Lessor shall be
presumed to have used reasonable efforts to mitigate damages, Lessee shall bear
the burden of proof to establish that such reasonable efforts were not used, and
Lessor and Lessee agree that the following shall presumptively be deemed
reasonable efforts to mitigate damages: (i) if Lessor does not have in-house
leasing staff, listing the Leased Property for lease with a licensed commercial
real estate broker experienced in leasing comparable office development projects
in the greater Houston, Texas metropolitan area, (ii) advertising the
availability of the Leased Property for lease in a suitable trade journal or
newspaper at least once a month; and (iii) if a qualified prospect expresses a
desire to inspect the Leased Property, showing the Leased Property to such
prospect or its agent.

    

    (d)           In
the event that Lessor has either repossessed the Leased Property or has
terminated this Lease pursuant to the foregoing provisions of this Lease, Lessor
has the right to enter upon the Leased Property by use of a master key, a
duplicate key, or other peaceable means, and change, alter, and/or modify the
door locks on all entry doors of the Leased Property, thereby permanently
excluding Lessee, and its officers, principals, agents, employees,
representatives and invitees therefrom. Lessor shall not thereafter be obligated
to provide Lessee with a key to the Leased Property at any time, regardless of
any amounts subsequently paid by Lessee; provided, however, that in any such
instance, during. Lessor's normal business hours and at the convenience of
Lessor, and upon receipt of written request from Lessee accompanied by such
written waivers and releases as Lessor may reasonably require, Lessor will
either (at Lessor's option) (A) escort Lessee or its authorized personnel to the
Leased Property to retrieve any Trade Fixtures, furniture, equipment, computers,
personal belongings or other property of Lessee or (B) obtain a list from Lessee
of such personal property as Lessee intends to remove, whereupon Lessor shall
remove such property and make it available to Lessee at a time and place
designated by Lessor. However, if Lessor elects option (B), Lessee shall pay, in
cash in advance, all costs and expenses reasonably estimated by Lessor to be
incurred in removing such property and making it available to Lessee and all
reasonable moving and/or reasonable storage charges theretofore incurred by
Lessor with respect to such property (plus an additional fifteen (15) percent
thereof, to cover Lessor's administrative costs). If Lessor elects to exclude
Lessee from the Leased Property without repossessing or terminating pursuant to
the foregoing provisions of this Lease, then Lessor shall not be obligated to
provide Lessee a key to re-enter the Leased Property until such time as all
delinquent Basic Rent and Additional Rental have been paid in full and all other
defaults, if any, have been completely cured to Lessor's reasonable satisfaction
(if such cure occurs prior to any actual repossession or termination), and
Lessor has been given assurance reasonably satisfactory to Lessor evidencing
Lessee's ability to satisfy its remaining obligations under this Lease. To the
extent permitted by law, the foregoing provision shall override and control any
conflicting provisions of any applicable statute governing the right of a lessor
to change the door locks of commercial Lessees.

    

    (e)           No
receipt of moneys by Lessor from Lessee after a termination of this Lease or of
Lessee's rights under this Lease by Lessor shall reinstate, continue or extend
the Term of this Lease or affect any notice theretofore given to Lessee, or
operate as a waiver of the right of Lessor to enforce the payment of Basic Rent
and/or Additional Rent, and any related amounts to be paid by Lessee to Lessor
then due or thereafter falling due, it being agreed that after the commencement
of suit for possession of the Leased Property, or after final order or judgment
for the possession of the Leased Property, Lessor may demand, receive and
collect any moneys due or thereafter falling due without in any manner affecting
such suit, order or judgment, all such moneys collected being deemed payments on
account of the use and occupation of the Leased Property or, at the election of
Lessor, on account of Lessee's liability hereunder. Lessee hereby waives any and
all rights of redemption provided by any law, statute or ordinance now in effect
or which may hereafter be enacted.

    

    (f)          he
word "re-enter", as used in this Lease, shall not be restricted to its technical
legal meaning, but is used in the broadest sense. No such taking of possession
of the Leased Property by Lessor shall constitute an election to terminate this
Lease and relieve Lessee of any obligations hereunder unless and to the extent
Lessor gives express written notice thereof to Lessee signed by Lessor and
consented to in writing by Lessor's Mortgagee, if any, declaring the Lease
forfeited and expressly advising Tenant that it is relieved of all further
rights and obligations under the Lease.

    

    (g)          
Lessor brings an action to enforce any provision of this Lease in which it is
found that an Event of Default has occurred and in which Lessor is the
prevailing party, then Lessee shall pay to Lessor all reasonable costs and other
reasonable expenses which may become payable as a result thereof, including
reasonable attorneys' fees and reasonable expenses.

    

    (h)          No
right or remedy herein conferred upon or reserved to Lessor is intended to be
exclusive of any other right or remedy, and every right and remedy shall be
cumulative and in addition to any other legal or equitable right or remedy given
hereunder, or at any time existing. The failure of Lessor to insist upon the
strict performance of any provision or to exercise any option, right, power or
remedy contained in this Lease shall not be construed as a waiver or a
relinquishment thereof for the future. Receipt by Lessor of any Basic Rent or
Additional Rent or any other sum payable hereunder with knowledge of the breach
of any provision contained in this Lease shall not constitute a waiver of such
breach, and no waiver by Lessor of any provision of this Lease shall be deemed
to have been made unless made under signature of an authorized representative of
Lessor.

    

    (i)          Notwithstanding
anything contained herein to the contrary and without limitation of anything
contained herein, if a petition is filed by or against Lessee for relief under
Title 11 of the United States Code, as amended (the "Bankruptcy Code"), and
Lessee (including for purposes of this Section, Lessee's successor in
bankruptcy, whether a trustee or Lessee as debtor in possession) assumes and
proposes to assign, or proposes to assume and assign, this Lease pursuant to the
provisions of the Bankruptcy Code to any person or entity who has made or
accepted a bona fide offer to accept an assignment of this Lease on terms
acceptable to Lessee, then notice of the proposed assignment setting forth (i)
the name and address of the proposed assignee, (ii) all of the terms and
conditions of the offer and proposed assignment, (iii) adequate protection of
Lessor's interest in the Leased Property, and (iv) the adequate assurance to be
furnished by the proposed assignee of its future performance under the Lease,
shall be given to Lessor by Lessee no later than twenty (20) days after Lessee
has made or received such offer, but in no event later than ten (10) days prior
to the date on which Lessee applies to a court of competent jurisdiction for
authority and approval to enter into the proposed assignment. Lessor shall have
the prior right and option, to be exercised by notice to Lessee given at any
time prior to the date on which the court order authorizing such assignment is
entered, to receive an assignment of this Lease upon the same terms and
conditions, and for the same consideration, if any, as the proposed assignee,
less any brokerage commissions which may otherwise be payable out of the
consideration to be paid by the proposed assignee for the assignment of this
Lease. Lessor and Lessee agree that "adequate assurance of future performance"
by Lessee and/or any assignee of Lessee pursuant to Bankruptcy Code Section 365
will include (but not be limited to) payment of a security deposit in the amount
of three (3) times the then current monthly Basic Rent and Additional Rent
payable hereunder. In addition, if this Lease is assigned pursuant to the
provisions of the Bankruptcy Code, Lessor (1) may require from the assignee a
deposit or other security for the performance of its obligations under this
Lease in an amount substantially the same as would have been required by Lessor
upon the initial leasing to a lessee similar to the assignee and (2) shall
receive, as additional Basic Rent and/or Additional Rent, any and all sums and
other consideration of whatever nature paid to Lessee for or by reason of the
assignment for the value of this Lease, including any amounts paid to Lessee for
all or part of Lessee's assets in the Leased Property, to the extent in excess
of the reasonable fair market value of such assets, less Lessee's reasonable
direct costs of brokerage commissions, if any, and inducements, if any, paid to
or for the benefit of the assignee. Any person or entity to which this Lease is
assigned pursuant to the provisions of the Bankruptcy Code shall be deemed,
without further act or documentation, to have assumed all of the Lessee's
obligations arising under this Lease on and after the date of such assignment.
Any such assignee shall, upon demand, execute and deliver to Lessor an
instrument confirming such assumption. No provision of this Lease shall be
deemed a waiver of Lessor's rights or remedies under the Bankruptcy Code to
oppose any assumption and/or assignment of this Lease, to require a timely
performance of Lessee's obligations under this Lease, or-to regain possession of
the Leased Property if this Lease has neither been assumed or rejected within
sixty (60) days after the date of the order for relief or within such additional
time as a court of competent jurisdiction may have fixed. Notwithstanding
anything in this Lease to the contrary, all amounts payable by Lessee to or on
behalf of Lessor under this Lease, whether or not expressly denominated as Basic
Rent or Additional Rent, shall constitute "rent" for the purposes of Section
502(b)(6) of the Bankruptcy Code. To the extent permitted by law, Lessor and
Lessee agree that this Lease is a contract under which applicable law excuses
Lessor from accepting performance from (or rendering performance to) any person
or entity other than Lessee within the meaning of Sections 365(c) and 365(e) (2)
of the Bankruptcy Code.

    

    (j)           In
the event of any non-compliance by Lessor with any covenant, duty or obligation
of Lessor under this Lease which continues beyond a reasonable period after
notice from Lessee to Lessor and Lessor's Mortgagee, Lessee's sole remedy shall
be to seek injunctive relief (including the right to seek specific performance).
In no event shall Lessee have the right (and Lessee hereby waives and releases
the right) to seek damages or other relief against Lessor. In seeking such
injunctive relief, Lessee shall not have the burden to prove inadequacy of other
remedies or irreparable harm.

    

    21.            Lessor
Cooperation.

    

    Lessor,
at the sole cost and expense of Lessee, shall execute such instruments and take
such additional action as Lessee may reasonably request (all such action herein
being collectively called the "Lessor Action") in connection
with the following activities ("Specified Activities"): (1) contesting
Taxes and Impositions, (2) subdividing the Leased Property and the Excess Land,
(3) developing and improving the Leased Property, and (4) any other action
necessary for Lessee to receive the full benefit of the terms and provisions of
this Lease, in each case so long as (i) at the time Lessee requests Lessor to
take such Specified Activity, no Default or Event of Default under this Lease
then exists, and (ii) such Specified Activity satisfies all of the following
requirements ("Specified
Requirements"):

    (a)           Such
Specified Activity does not violate or is otherwise not prohibited by any
provision of this Lease, any provision of any loan document, any restrictive
covenant, any Permitted Encumbrance or any Legal Requirement.

    

    (b)           Such
Specified Activity shall not give rise to any Lien or other encumbrance against
the Leased Property.

    

    (c)           Such
Specified Activity shall not adversely affect the fair market value of the
Leased Property.

    

    (d)           Such
Specified Activity shall not result in a sale or forfeiture of all or any
portion of the Leased Property.

    

    (e)           Such
Specified Activity will not result in a forfeiture or subordination of any of
the Lessor's Mortgagee's Liens.

    

    If (x)
Lessee requests Lessor to take a Lessor Action with respect to a given Specified
Activity, (y) such Specified Activity satisfies all of the Specified
Requirements and (z) Lessor fails to take such Lessor Action fifteen (15) days
after Lessee delivers to Lessor both (A) a written request of Lessor to take
such Lessor Action and (B) evidence reasonably satisfactory to Lessor that such
Specified Activity satisfies all of the Specified Requirements, then Lessee, as
its sole and exclusive remedy, shall have the right to take such action on
behalf of Lessor (at Lessee's, sole cost. and expense) as Lessor's
attorney-in-fact. In that connection, Lessor does hereby irrevocably constitute
and appoint Lessee, with full power of substitution, as its true and lawful
attorney-in-fact and agent.with full power and authority to act in Lessor's
name, place and stead under this Section 21 of this Lease after, with respect to
any Specified Activity, the expiration of the fifteen (15) day period referred
to above. Such power-of-attorney shall be deemed to be coupled with an interest,
shall be irrevocable, shall survive the disability, dissolution, liquidation or
other termination of Lessor and shall be binding on all successors and assigns
of Lessor. Lessee shall, as Additional Rent, pay all reasonable costs and
expenses (including attorneys' fees) incurred by Lessor and Lessor's Mortgagee
in connection with the performance by Lessor of its obligations under this
Section 21.

    

    22.            Holdover.

    

    If Lessee
shall holdover after the expiration or termination of the Term of this Lease,
without derogating from any of Lessor's rights hereunder and without granting
any rights of possession to Lessee, in lieu of Lessee's being liable for Basic
Rent during the period of such holdover, Lessee shall be liable to Lessor for a
use and occupancy fee, in an amount equal to 125% of the Basic Rent payable
immediately before such expiration or termination for such period of holdover,
plus all Additional Rent Lessee would have been liable for hereunder had such
expiration or termination not occurred. In addition, Lessee hereby indemnifies
Lessor against all loss, cost, and damage arising from Lessee's failure to
surrender the Leased Property, within fifteen (15) days after Lessee has been
given notice to surrender the Leased Property, in accordance with the terms
hereof. This indemnification shall survive the termination or expiration of this
Lease.

    

    23.           Lien
Waiver.

    

    Lessor
hereby irrevocably, unconditionally and expressly waives any and all Liens on
the property of Lessee and its sublessees, express or implied, statutory or
contractual, that would otherwise serve to secure Lessee's obligations under
this Lease.

    

    24.           Notices.

    

    All
communications herein provided for or made pursuant hereto shall be in writing
and shall be sent by (i) registered or certified mail, return receipt requested,
and the giving of such communication shall be deemed complete on the third
Business Day after the same is deposited in a United States Post Office with
postage charges prepaid, (ii) reputable overnight delivery service with
acknowledgment receipt returned, and the giving of such communication shall be
deemed complete on the immediately succeeding Business Day after the same is
timely deposited with such delivery service, or (iii) hand delivery by reputable
delivery service:

    

    (a)           If
to Lessor, at the address set forth in Item 7 of Schedule
B.

    

    (b)           If
to Lessee, at the address set forth in Item 8 of Schedule
B.

    

    Lessor
will notify Lessee of the name and address of Lessor's Mortgagee, and Lessee
shall deliver (in the manner described above) to such Lessor's Mortgagee at such
address a copy of any notice given by Lessee to Lessor, No notice by Lessee to
Lessor pursuant to the provisions of this Lease shall be deemed effective unless
and until such notice is also so delivered to such Lessor's Mortgagee; and no
notice by Lessor to Lessee pursuant to the provisions of this Lease shall be
deemed effective unless and until such notice is joined in or consented to in
writing by Lessor's Mortgagee. Either party, and Lessor's Mortgagee, may change
the address where notices are to be sent by giving the other party (or parties)
and Lessor's Mortgagee ten (10) days' prior written notice of such change in the
manner provided in this Article 24 for giving notice.

    

    25.           Estoppel
Certificates.

    

    Each
party hereto agrees that at any time and from time to time during the term of
this Lease, it will promptly, but in no event later than ten (10) Business Days
after request by the other party hereto or Lessor's Mortgagee, execute,
acknowledge and deliver to such other party (and, on request, to any current or
prospective mortgagee or prospective purchaser) a certificate stating, to the
best of such party's knowledge, (a) provided such statement is true and correct,
that this Lease is unmodified and in force and effect (or if there have been
modifications, that this Lease is in force and effect as modified, and setting
forth any modifications); (b) the date to which Basic Rent, Additional Rent and
other sums payable hereunder have been paid; (c) in the good faith opinion of
the party executing such certificate, whether or not there is an existing
Default by Lessee in the payment of Basic Rent, Additional Rent or any other sum
required to be paid hereunder, and whether or not there is any other existing
Default by Lessee with respect to which a notice of Default has been served or
of which the signer has Actual Knowledge, and, if there is any such Default,
specifying the nature and extent thereof; (d) in the good faith opinion of the
party executing such certificate, whether or not there are any setoffs, defenses
or counterclaims against enforcement of the obligations to be performed
hereunder existing in favor of the party executing such certificate and if so,
the basis for such claim; (e) provided such statement is true and correct,
stating that Lessee is in possession of the Leased Property or setting forth the
parties in possession and identifying the instruments pursuant to which they
took possession; and (f) stating such other information with respect to the
Leased Property and/or this Lease as may be reasonably requested. Without
limiting the foregoing, Lessee will execute an estoppel certificate in the form
of Exhibit G hereof.

    

    26,           No Merger.

    

    Lessee
agrees that there shall be no merger of this Lease or of any sublease under this
Lease or of any leasehold or subleasehold estate hereby or thereby created with
the fee or any other estate or ownership interest in the Leased Property or any
part thereof by reason of the fact that the same Person may acquire or own or
hold, directly or indirectly, (a) this Lease or any sublease or any leasehold or
subleasehold estate created hereby or thereby or any interest in this Lease or
any such sublease or in any such leasehold or subleasehold estate and (b) the
fee estate or other estate or ownership interest in the Leased Property or any
part thereof

    

    27.            Surrender.

    

    (a)          Upon
the expiration or earlier termination of the Term of this Lease, Lessee shall
peaceably leave and surrender the Leased Property to Lessor in good order and
safe condition, ordinary wear and tear excepted (subject to Lessee's continuing
obligation to maintain the Leased Property in accordance with the maintenance of
other Class A suburban office buildings in the West Sam Houston
Parkway/Interstate 10 (Katy Freeway) area and excepting also any other damage
and conditions not required to be repaired by Lessee under this Lease, and
(except as otherwise provided in paragraph (c) of Article 12) in accordance with
the requirements of Article 10 of this Lease. Lessee shall remove from the
Leased Property on or before such expiration or earlier termination all property
situated thereon which is not the property of Lessor, and shall repair any
damage caused by such removal. Property not so removed shall become the property
of Lessor, and Lessor may cause such property to be removed from the Leased
Property and disposed of, and Lessee shall pay the cost of any such removal and
disposition and of repairing any damage caused by such removal.

    

    (b)          Except
for surrender by Lessee upon the expiration or earlier termination of the Term
hereof, or in response to Lessor's request or in response to rights Lessor
asserts it has, no surrender by Lessee to Lessor of this Lease or of the Leased
Property shall be valid or effective unless agreed to and accepted in writing by
Lessor. If Lessee holds over beyond the scheduled expiration or termination date
of this Lease, the provisions of Article 22 shall apply.

    

    28.           Separability.

    

    Each
provision contained in this Lease shall be separate and independent and the
breach of any such provision by Lessor shall not discharge or relieve Lessee
from its obligation to perform each obligation of this Lease to be performed by
Lessee. If any provision of this Lease or the application thereof to any Person
or circumstance shall to any extent be invalid and unenforceable, the remainder
of this Lease, or the application of such provision to persons or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each provision of this Lease shall be valid and
enforceable to the extent permitted by law.

    

    29.           Signs;
Showing.

    

    During
the three (3) month period preceding the date on which the then current Term of
this Lease shall expire, Lessor may place signs in reasonable locations on the
grounds in front of the Leased Property advertising that the same will be
available for rent or purchase, and at any time during the Term, upon not less
than twenty-four (24) hours notice to Lessee, Lessor may, in a manner which does
not unreasonably interfere with occupants of the Leased Property, show the
Leased Property to prospective lessees or purchasers and their respective
representatives during normal business hours as Lessor may elect.

    

    30.            Intentionally
Omitted.

    

    31.            Recording.

    

    Lessor
and Lessee will execute, acknowledge, deliver and cause to be recorded or fled
or, at Lessee's expense, registered and re-recorded, re-filed or re-registered
in the manner and place required by any present or future law, a memorandum of
lease thereof, and all other instruments, including, without limitation,
releases and instruments of similar character, which shall be reasonably
requested by Lessor or Lessee as being necessary or, appropriate in order., to
protect their respective interests in the Leased Property.

    

    32.           Miscellaneous.

    

    This
Lease shall be binding upon and shall inure to the benefit of and be enforceable
by the parties hereto and their respective successors and assigns permitted
hereunder. Nothing herein shall restrict the right of Lessor to convey the
Leased Property or interests therein or interests in Lessor without the consent
of Lessee. Recourse for the breach of any obligation of Lessor hereunder shall
be limited to Lessor's interest in the Leased Property and the indemnity in
favor of Lessee by Beltway Associates Holdings LLC, and in no event shall Lessee
have recourse to Lessor personally, or its members, managers, trustees or
beneficiaries or to any other assets of Lessor. Concurrently with the execution
and delivery of this Lease, Lessee shall cause to be delivered to Lessor and
Lessor's Mortgagee an opinion of counsel to Lessee, reasonably satisfactory in
form and substance to Lessor and Lessor's Mortgagee, as to the due
authorization, execution and delivery of this Lease by Lessee and the validity,
binding effect and enforceability as to Lessee of this Lease and such other
matters relating to Lessee and this Lease as Lessor or Lessor's Mortgagee may
reasonably request. To the extent Lessor or Lessor's Mortgagee, acting in a
commercially reasonable manner, should at any time during the Term of this Lease
require any additional documents to be executed by Lessee to further document or
affirm compliance with Lessee's agreements hereunder or under any related
documents, the Lessee shall promptly comply with said request and execute such
documents. The provisions of the immediately preceding sentence shall
reciprocally apply for the benefit of Lessee with regard to Lessor and Lessor's
Mortgagee. Lessee shall, as Additional Rent, pay any reasonable in-house or
outside counsel attorneys' fees and expenses incurred by Lessor's Mortgagee and
Lessor in connection with said matters (if requested by Lessee), or if Lessee
shall request any modifications, waiver or other action hereunder (without
implying any obligation on Lessor's part to consent to the same). This Lease may
not be amended, changed, waived, discharged or terminated in whole or in part in
any manner other than by an instrument in writing duly executed by the party
against whom enforcement thereof is sought. No failure, delay, forbearance or
indulgence on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, or as an acquiescence in any
breach, nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. This Lease and the rights and obligations in
respect hereof shall be governed by, and construed and interpreted in accordance
with, the internal local laws of the State of Texas within which the Leased
Property is located and not in accordance with any conflict of laws rule or
choice of law rule making applicable the law of some other jurisdiction (other
than the United States of America). All headings are for reference only and
shall not be considered as part of this Lease. This Lease may be executed in any
number of counterparts, each of which shall be an original, and such
counterparts together shall constitute but one and the same instrument. TIME IS
OF THE ESSENCE as to the time periods set forth pursuant to each provision of
this Lease. Under no circumstance shall Lessor be deemed to have acted
negligently, grossly negligently or willfully merely by Lessor's ownership of
the Leased Property, and in no event shall any occurrence relating to the Leased
Property, whether negligent or willful, be imputed to Lessor by reason of
Lessor's interest in the Leased Property, it being understood that all stated
obligations of Lessee under the Lease Documents are the responsibility of
Lessee. In order to have acted negligently, grossly negligently or willfully, a
court of competent jurisdiction must have determined that Lessor committed an
affirmative act. Whenever Lessor is allowed or required to give its consent or
approval of any matter under this Lease or to deliver any estoppel or other
instrument, Lessee's sole remedy for Lessor's failure to give such consent or
approval or instrument in accordance with the applicable provision of this Lease
shall be to compel such approval or delivery. In no event and under no
circumstance may Lessee recover any monetary damages for such failure or
terminate or otherwise modify this Lease. Lessor and Lessee agree that this
Lease is a true lease and does not represent a financing arrangement. Each party
shall reflect the transaction represented hereby in all applicable books,
records and reports (including tax filings and financial reports) in a manner
consistent with "true lease" treatment rather than "financing"
treatment.

    

    33.            Lessee
Representations.

    

    Lessee
represents and warrants to Lessor that the following are true and correct as of
the date hereof:

    

    (a)         Due Organization.
Lessee is a corporation duly organized, validly existing and in good standing
under the laws of the state of Delaware and qualified to do business in, and in
good standing under the laws of, the state in which the Leased Property is
located and all other jurisdictions where its business requires qualification
and the failure to do so would have a material adverse effect on Lessee. Lessee
has the necessary corporate power and authority to conduct its business as now
conducted and to sell and lease the Leased Property.

    

    (b)           Due Authorization; No
Conflict. This Lease, the SNDA and all,other documents signed or to be
signed by Lessee in relation hereto have been duly authorized by all necessary
corporate action on the part of Lessee and have been duly executed and delivered
by Lessee, and the execution, delivery and performance thereof by Lessee will
not (i) require any approval or consent of the stockholders of Lessee or any
approval or consent of any trustee or holder of any indebtedness or obligation
of Lessee or any approval or consent of any Governmental Authority, other than
such consents and approvals as have been obtained, (ii) contravene any Legal
Requirements binding on Lessee or (iii) contravene or result in any breach of or
constitute any Default under Lessee's charter or by-laws or other organizational
documents, or any indenture, mortgage, loan agreement, contract, partnership or
joint venture agreement, lease or other agreement or instrument to which Lessee
is a party or by which Lessee is bound, or result in the creation of any Lien
upon any of the property of Lessee, to the extent that such breach, Default or
creation of Lien would have a material adverse effect on the ability of Lessee
to sell the Leased Property and/or to perform its obligations under this Lease,
or be a material breach or Default, or result in a Lien arising, under a
material indenture, mortgage, loan agreement, lease or other
agreement.

    

    (c)           Enforceability. This
Lease, the SNDA and all other documents signed or to be signed by Lessee related
hereto, are each a legal, valid and binding obligation of Lessee, enforceable
against Lessee in accordance with the terms thereof, except as enforceability
may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors', mortgagees' or
Lessors' rights in general or (ii) enforcement of equitable
remedies.

    

    (d)           Investment Company; Public
Utility Holding Company. Lessee is not an "investment company" or a
company "controlled" by an "investment company" within the meaning of the
Investment Company- Act of 1940, as amended. Lessee is not a "holding company"
or a "subsidiary company" of a "holding company" or an "affiliate" of a "holding
company" or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or a "public utility" within the meaning of the
Federal Power Act, as amended.

    

    (e)            Certificates of
Occupancy. There is a valid permanent certificate of occupancy for the
Leased Property.

    

    (f)            Bankruptcy. No
bankruptcy, reorganization, arrangement or insolvency proceedings are pending,
threatened or contemplated by Lessee. Lessee has not made a general assignment
for the benefit of creditors and Lessee is able to pay its debts as they become
due.

    

    (g)            Rents. Lessee has not
paid Basic Rent to Lessor (or any of the Indemnified Parties) more than thirty
(30) days in advance, and no Basic Rent payable hereunder has been waived,
released, or otherwise discharged or compromised by Lessor (or any of the
Indemnified Parties). Lessee is not entitled to any period of free rent or any
offset, credits or rights of abatement against Lessee's obligation to pay Basic
Rent hereunder.

    

    (h)            Liens. Immediately
prior to the execution of this Lease, Lessee conveyed the Leased Property to
Lessor free and clear of all Liens other than the Permitted
Encumbrances,

    

    (i)             Criminal Proceedings.
Lessee is not the subject of a pending criminal proceeding.

    

    (j)             Tax Filings. All tax
returns and reports of Lessee required by law to be filed have been duly filed,
and all Taxes of any Governmental Authority upon Lessee and upon the assets or
income of Lessee (other than the Leased Property), which are due and payable and
are not being contested by Lessee, have been paid or accrued, where the failure
to do so would have a material adverse effect on Lessee. All Taxes and
Impositions of any Governmental Authority upon the Leased Property, which are
due and payable, have been paid. All Tax contests are being performed consistent
with the terms of the Lease.

    

    (k)              Condemnation. To
Lessee's Actual Knowledge, no Taking has been commenced or has been announced as
being contemplated with respect to all or any portion of the Leased Property or
for the relocation of roadways providing access to the Leased
Property.

    

    (1)              
Utilities and Public
Access. To Lessee's Actual Knowledge, the Leased Property has adequate
rights of access to dedicated public ways (and the Leased Property makes no
material use of any means of access or egress that is not pursuant to such
dedicated public ways or recorded, irrevocable rights-of-way or easements) and
is served by adequate water, sewer, sanitary sewer and storm drain facilities.
To Lessee's Actual Knowledge, all public utilities and facilities necessary for
the full use and enjoyment of the Leased Property are located in the public
right-of-way or in or through a recorded irrevocable easement in favor of the
Leased Property. To Lessee's Actual Knowledge, all such utilities and facilities
are connected so as to serve the Leased Property without passing over other
property, except to the extent that such utilities are accessible to the Leased
Property by virtue of a recorded, irrevocable easement or similar agreement or
right. To Lessee's Actual Knowledge, all roads necessary for the utilization of
the Leased Property for its current purpose have been completed, and such roads
have been dedicated to public use and accepted by all Government
Authorities.

    

    (m)            Condition,
Compliance. To the Lessee's Actual Knowledge, (i) the Improvements are
structurally sound, in good condition, free of any material damage that would
affect the value of the Leased Property and are free of structural defects and
all Building Systems are in good working order and condition; (ii) the Leased
Property and the Excess Land constitute one separate tax lot for purposes of ad
valorem taxation and such tax parcel does not include any property not a part of
the Leased Property and the Excess Land; (iii) the Leased Property is lawfully
occupied by Lessee under the Lease; and (iv) the Leased Property is in
compliance with all Legal Requirements and all covenants and restrictions
affecting the Leased Property, occupancy, use or operation of such Leased
Property, and the use of the Leased Property is not a pre-existing,
non-conforming use. No notice of the violation of any Legal Requirements have
been received by Lessee. To Lessee's Actual Knowledge, all Permits required by
Legal Requirements or by insurance standards or otherwise to be made or issued
with respect to the lawful construction, use and occupancy of the Leased
Property, have been made or have been obtained from the appropriate Governmental
Authorities and are valid and in full force and effect. To Lessee's Actual
Knowledge, the Leased Property and all Improvements thereon do not require any
rights over, or restrictions against, other property in order to comply with any
Legal

    Requirements.

    

    (n)          Leases; Subleases.
Except for this Lease, there are no leases or subleases affecting all or any
portion of the Leased Property in existence on the date hereof, and no person
has any possessory interest in, or right to occupy, the Leased Property except
Lessee pursuant to this Lease.

    

    (o)           Ratings. To Lessee's
Actual Knowledge, Lessee has not suffered a "rating downgrade," a negative
change in "rating outlook," or a designation of "Credit Watch" with negative
implications (whether published or orally conveyed to Lessee) with respect to
Lessee's corporate credit rating of "A- (Outlook Stable)" as ascribed by S&P
and Lessee's senior unsecured credit rating of "Baal (Outlook Stable)" as
ascribed by Moody's.

    

    (p)           Pending Actions,
There are no actions, suits or proceedings in or by or before any Governmental
Authority now pending or, to Lessee's Actual Knowledge, threatened against or
affecting Lessee or the Leased Property which, if adversely decided, would
prevent the consummation of the transaction contemplated by the Lease, impair
Lessee's ability to perform its obligations under this Lease, materially impair
the Leased Property or give rise to a Credit Rating Downgrade with respect to
Lessee. Without limiting the generality of the foregoing, to Lessee's Actual
Knowledge, no judgment, Lien, suit, action or legal, administrative, arbitration
or other proceeding, or any change in the zoning or building ordinances
affecting the Leased Property is pending against Lessee or the Leased Property
which could result in a material adverse change in the Leased Property or the
financial condition of Lessee, in a judgment or Lien against Lessee or the
Leased Property, or in a rezoning of the Leased Property (or any part
thereof).

    

    (q)           Parties in
Possession. There are no parties in possession of the Leased Property,
except Lessee.

    

    (r)           Individual Sewer
Systems. Lessee does not have Actual Knowledge of any individual sewer
system on the Leased Property.

    

    (s) Driveways. To
Lessee's Actual Knowledge, all curb cuts, driveways and traffic signals shown on
the survey delivered to Lessee before the execution and delivery of this Lease
and material to the use and value of the Leased Property for their intended
purposes are existing and have been fully approved by the appropriate
Governmental Authority.

    

    (t)           Casualty Damage. The
Leased Property is free from unrepaired damage caused by Casualty.

    

    (u)           Sales and Payroll
Taxes. To Lessee's Actual Knowledge, the Leased Property is free from any
past due obligations for sales and payroll taxes.

    

    (v) Title. Lessee will,
on behalf of Lessor, forever warrant and defend Lessor's title to the Leased
Property against any and all claims whatsoever arising by, through or under
Lessee and will forever warrant and defend the validity and priority of the Lien
created under the Mortgage against claims of all persons and parties whatsoever
arising by, through or under Lessee, subject to the Permitted Encumbrances and
any Liens created by Lessor or its successors or assigns. The foregoing warranty
of title shall survive the foreclosure of the Mortgage and shall inure to the
benefit of and be enforceable by the Lessor's Mortgagee if the Lessor's
Mortgagee acquires title to the Leased Property. Under no circumstances shall
any third party, including any title insurer, be a beneficiary of the
representation and warranty made in this paragraph.

    

    34.           Building
Name.

    

    (a)            Lessee
may retain and use its existing signage on the Leased Property and Lessee has
the sole and exclusive right to change the signage on the Leased Property in its
sole and absolute discretion, subject to applicable Legal
Requirements.

    

    (b)            Lessee
may retain and use the existing building name. Lessee shall have the sole and
exclusive right to change the name of the building in its sole and absolute
discretion.

    

    35.           Reciprocal Easement
Agreement; Variance.

    

    (a)            Reference
is hereby made to that certain Reciprocal Easement Agreement ("REA") of even effective date
herewith executed by Lessee, as owner of fee simple title to the Excess Land,
Lessor, as owner of fee simple title to the Land, and Lessee, as lessee of the
Leased Property. Lessee shall fully and timely perform and discharge all of the
obligations of Lessor under the REA; provided, however, Lessee shall not execute
any instrument (such as, but not by way of limitation, any amendment, consent or
waiver) under or otherwise relating to the REA. Additionally, Lessee shall not
use the first floor of the office building ("Building") currently
situated on the Land for office use, retail use, or any other use which, under
then applicable Legal Requirements, would increase the parking requirement
attributable to the Building unless and until Lessee adds on the Land and/or the
Excess Land additional parking spaces allocated to the Building such that the
Building is in full compliance with all Legal Requirements, including, but not
limited to, those relating to parking.

    

    (b)            Reference
is hereby made to the New Variance Documents (as such term is defined in the
REA), which, among other things, granted the New Variance (as such term is
defined in the REA). The New Variance consists of (1) a variance ("New Variance Regarding Parking") of or to the parking
requirements attributable to the Building imposed by the Covenants (as such term
is defined in the REA) and (2) a variance ("New Variance Regarding Building Sites") of or to
various provisions of the Covenants which may be violated by the Land and the
Excess Land each being a separate "building site" under the Covenants instead of
the Land and the Excess Land, taken as a whole, being one "building site". If,
for any reason whatsoever, including without limitation, failure of Lessee to
perform any of its obligations under the New Variance Documents, failure of
Lessee to satisfy any of the conditions set forth in the New Variance Documents
or otherwise, either of the variances comprising the New Variance terminates or
otherwise becomes ineffective during the Term (the date on which either Variance
terminates or otherwise becomes ineffective herein being called a "New Variance Termination
Date"),
then:

    

    
      	
              (i)  

            	
              If
      the New Variance which terminates or otherwise becomes ineffective is the
      New Variance Regarding Parking, then, within six (6) months after the New
      Variance Termination Date occurs with respect to such New Variance
      Regarding Parking, Lessee shall add on the Land and/or the Excess Land
      additional parking spaces allocated to the Building such that the Building
      is in full compliance with all Legal Requirements (taking into account
      that such New Variance Regarding Parking has terminated or otherwise
      became ineffective).

            

    

    

    
      	
               
      (ii)  

            	
              If
      the New Variance which terminates or otherwise becomes ineffective is the
      New Variance Regarding Building Sites, then, within six (6) months after
      the New Variance Termination Date occurs with respect to such New Variance
      Regarding Building Sites, Lessee shall take such action that is necessary
      such that the Land is in full compliance with all Legal Requirements
      (taking into account that the New Variance Regarding Building Sites has
      terminated or otherwise became ineffective with the result that the Land
      is itself a separate "building site" under the Covenants and the New
      Variance Documents), including taking all of the actions contemplated in
      the New Variance Documents.

            

    

    

    The
provisions of this subpart (b) shall survive termination or expiration of this
Lease with respect to a New Variance Termination Date which occurs during the
Term.

    

    (c)          Lessee
shall fully and timely perform and discharge all of the obligations of Lessor
under the New Variance Documents. Additionally, Lessee shall fully and timely
perform and discharge all of the obligations of Lessee under the Ancillary
Letter (as such term is defined in the REA), regardless of whether any such
obligation pertains to the Land, the Excess Land or both tracts of
land.

    

    (d)          Pursuant
to the Ancillary Letter, Lessee shall use diligent efforts to prevent on-street
parking by occupants and tenants of the Building (and the remainder of . the
Leased Property) and each of their guests and invitees in accordance with the
provisions of paragraph 6 of the Covenants. Additionally, Lessee agrees that any
sublease of all or any portion of the Building or the Land will contain
covenants requiring subtenants of Lessee to also use such diligent efforts to
prevent on-street parking. From time to time, upon request of the Administrator
(as such term is defined in the REA), Lessee will provide the Administrator a
written. summary of Lessee's efforts to prevent such on-street parking and
copies of any subleases to evidence compliance with this subpart
(d).

    

    (e)          Pursuant
to paragraph 4 of the Ancillary Letter, Lessor hereby acknowledges the Ancillary
Letter and its obligation to comply with its terms as it relates to the Land.
Lessee acknowledges that during the Term, Lessee shall be obligated to comply
with the terms of the Ancillary Letter as it relates to the Land. Lessee further
acknowledges that in the event it obtains title to the Land pursuant to Section
15 of this Lease, Lessee acknowledges the Ancillary Letter and its obligation to
comply with its terms as it relates to the Land.

    

    36.           Limitation on
Damages.

    

    To the
extent permitted by applicable law, both parties hereto waive any right to
punitive damages and to speculative damages. The foregoing waiver shall not
limit either party's right to prove actual damages caused by the act or omission
of the other, such as, by way of example only, Lessor's liability to its lender
for premiums or penalties resulting from an Event of Default hereunder, the loss
or reduction in coverage of a residual value insurance policy because Lessee
failed to maintain the Leased Property in accordance with the terms of the
Lease, or liability to governmental agencies or private litigants arising out of
environmental contamination which was in violation of this Lease.

    

    

    

    

    

    

    

    

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

    

    Lessor:

    

    BELTWAY
ASSETS LLC

    

    
      	
              By:

            	
                               /s/  J.
      Richard Rosenberg

            

    

    Name:   J.
Richard Rosenberg

    Title:    Vice
President and Chief Financial Officer

    

    

    Lessee:

    

    COOPER
CAMERON CORPORATION

    

    
      	
              By:

            	
                               /s/  Michael
      C. Jennings

            

    

    Name:  Michael
C. Jennings

    Title:    Vice
President and Treasurer

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    APPENDIX
I

    

    DEFINITIONS

    

    Actual Knowledge by
the Lessor or Lessee with respect to any matter means the present actual
knowledge of such matter by any Executive Officer after reasonable investigation
and inquiry. Actual Knowledge shall be presumed conclusively as to the content
of any notice to Lessor or Lessee, respectively, made in accordance with the
provisions of this Lease.

    

    Administrator is
defined in the REA and referred to in Section 35 hereof. Additional Rent is
defined in paragraph (b) of Article 3.

    

    Affiliate of any
Person means, at any time, any other Person or group acting in concert in
respect of the Person in question that directly or indirectly controls, is
controlled by or is under common control with, such Person. For purposes of this
definition, the term "control" (including the correlative meanings of the terms
"controlling" controlled by" and "under common control with"), as used with
respect to any Person, means the possession, directly or indirectly, of the.
power to direct or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise.

    

    Alterations means
alterations, installations, renovations, demolitions, modifications,
replacements, improvements, changes or additions to the Leased
Property.

    

    Ancillary Letter is
defined in the REA and referred to in Section 35 hereof.

    

    Appurtenant Rights
means all of Lessor's right, title, or interest in all easements, privileges,
appurtenances, tenements, hereditaments, rights of way or use, rights of ingress
or egress and any other rights and benefits belonging or pertaining to the Land
or the Improvements, including, the use of any streets, ways, alleys, vaults or
strips of land adjoining, adjacent or contiguous to the Land, and all Permits
and other rights whether or not of record, appurtenant to the Land.

    

    Bankruptcy Code means
Title 11 of the United States Code or any other Federal or state bankruptcy,
insolvency or similar law, now or hereafter in effect in the United
States.

    

    Basic Rent is defined
in paragraph (a) of Article 3.

    

    Basic Term is defined
in paragraph (a) of Article 2.

    

    Basic Term Expiration
Date means the date specified in Item 5 of Schedule
B.

    

    Building Systems
means the mechanical, electrical, plumbing, security and safety systems,
including, by way of example, the heating, ventilation and air-conditioning
equipment, affixed or attached to, or contained in the
Improvements.

    

    Business Day means
any day except Saturdays, Sundays or a day on which commercial banks located in
the State of New York are authorized or required to be closed.

    

    Casualty is defined
in paragraph (a) of Article 12.

    

    Casualty Event of
Loss is defined in Section 12(c)(x).

    

    Certificate Holder
means, as of any particular date, any holder of interests that evidence
ownership interests in the assets of a trust that is holding a loan secured by a
Mortgage or that is holding participation interests in a loan secured by a
Mortgage.

    

    Closing means the
closing for the acquisition of the Leased Property by Lessor and the leasing of
the Leased Property by Lessor to Lessee.

    

    Closing Date means
the date fixed for the purchase of Lessor's interest in the Leased Property
pursuant to any of the provisions of this Lease.

    

    CMBS is defined in
the definition of Lessor's Mortgagee.

    

     Commencement Date
means the date specified in Item 4 of Schedule
B.

    

    Condemnation Event of
Loss is defined in Section 12(c)(y).

    

    Covenants is defined
in the REA.

    

    Credit Rating
Downgrade means at any time during the Term if Lessee suffers a "rating
downgrade," a negative change in "rating outlook," or a designation of "Credit
Watch" with negative implications (whether published or orally conveyed to
Lessee) such that the resulting credit rating is below either Minimum Credit
Rating.

    

    Default means any
event or condition the occurrence or existence of which would, with notice or
lapse of time or both, become an Event of Default.

    

    Depositary is defined
in paragraph (b) of Article 12. Destruction is
defined in paragraph (a) of Article 12.

    

    Discount Rate means
6% per annum.

    

    Environmental Laws
means the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq.), as amended
by the Hazardous and Solid Waste Amendments of 1984, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. §9601 et seq.), as amended by
the Superfund Amendments and Reauthorization Act of 1986, the Hazardous
Materials Transportation Act (49 U.S.C. § 1801 et seq.), the Toxic
Substances Control Act (15 U.S.C. §2601 et seq.), the Clean
Air Act (42 U.S.C. §7401 et seq.), the Clean
Water Act (33 U.S.C. §1251 et seq.) the Federal
Insecticide, Fungicide and Rodenticide Act (7 U.S.C. §136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. §651 et seq.) and all
applicable federal, state and local environmental laws, including obligations
under the common law, ordinances, rules, regulations and publications, as any of
the foregoing may have been or may be from time to time amended, supplemented or
supplanted, and any other Legal Requirements, now or hereafter existing relating
to regulation or control of Hazardous Substances or environmental protection,
the impact of environmental quality on human health and environmental
safety.

    

    Environmental Site
Assessment means the environmental site assessment specified in Item 9 of
Schedule
B.

    

    Event of Default is
defined in paragraph (a) of Article 20.

    

    Excess Land means the
tract of land described on Exhibit H attached hereto.

    

    Executive Officer
means the President, Executive Vice President, Treasurer, Chief Financial
Officer, Director of Real Estate or if such office does not exist, its closest
equivalent.

    

    Garage is defined in
Section 10(c) hereof.

    

    Governmental
Authority means any federal, state, county; municipal or other
governmental or regulatory, arbitrator, board, body, commission, court,
instrumentality, or other administrative, judicial, quasi-governmental or,
quasi-judicial tribunal, authority or agency of competent authority (or private
Person in lieu thereof).

    

    Hazardous Substances
means (i) those: substances (whether solid, liquid or gas), included within the
definitions of or identified as "hazardous substances," "hazardous materials,"
or "toxic substances" in or pursuant to, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act of 1980 (42 U.S.C.
§9601et seq.)
(CERCLA), as amended by Superfund Amendments and Reauthorization Act of 1986
(Pub. L. 99-499, 100 Stat. 1613) (SARA), the Resource. Conservation and Recovery
Act of 1976 (42 U.S.C., § 6901 et seq.)
(RCRA),  the Occupational Safety and Health Act of 1970 (29 U.S.C. §
651 et seq.),
(OSHA), and the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., and in the
regulations promulgated pursuant to said laws, all as amended; (ii) those
substances listed in the United States Department of Transportation Table (40
CFR 172.101 and amendments thereto) or by the Environmental Protection Agency
(or any successor agency) as hazardous substances (40 CFR Part 302 and
amendments thereto); (iii) any material, waste, substance, pollutant or
contamination which is or contains (A) petroleum, its derivatives, by-products
and other hydrocarbons, including crude oil or any fraction thereof, natural
gas, or synthetic gas usable for fuel or any mixture thereof, (B) asbestos
and/or asbestos-containing materials in any form that is or could become
friable, (C) polychlorinated biphenyls, (D) designated as "hazardous substance"
pursuant to Section 311 of the Clean Water Act (33 U.S.C. § 1251 et seq.), (33 U.S.C. § 1321)
or listed pursuant to Section 307 of the Clean Water Act (33 U.S.C. § 1317); (E)
flammable explosives; (F) radioactive materials; and (iv) such other substances,
materials, wastes, pollutants and contaminants which are or become regulated as
hazardous, toxic or "special wastes" under applicable local, state or federal
law, or the United States government, or which are classified as hazardous,
toxic or as "special wastes" under any Legal Requirements.

    
 

    Improvements means
all buildings, facilities, structures, additions, extensions and other
improvements now or hereafter existing on the Land and fixtures appurtenant
thereto and any and all Alterations thereto.

    

    
      	
               
      

            	
              Indemnified
      Liabilities is defined in paragraph (a) of Article
  8

            

    

    

    Indemnified Parties
is defined in paragraph (a) of Article 8.

    

    Indenture Trustee
means Wells Fargo Bank Northwest, N.A., as Trustee acting on behalf of the
Registered Certificateholders from time to time of Legg Mason Mortgage Capital
Corporation Lease-Backed Pass-Through Trust, Series 2002-CTL-28, and each
successor indenture trustee, as indenture trustee under any trust for the
benefit of the Certificate Holders.

    

    Installment Payment
Dates is defined in paragraph (a) of Article 3.

    

    Institutional
Investor means a bank, insurance company, a bank affiliate or wholly
owned subsidiary of any such bank, or any other financial or lending institution
organized under the laws of the United States or any state thereof or Canada or
any province thereof with a net worth of at least US $25,000,000, including,
without limitation, a real estate investment trust and/or trust, corporation or
other Person engaged in so-called conduit lending, or a public or private
pension plan or institutionally managed fund having gross assets of at least US
$100,000,000.

    

    Insurance Premiums is
defined in paragraph (e) of Article 13.

    

     Insurance
Requirements is defined in paragraph (a) of Article 13.

    

    Land means that
certain parcel of real property more particularly described in Schedule A
hereto.

    

    Lease Documents means
this. Lease, that certain SNDA dated on or about the date of this Lease among
Lessor, Lessee and Lessor's Mortgagee and that certain estoppel letter datedon
or about the date of this Lease executed by Lessee.

    

    Leased Property
means, collectively, the Land, the Improvements, the Building Systems and the
Appurtenant Rights.

    

    Legal Requirements
means (i) all present and future applicable laws, statutes, treaties, rules,
orders, ordinances, codes, regulations, requirements, Permits, and
interpretations by, and applicable judgments, decrees, injunctions, writs,
orders and like action of any Governmental Authority (including, without
limitation, those pertaining to health, safety or the environment and the
Americans with Disabilities Act), whether or not such are within the present
contemplation of Lessor or Lessee, and (ii) any reciprocal easement agreement
(including the REA), development agreement, deed restriction (including the
Covenants and the New Variance Documents), or similar agreement relating to the
Leased Property, or the Improvements, or the facilities or equipment thereon or
therein, or the streets, sidewalks, vaults, vault spaces, curbs and gutters
adjoining the Leased Property, or the appurtenances to the Leased Property, or
the franchises and privileges connected therewith. For purposes of determining
Legal Requirements, it shall be deemed that the variance (or any similar
variance) with respect to parking set forth on page 2 of that certain letter
dated November 3, 2000, executed by Wolff Administrators, L.L.C., and in favor
of Cooper Cameron Corporation is of no force or affect.

    

    
      	
               
      

            	
              Lessee's Loss
      is defined in paragraph (a) of Article
12.

            

    

    

    
      	
               
      

            	
              Lessor Action
      is defined in Article 21 hereof.

            

    

    

    Lessor's Mortgagee
means any lender holding a Lien granted by Lessor on the Leased Property. The
term "Lessor's Mortgagee" shall include the servicer and/or trustee with respect
to the pool of collateral for any commercial mortgage-backed securities or
mortgage pass-through certificates or other securities evidencing a beneficial
interest in a rated or unrated public offering or private placement
(collectively, "CMBSs")
into which pool Lessor's Mortgage or other Lien instrument covering the Leased
Property or interest in Lessor's Mortgagee or other Lien instrument has been
sold, assigned, transferred or pledged and also the issuer of such CMBSs. Any
references in this Lease to Lessor's Mortgagee at a time, if any, when there is
no Lessor's Mortgagee shall be construed to mean "Lessor's Mortgagee, if
any."

    

    Lien means any
charge, pledge, lien, option, security interest or encumbrance of any kind or
any other preferential arrangement that has the practical effect of creating a
security interest.

    

    Loan Documents shall
mean the Note, the Mortgage, and all other documents executed as security for
the Note or otherwise executed in connection with or relating to the
Note.

    

    Minimum Alterations
Conditions is defined in Section 10(c) hereof.

    

    Minimum Credit Rating
means the existence, with respect to Lessee, of both (a) a corporate credit
rating of "BBB- (Outlook Stable)" or better as ascribed by S&P and (b) a
senior unsecured credit rating of "Baa3 (Outlook Stable)" or better as ascribed
by Moody's.

    

    Moody's means Moody's
Investor Services, Inc., and any successor thereto.

    

     Mortgage is defined
in paragraph (b) of Article 7.

    

    Net Award shall mean
the entire award, compensation, insurance proceeds or other payment, if any, by
reason of or on account of any Destruction, less any expenses reasonably
incurred by Lessor or Lessor's Mortgagee in obtaining such award, compensation,
insurance proceeds or other payment and any cost and expense of either in
connection with the administration of the distribution of the same and not
already paid (or reimbursed to Lessor or Lessor's Mortgage), plus any investment
income earned with respect to the foregoing amounts.

    

    New Variance is
defined in the REA and referred to in Section 35(b) hereof.

    

    New Variance
Documents is defined in the REA and referred to in Section 35(b)
hereof.

    

    New Variance Regarding
Building Sites is defined in Section 35(b) hereof.

    

    New Variance Regarding
Parking
is defined in Section 35(b) hereof.

    

    New Variance Termination
Date is defined in Section 35(b) hereof

    

    Note means the Note
(or Notes) of Lessor secured by any "Mortgage" issued on the Leased Property
from time to time.

    

    Officer's Certificate
means a certificate executed on behalf of Lessee by an Executive Officer of
Lessee who has made or caused to be made such examination or investigation as is
reasonably necessary to enable such Executive Officer to express a good faith
informed opinion about the subject matter of such Officer's
Certificate.

    

    Outside Restoration
Date is defined in paragraph (b) of Article 12.

    

    Overdue Rate is
defined in paragraph (b) of Article 3.

    

    Permitted
Encumbrances means, with respect to the Leased Property: (a) rights
reserved to or vested in any Governmental Authority to condemn, appropriate,
recapture or designate a purchaser of the Leased Property; (b) any Liens thereon
for Taxes and Impositions and any Liens of mechanics, materialmen and laborers
for work or services performed or material furnished in connection with the
Leased Property, which are not yet due and payable, or the amount or validity of
which are being contested as permitted by Article 6 hereof; (c) easements,
rights-of-way, servitudes, zoning laws, use regulations, and other similar
reservations, rights and restrictions and other minor defects and irregularities
in the title to the Leased Property existing on the Commencement Date or granted
in accordance with Article 21 hereof; (d) the Lien of any Mortgage and any
assignment of this Lease as further security for the Note secured by such
Mortgage; (e) all other matters affecting title existing on the date of this
Lease as set forth in Schedule D; (f) the
REA; (g) the Covenants; and (h) the New Variance Documents.

    

    Permits means all
licenses, authorizations, certificates (including certificates of occupancy),
variances, concessions, grants, registrations, consents, permits and other
approvals issued by a Governmental Authority now or hereafter pertaining to the
ownership, management, occupancy, use, operation, maintenance, Alteration or
Restoration of the Leased Property.

    

    Person means any
individual, corporation; partnership,. limited liability company, joint,
venture, association, joint. stock company, trust, trustee of a trust,
unincorporated organization, Governmental Authority or any other
entity.

    

    Policies are defined
in paragraph (a) of Article 13.

    

    Rating Agencies mean
S&P and Moody's.

    

    REA is defined in
Section 35(a) hereof.

    

    Reinvestment Premium
means the amount computed in accordance with Schedule
C.

    

    Release of Hazardous
Substances means the release or threatened release of any Hazardous
Substances into or upon any land or water or air, or otherwise into the
environment, including, by means of burying, disposing, discharging, injecting,
emptying, emitting, spilling, leaking, flowing, seeping, leaching, dumping,
pumping, pouring, escaping, placing and the like.

    

    Renewal Term is
defined in paragraph (b) of Article 2.

    

    Restore or Restoration means if
the Leased Property suffers a Destruction by a Casualty or a Taking, to restore,
repair, replace, rebuild and/or improve the Leased Property, as nearly as
practicable, to the following condition:

    

    i. With
respect to a Casualty, a condition which is consistent with the use clause set
forth in this Lease, which has a value, utility and remaining useful life as
nearly as reasonably practical equal to the value, utility and remaining useful
life of the Leased Property immediately prior to such Casualty and which is in
substantial accordance with plans and specifications which have been approved by
Lessor (such approval shall not be unreasonably withheld); or

    

    ii. With
respect to a Taking, a condition ("Taking Restored Condition")
such that the restored portion of the Leased Property (1) is fit for use
in Lessee's business, (2) has a value substantially equal to the value of the
Leased Property immediately prior to such Taking, (3) has adequate parking and
adequate access to one or more publicly dedicated streets, and (4) is in
substantially the same condition the Leased Property was in prior to the
occurrence of such Taking.

    

    Restoration Threshold
Amount is defined in paragraph (b) of Article 12.

    

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

    

    SNDA is defined in
paragraph (b) of Article 7.

    

    Specified Activities
is defined in Article 21 hereof.

    

    Specified Amount
means:

    

    (i)           $500,000.00
if, at the applicable time, Lessee has not suffered a Credit Rating Downgrade;
or,

    

    (ii)           $100,000.00
if, at the applicable time, Lessee has suffered a Credit Rating Downgrade.

    

    Successor Note means
one or more non-recourse senior secured note or notes issued by one or more
Institutional Investors to refinance the Note or any note or notes issued to
refinance any successor note or notes to the original Note.

    

    Taking is defined in
paragraph (a) of Article 12.

    

    Taking Restored
Condition is defined in the definition of "Restore" or
"Restoration".

    

    Tax and Insurance Reserve
Fund is defined in paragraph (e) of Article 13.

    

    Tax and Insurance Reserve
Fund Payment is defined in paragraph (e) of Article 13.

    

    Taxes and Impositions
is defined in paragraph (a) of Article 6.

    

    Term means the Basic
Term, plus any Renewal Term or Terms.

    

    Termination Value
means the amount computed in accordance with Schedule
C.

    

    Trade Fixtures is
defined in Article 11.

    

    Warranties means all
warranties, guaranties and indemnities, express or implied, and similar rights
which Lessor may have against any manufacturer, engineer, contractor or builder
in respect of the Leased Property, including, by way of example, any right and
remedy existing under contract or pursuant to the Uniform Commercial
Code.ex1028-10ka2007.htm

    
 

    Exhibit
10.28

    

    
      

    

    

    

    

    

    LOAN
AGREEMENT

    

    

    

    Between

    

    

    

    PUERTO
RICO INDUSTRIAL, TOURIST,

    EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL CONTROL

    FACILITIES
FINANCING AUTHORITY

    

    

    

    PALMAS
COUNTRY CLUB, INC.

    

    

    

    Dated
October 26, 2000

    

    
      

    

    

    

    

    This Loan Agreement has been assigned
to PaineWebber Trust Company of Puerto Rico, as Trustee under a Trust Agreement
dated October 26, 2000, as amended or supplemented from time to time, from
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control
Facilities Financing Authority to such Trustee. A copy of such Trust Agreement
may be inspected at the corporate trust office of the Trustee at American
International Plaza, 9th  Floor,
250 Munoz Rivera Avenue, San Juan, Puerto Rico 00918.

    

    

    LOAN
AGREEMENT

    

    

    LOAN AGREEMENT, dated October 26, 2000, by and among
PUERTO RICO INDUSTRIAL,
TOURIST, EDUCATIONAL, MEDICAL AND ENVIRONMENTAL CONTROL FACILITIES FINANCING
AUTHORITY, a public corporation and governmental instrumentality of the
Commonwealth of Puerto Rico and PALMAS COUNTRY CLUB, INC. , a
corporation organized and existing under the laws of the State of
Delaware.

    

    WITNESSETH:

    

    In consideration of the respective
representations and agreements herein contained, the parties hereto agree as
follows:

    

    ARTICLE
I

    Definitions
and Rules of Construction

    

    Section
1.01.                                 Definitions. Unless otherwise defined
herein, all terms used herein shall have the meanings assigned to such terms in
Section 101 of
the Trust Agreement, dated October 26, 2000, between the Authority and
PaineWebber Trust Company of Puerto Rico, as Trustee, as amended or supplemented
from time to time:

    

    "Act" means Act No. 121 of the
Legislature of Puerto Rico, approved June 27, 1977, as amended, and all future
acts supplemental thereto or amendatory thereof.

    

    "Act of Bankruptcy" means the
filing of a petition commencing a case under the United States Bankruptcy Code
by or against the Borrower or the Authority.

    

    "Administrative Fee" means the
one time fee to the Authority in the amount of one percent (1%) of the principal
amount of the Bonds.

    

    "Affiliate" means a
corporation, partnership, joint venture, association, business trust or similar
entity organized under the laws of the Commonwealth, the United States of
America or any state or territory thereof which: (i) is directly or indirectly
controlled by the Borrower or by any person which directly or indirectly
controls the Borrower; or (ii) controls, directly or indirectly, the Borrower.
For purposes of this definition, "control" means the power to direct the
management and policies of a person through the ownership of not less than a
majority of its voting securities or the right to designate or elect not less
than a majority of the members of its board of directors or other governing
board or body by contract or otherwise,

    

    "Agreement" or "this Agreement" means this
Loan Agreement, including any amendments or supplements hereto as permitted by
the Trust Agreement.

    

    "Authority" means Puerto Rico
Industrial, Tourist, Educational, Medical and Environmental Control Facilities
Financing Authority, a body corporate and politic constituting a public
corporation and governmental instrumentality of the Commonwealth and any
successor thereto.

    

    "Authority Representative"
means each of the persons at the time designated to act on behalf of the
Authority in a written certificate furnished to the Borrower and the Trustee
containing the specimen signature of such person and signed by an authorized
officer of the Authority.

    

    "Board" means the board of
directors of the Authority as constituted from time to time and defined by the
Act, or if said board shall be abolished, then the board, body or officer
succeeding to the principal functions thereof or to whom the powers of the
Authority shall be given by law.

    
      
         

      

      
        
          

        

      

       

    

    "Bond Fund" means the fund
created and so designated by Section 501 of the
Trust Agreement.

    

    "Bonds" means the bonds issued
under Section
208 of the Trust Agreement.

    

    "Borrower" means Palmas
Country Club, Inc., a corporation organized and existing under the laws of the
State of Delaware.

    

    "Borrower Representative"
means each of the persons at the time designated to act on behalf of the
Borrower in a written certificate furnished to the Authority and the Trustee
containing the specimen signature of such person and signed by an authorized
officer of the Borrower.

    

    "Business Day" means any day
of the year other than a Saturday, Sunday or other day in which commercial banks
in the Commonwealth are closed for business to the general public.

    

    "Certificate of Non-Bankruptcy"
means, with respect to any day on which any payment is due and payable on
the Bonds, a certificate required to be delivered to the Trustee, in the form of
Exhibit A hereto, to the effect that as of the date of such certificate, no Act
of Bankruptcy has occurred.

    

    "Closing" means the date on
which this Agreement becomes legally effective, the same being the date on which
the Bonds are initially issued and delivered against payment
therefor.

    

    "Code" means the United States
Internal Revenue Code of 1986, as amended, and the rules and regulations
thereunder.

    

    "Commonwealth" means the
Commonwealth of Puerto Rico.

    

    "Construction Fund" means the
fund created and so designated pursuant to Section 401 of the
Trust Agreement.

    

    "Cost", as applied to the
Project, without intending thereby to limit or restrict any proper definition of
such word under the Act, has the meaning set forth in Section 403 of the
Trust Agreement.

    

    "Eligible Moneys" means: (i)
all amounts drawn by the Trustee under the Letter of Credit, or otherwise
received from the Letter of Credit Issuer, and deposited to the credit of the
Bond Fund or the Debt Service Reserve Fund; (ii) all amounts in respect of
accrued interest, if any, deposited to the credit of the Bond Fund from the
proceeds of the initial sale of the Bonds; (iii) all amounts deposited to the
credit of the Bond Fund from the proceeds of the initial sale of the Bonds and
used by the Trustee to pay interest due on the Bonds for the first three
interest payment dates; (iv) all other amounts on deposit in the Construction
Fund, or the Debt Service Reserve Fund prior to the termination of the Letter of
Credit: (a) to the extent such amounts constitute: (A) proceeds received from
the initial sale of the Bonds deposited with the Trustee contemporaneously with
the issuance and sale of the Bonds (B) investment income generated by the funds
described in (i) through (iii) above or this clause (iv) deposited in the Debt
Service Reserve Fund and the Construction Fund or which have been on deposit
with the Trustee in separate and segregated accounts or sub-accounts in which no
other moneys are held for a period of ninety-four (94) consecutive days prior to
the day on which such moneys are to be used to pay interest on or principal "of
the Bonds, without the occurrence of an intervening Act of Bankruptcy; or (b) as
to which the. Trustee has received an Opinion of Counsel experienced in
bankruptcy matters to the effect that payment to the Bondholders of such moneys
would not constitute a transfer that may be voided under any provision of the
United States Bankruptcy Code in the event of an Act of Bankruptcy; and (v)
after the expiration of the Letter of Credit, the Bonds still being outstanding,
all amounts on deposit in any fund , under this Agreement from whatever
source.

    

    "Eminent Domain" or "Taking" means the taking
pursuant to eminent domain or condemnation proceedings, or by any settlement or
compromise of such proceedings, or any voluntary conveyance of the Project or
any part thereof during the pendency of, or as a result of a threat of, such
proceedings.

    

    "Event of Default" means, with
respect to this Agreement, each of the events set forth in Section
7.01.

    

    "Event of Taxability" means:
(i) the failure by the Borrower to comply with the covenants provided in Section 5.10(a) or
5.10(b); or
(ii) the failure by the Borrower to comply with the representations made in
Section
2.02(g). An Event of Taxability shall be deemed to have occurred if any
of the certificates or reports required to be furnished under Section 5.10(c)
indicate that the Borrower has failed to comply with any of the covenants of
Section
5.1,0(a) or 5.10(b) or the
representations made in Section 2.02(g) and
that, as a result of such failure, interest paid or accrued on the Bonds to a
Qualifying Bondholder is includable in gross income under the Code, as in effect
on the Closing and subject to the payment of income taxes under the Code a
credit for the payment of which is not otherwise available' under the Code as in
effect on the date of such certificates or reports.

    

    "Environmental Claim means any
claim, demand, notice of violation, suit, applicable and binding administrative,
or judicial proceeding, regulatory action, or order involving any Hazardous
Substance, Environmental Law, noise or odor pollution or any injury or threat of
injury to human health or the environment,

    

    "Environmental Law" means any
applicable federal, state, Commonwealth, local law, regulation, applicable and
binding order, decree, opinion or agency requirement relating to: (i) the
handling, use, disposal or release of any Hazardous Substance; or (ii) the
protection of the environment or human health.

    

    "Federal Taxes" means any
income taxes imposed under the Code.

    

    "Hazardous Substance" means
-any
substance that is: (i) listed, classified or regulated pursuant to any
Environmental Law; or (ii) any petroleum product or by-product, asbestos
containing material, polychlorinated byphenyls, radioactive materials or
radon.

    

    "Independent Accountants"
means Arthur Andersen, LLP, or any other firm of certified public
accountants experienced in federal tax matters that is selected by the Borrower
and approved by the Authority and the Initial Letter of Credit Issuer and that
is independent with respect to the Borrower within the meaning of the Code of
Professional Ethics of the American Institute of Certified Public
Accountants.

    

    "Industrial Facilities" shall
have the meaning given to such term by the Act,

    

    "Initial Letter of Credit"
means the irrevocable, transferable letter of credit, issued by the
Initial Letter of Credit Issuer in favor of the Trustee in an aggregate amount
equal to the unpaid principal of the outstanding Bonds plus one hundred
ninety-five (195) days' interest thereon.

    

    "Initial Letter of Credit Issuer"
means Puerto Rico Tourism Development Fund, a body corporate constituting
a governmental instrumentality of the Commonwealth created pursuant to
Resolution Number 6275 of the Board of Directors. of Government Development Bank
for Puerto Rico.

    

    "Initial Reimbursement Agreement"
means the Letter of Credit and Reimbursement Agreement, dated as of the
Date of Issuance, by and between the Borrower and the Initial Letter of Credit
Issuer providing for, among other things, the issuance of the Initial Letter of
Credit.

    

    "Interest Payment Date" means
the 20th day of
each calendar month, commencing November 20, 2000.

    

    "Letter of Credit" means the
Initial Letter of Credit or any Successor Letter of Credit, as the case may
be.

    

    "Letter of Credit Issuer"
means the Initial Letter of Credit Issuer during the term of the Initial
Letter of Credit and thereafter shall mean the issuer of any Successor Letter of
Credit,

    

    "Loan" means the loan of the
proceeds of the Bonds made by the Authority to the Borrower pursuant to Section
4.01.

    

    "Person" means any individual,
corporation, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or a government or any agency or political
subdivision thereof.

    

    "Phase I Environmental Report"
means that certain Environmental Report dated October
____,  2000 prepared in connection with the Project.

    

    "Plans and Specifications"
means, collectively, the plans and specifications prepared by the
Borrower for the Project.

    

    "Project" means the
construction and equipping of an 18 hole championship golf course in Palmas del
Mar known as the Flamboyan Course, a 22,200 square foot golf clubhouse, a 5,600
square foot beach club house and other related facilities, and the refurbishment
of an 18 hole golf course in Palmas del Mar known as the Palm Course, more fully
described in Exhibit B hereto.

    

    "Qualifying Bondholder" means
an owner of Bonds that is: (i) an individual who, during the entire taxable year
in which an Event of Taxability occurred, was a bona fide resident of the
Commonwealth; or (ii) a Commonwealth corporation or other foreign corporation
(for purposes of the Code) that is not engaged in any trade or business in the
United States.

    

    "Reimbursement Agreement"
means the Initial Reimbursement Agreement or the Successor Reimbursement
Agreement at the time in effect, as the case may be.

    

    "Successor Letter of Credit"
means an irrevocable, transferable letter of credit, in form acceptable
to the Trustee, in an amount sufficient (taking into account any adjustment
mechanism contained therein) to cover the full principal amount of the
outstanding Bonds on the effective date of such letter of credit and from time
to time at any time thereafter plus not less than one hundred ninety five (195)
days' interest thereon.

    

    "Successor Reimbursement Agreement"
means an agreement between the Borrower and the Successor Letter of
Credit Issuer, providing for, among other things, the issuance of the Successor
Letter of Credit.

    

    "Trust Agreement". means the Deed of Trust
Agreement, dated the Date of Issuance, by and between the Authority and the
Trustee, as the same may be amended or supplemented in accordance with the terms
thereof.

    

    "Trustee" means the Trustee at
the time serving as such under the Trust Agreement, whether the original or
successor trustee.

    

    Section
1.02.                                  Rules of
Construction. (a) Words of the
masculine gender shall be deemed and construed to include correlative words of
the feminine and neuter genders.

    

    (b) Unless the context shall
otherwise indicate, the words "Bond," "Bondholder," "owner," "Holder" and
"Person" shall include the plural as well as the singular number, and "Holder"
and "Bondholder" when used herein with respect to the Bonds shall mean the
holder or registered owner, as the case may be, of the Bonds at the time issued
and outstanding.

    

    (c)           Words
importing the redemption or calling for redemption of the Bonds shall not be
deemed to refer to or connote the payment of the Bonds at their stated
maturity.

    

     (d) The captions or headings in
this Agreement are for convenience of reference only and in no way define, limit
or describe the scope or intent of any provisions or sections of this
Agreement.

    

    (e) All references herein to
particular articles, sections or exhibits are references to articles, sections
or exhibits of this Agreement unless some other reference is
established.

    

    (f) Except as provided in Section 8.03, any
inconsistency between the provisions of this Agreement and the provisions of the
Trust Agreement shall be resolved in favor of the provisions of the Trust
Agreement.

    

    ARTICLE
II

    Representations

    

    Section
2.01.                                 Representations
by the Authority. The Authority represents
that:

    

    (a) The Authority was duly created
and is validly existing under the laws of the Commonwealth as a body corporate
and politic constituting a public corporation and governmental instrumentality
of the Commonwealth.

    

    (b) Under the provisions of the Act,
the Authority is duly authorized to enter into and to execute and deliver this
Agreement, the Security Agreements to which it is a party and the Trust
Agreement, to undertake the transactions contemplated by this Agreement, the
Security Agreements to which it is a party and the Trust Agreement, and to carry
out its obligations hereunder and thereunder.

    

    (c) By duly adopted resolution, the
Authority has duly authorized the execution and delivery of this Agreement, the
Trust Agreement and the Security Agreements to which it is a party and the
issuance, sale, execution and delivery of the Bonds.

    

     (d) Under existing law all
payments received by the Authority pursuant to this Agreement are exempt from
Commonwealth income taxation, duties, assessments and governmental
charges.

    

    Section
2.02.                                 Representations,
Warranties and Covenants of the Borrower. The Borrower represents,
warrants and covenants that:

    

    (a)            It
is a constituted and validly existing corporation under the laws of the State of
Delaware and duly authorized to do business in the Commonwealth,

    

    (b)            It
has the power and authority to enter into and perform its obligations under this
Agreement and the Security Agreements to which it is a party.

    

    (c)            It
has the necessary power and authority to develop, construct and operate the
Project, and to conduct its operations as presently conducted or proposed to be
conducted.

    

    (d)            It
has duly authorized the execution, delivery and performance of this Agreement
and the Security Agreements to which it is a party.

    

    (e) The execution and delivery by it
of this Agreement and the Security Agreements to which it is a party, and the
consummation of the transactions contemplated hereby and thereby and the
fulfillment of or compliance with the terms and conditions hereof and thereof do
not and will not conflict with the provisions of its organizational documents,
and do not and will not conflict with, or constitute on its part a breach of or
default under any indenture, deed of trust, mortgage, agreement or other
instrument to which it is a party or by which it or any of its property is bound
or conflict with, violate or result in a breach of any existing law, public
administrative rule or regulation, judgment, court order or consent decree to
which it or any of its property is now a party or is bound, or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of its property or assets under the terms of any instrument
or agreement other than this Agreement, the Trust Agreement or the Security
Agreements to

    

    (f)            It
will cause the Project to be operated as Industrial Facilities within the
meaning of the Act.

    

    (g)            (i)
During each of its taxable years while interest on the Bonds is paid or payable,
it will be engaged in trade or business only in Puerto Rico; (ii) for the
three-year period ending with the close of its taxable year immediately
preceding the payment of interest on the Bonds (or for such part of such period
as may be applicable), at least 80% of its gross income will be derived from
sources outside the United States and attributable to the active conduct of a
trade or business in Puerto Rico, such determination to be made under Section
861(c)(1)(B) of the Code, as in effect on the Closing; and (iii) interest on the
Bonds will not be treated as paid by' a trade or business conducted by it
outside the Commonwealth, such determination to be made under Section
884(f)(l)(A) of the Code, as in effect on the Closing.

    

    (h)            All
consents, approvals, licenses and permits of any governmental authority having
jurisdiction, or of any other person, required for the development, construction
and operation of the Project are, and shall remain, in full force and effect,
except for such licenses and permits which are not required to be in effect
prior to the commencement of the operations at the Project, all of which the
Borrower shall promptly and diligently pursue at the time required.

    

    (i)            Except
as may be set forth in the Phase I Environmental Report, to the best of its
knowledge, the Project, or the real estate subject to the Mortgage, is not in
violation of any applicable Environmental Law. It has not received any
Environmental Claims or is aware of any threatened Environmental Claims in
connection with the Project or such real estate.

    

    ARTICLE
III

    Construction
of the Project

    

    Section
3.01.                        Construction
of Project, The Borrower has caused
or will cause the Project to be constructed and equipped substantially in
accordance with the Plans and Specifications.

    

    Section
3.02.                        Disbursements from Construction Fund, The Authority and the
Borrower hereby agree that the moneys in the Construction Fund shall be applied
to the payment of the Cost of the Project and otherwise as provided in
accordance with Article IV of the Trust Agreement and substantially to the
extent of the estimates of the Cost of the Project set forth in the application
filed with the Authority or otherwise approved by the Authority, and such moneys
shall be invested and reinvested in accordance with Article VI of the Trust
Agreement.

    

    Section
3.03.                         Establishment
of Completion Date. The Completion Date for
the construction of the Project shall be evidenced to the Trustee by a
certificate delivered to the Trustee and signed by the Borrower Representative
setting forth the Cost of the Project and stating that, except for amounts not
then due and payable or the liability for the payment of which is being
contested or disputed by the Borrower, the construction of the Project has been
completed in accordance with the description thereof and the Plans and
Specifications therefor and the Cost of the Project has been paid. Such
certificate shall state that it is given without prejudice to any rights against
third parties which exist at the date .of such certificate or which may
subsequently come into being.

    

    Section
3.04.                        Revision
of Plans and Specifications. The Borrower may cause.
the Plans and Specifications and the scope of the Project to be revised from
time to time; provided, however, no such revision shall be inconsistent with the
representation made in subsection (f) of Section 2.02, and in
the case of any change that would render materially inaccurate the description
of the Project in Exhibit B, there shall be delivered to the Trustee, the Letter
of Credit Issuer and the Authority: (i) a revised description of the Project as
altered by the change in the Plans and Specifications, the accuracy of which
shall have been certified by the Borrower Representative; and (ii) the approvals
and consents, if any, required by the Act, the Trust Agreement and the
Reimbursement Agreement.

    

    Section
3.05.                                 Borrower
Required to Pay
Cost of
Project. If
the moneys in the Construction Fund available for the payment of the Cost of the
Project should not be sufficient to pay or cause to be paid the Cost of the
Project, the Borrower agrees to cause the Project to be completed and to pay
that portion of the Cost of the Project as may be in excess of the moneys
available therefor in the Construction Fund. The Authority does not make any
warranty, either express or implied, that the moneys which will be paid into the
Construction Fund, together with any other available moneys of the Borrower,
will be sufficient to pay the Cost of the Project. The Borrower agrees that if,
after exhaustion of the moneys in the Construction Fund, the Borrower should pay
or cause to be paid any portion of the Cost of the Project, the Borrower shall
not be entitled to any reimbursement therefor from the Authority or from the
Trustee, and that they shall not be entitled to any abatement, diminution or
postponement of the payments to be made pursuant to Article IV of this
Agreement.

    

    Section
3.06.                                 Certificate of
Independent Accountants; Same Fiscal Year. The Borrower shall furnish to
the Authority and the Trustee, within one hundred twenty (120) days after the
end of the Borrower's fiscal year during which the Completion Date occurs, a
written statement prepared by a firm of Independent Accountants, based upon a
review of the Borrower's financial recorcis verifying the Cost of the Project
and that all Bond proceeds were used by the Borrower to pay the Cost of the
Project. The Borrower agrees to maintain the same fiscal year for accounting and
tax purposes until the Payment of the Bonds.

    

    ARTICLE
IV

    Loan
by the Authority to the Borrower;

    Repayment;
Maintenance of Project; Indemnity

    

    Section
4.01.                                 Issuance of the
Bonds to Fund the Loan; Making of the Loan; Repayment. Simultaneously with the
execution and delivery of this Agreement, the Authority shall issue and deliver
the Bonds to the Underwriters to provide the Authority with funds to be loaned
to the Borrower pursuant to this Agreement. The Bonds shall be issued in
accordance with the Trust Agreement. The approval of the terms of the Bonds and
the Trust Agreement by the Borrower shall be conclusively established by their
execution of this Agreement. Upon the terms and conditions of this Agreement,
the Authority shall loan to the Borrower the proceeds of the Bonds. The Loan
shall be deemed to have been made when the proceeds of the sale of the Bonds are
delivered to the Trustee. The proceeds for the Loan shall be used by the
Borrower, together with other available funds to: (i) pay a portion of the Cost
of the Project; (ii) repay certain indebtedness previously incurred in
connection with the Project; (iii) make a deposit to a debt service reserve fund
for the Bonds; (iv) make a"deposit to a working capital reserve fund required by
the Initial Letter of Credit Issuer; and (v) the payment of other costs,
expenses and fees incurred in connection with the issuance of the Bonds. The
principal amount of the Loan shall be equal to the aggregate principal amount of
the Bonds.

    

    The Borrower agrees to repay the Loan
in accordance with the provisions of this Agreement. The Borrower acknowledges
that the proceeds of the Loan will be delivered to the Trustee and applied on
behalf of the Borrower in accordance with this Agreement and the Trust
Agreement.

    

    With respect to each date on which
the principal amount of, redemption premium, if any, or the interest on the
Bonds is payable (whether at maturity, upon acceleration, redemption or
otherwise), the Borrower will pay such additional amounts which, together with
all other moneys available therefor in the Bond Fund will be sufficient to
pay:

    

    (a)           all
interest which will become due and payable on the Bonds on such
date;

    

    (b)           the
principal amount of the Bonds and redemption premium, if any, which will become
due and payable on such date; and

    

    (c)           amounts,
if any, required to effect redemption or purchase of the Bonds on the dates
specified pursuant to Section 301 of the Trust Agreement.

    

    The Borrower will pay the amounts it
is required to pay under clauses (a), (b) and (c) above directly to the Trustee
in immediately available funds for deposit in the Bond Fund. The Borrower shall
deposit or cause to be deposited such amounts with the Trustee no later than
10:00 a.m. (Atlantic Standard time) on the 94th day
immediately preceding the date on which the corresponding amounts are due on the
Bonds, except as provided in Sections 8.01 and
8.02.

    

    All payments required to be made by
the Borrower under the terms of this Loan Agreement shall be made in lawful
money of the United States of America.

    

    In addition, the Borrower agrees to
deposit with the Trustee for the credit of the Debt Service Reserve Fund amounts
sufficient to cover the required Debt Service Reserve Fund Requirement or to
eliminate any. Debt Service Reserve Deposit Deficiency within one (1) Business
Day from the date that such deficiency arises, except that if such deficiency
arises solely as a result of a decline in the market value of the investments
held to the credit of the accounts in the Debt Service Reserve Fund, such
deposit by the Borrower shall be made within three (3) Business Days after
receipt of notice of such deficiency from the Trustee.

    

    To secure its obligation to make the
payments required under this Section 4.01, the
Borrower agrees to cause the Initial Letter of Credit to be issued and delivered
by the Initial Letter of Credit Issuer to the Trustee on or prior to the Date of
Issuance. The Initial Letter of Credit shall be in the amount provided in the
definition thereof in Section 1.01 and
shall in no event cover any premium on the Bonds. For purposes of this Section 4.01 all
drawings by the Trustee under the Letter of Credit to the extent made and
applied to the payment of the principal amount of and interest on the Bonds,
will be deemed to satisfy the corresponding obligation of the Borrower under
this Section
4.01.

    

    To additionally secure the obligation
of the Borrower to make payments required under this Section 4.01, the
Borrower shall execute and deliver the Security Agreements on or prior to the
date of delivery and payment for the Bonds.

    

    Except as provided in Section 906 of
the Trust Agreement, the Trustee shall not use any of the amounts deposited in
the Bond Fund or the Debt Service Reserve Fund pursuant to this Section for any
purpose other than the payment of the principal amount of and redemption
premium, if any, and interest on the Bonds payable on the date with respect to
which such amounts were deposited, or to reimburse the Initial Letter of Credit
Issuer for any drawings under the Letter of Credit.

    

    Section
4.02.                                 No
Set-Off. The
obligation of the Borrower to make the payments required by Section 4.01 and all
other payments required under this Agreement and to perform and observe the
other agreements contained in this Agreement shall be absolute and
unconditional. The Borrower shall pay without abatement, diminution or deduction
(whether for taxes or otherwise) all such amounts regardless of any cause or
circumstance whatsoever including, without limitation, any defense, set-off,
recoupment or counterclaim which the Borrower may have or assert against the
Authority, the Trustee, the Letter of Credit Issuer,, any holder of a Bond or
any other person.

    

    Section
4.03.                                 Covenant
to Maintain the Project. The Borrower will cause
the Project to be operated at all times as an Industrial Facility, and will, at
all times, at its sole cost and expense, maintain, preserve and keep the Project
in good repair, working order and condition and cause to be made, from time to
time, all needed and proper repairs, replacements and renewals; provided,
however, that the Borrower will have no obligation to cause to be maintained,
preserved, repaired, replaced or renewed any element or unit of the Project, the
maintenance, repair, replacement or renewal of which becomes uneconomic to the
Borrower because of damage or destruction or obsolescence or change in economic
or business conditions, or change in government standards or regulations. The
Borrower covenants that it will not permit, commit or suffer any waste of the
whole or any major part of the Project and shall not use or permit the use of
the Project, or any part thereof, for any unlawful purpose or permit any
nuisance to exist thereon.

    

    The Borrower covenants that it will
promptly notify the Trustee and the Authority if the Project ceases to be
operated as an Industrial Facility within the meaning of the Act as in effect on
the date hereof.

    

    Section
4.04.                                 Expenses. The Borrower shall pay,
when due and payable, certain costs and expenses (without duplication),
exclusive of costs and expenses payable from the proceeds of the Bonds, as
follows:

    

    (a)          the
fees and other costs payable to the Trustee, including the reasonable
compensation and the reasonable expenses and disbursements of Trustee's counsel
and the reasonable costs and expenses of indemnifying the Trustee for, and
holding the Trustee harmless against, any loss, liability or expense (including
the reasonable costs and Trustee expenses of defending against any claim of
liability) incurred without negligence or willful misconduct by the Trustee and.
arising out of or in connection with its acting as Trustee under the Trust
Agreement;

    

    (b)            all
costs incurred by the Authority or the Trustee in connection with the purchase
or redemption of Bonds to the extent money is not otherwise available
therefor;

    

    (c)            
the fees and other costs incurred for services of such attorneys, management
consultants and accountants as are employed by the Authority or the Trustee to
make examinations, provide services, render opinions or prepare reports required
under this Agreement or the Trust Agreement;

    

    (d)            easonable
fees and other costs that the Borrower is obligated to pay, not otherwise paid
under this Agreement or the Trust Agreement, incurred by the Authority in
connection with its administration and enforcement of., and
compliance with, this Agreement or the Trust Agreement, including, but not
limited to, the Administrative Fee; and

    

    (e)            reasonable
fees and other costs incurred at the request or with the consent of the Borrower
in connection with the issuance of the Bonds to the extent such. fees, and other
costs are not paid from the proceeds of the Bonds; provided, however, that in no
event shall the total amount of such fees and other costs paid from the proceeds
of the Bonds exceed two percent (2%) of the proceeds of the Bonds, less amounts
paid to the Underwriters and underwriters' discount, but excluding the
Administrative Fee, fees and. expenses payable to the Initial Letter of Credit
Issuer on the Date of Issuance and the internal revenue stamps and recordation
fees payable in connection with the Security Agreements and the title insurance
premium.

    

    Section
4.05.                                 Indemnification.

    

    (a)            The
Borrower shall at all times indemnify and hold harmless the Authority and the
Trustee against any and all losses, costs, damages, expenses and liabilities
(individually, a "Loss" and collectively, the "Losses") of whatsoever nature
(including but, not limited to reasonable attorneys' fees, litigation and court
costs, amounts paid in settlement, and amounts paid to discharge judgments)
directly or indirectly resulting from, arising out of, or related to one or more
Claims, as hereinafter defined. The word "Claims" as used herein shall mean all
claims, lawsuits, causes of action and otherr legal actions and proceedings of
whatsoever nature, including those related to bodily or personal injury or death
of any person or damage to any property (including but not limited to persons
employed by the Authority, the Borrower or any other person) brought against the
Authority or to which the Authority is a party, that directly or indirectly
result from, arise out of, or relate to: (i) the design, construction, transfer,
sale, operation, use, occupancy, maintenance or ownership of the Project or any
part thereof; (ii) the execution, delivery or performance of this Agreement, the
Trust Agreement, the Security Agreements, or any related instruments or
documents; or (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Official Statement relating to the Bonds, or any
amendment or supplement thereto, or any Preliminary Official Statement relating
to the Bonds, or arising out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading; provided, however, that the Borrower will
not be liable in any such case to the extent that any such Loss or Claim arises
out of or is based upon. an untrue
statement or alleged untrue statement or omission or alleged omission made in
any of such documents in reliance upon and in conformity with written
information furnished to the Borrower by the Authority specifically for use
therein (it being understood that the information in said Official Statement
under the captions "The Authority and Governing Board" and "Government
Development Bank for Puerto Rico" is the only information that has been so
furnished to the Borrower by the Authority specifically for use
therein).

    

    (b)            The
Borrower hereby agrees to indemnify and hold harmless the Authority and the
Trustee from and against all reasonable losses, costs, damages, Environmental
Claims, expenses (including reasonable attorneys' and consultants' fees),
liabilities, fines, enforcement actions, remedial costs, and third party cost
recovery actions that the Authority and the Trustee may sustain by reason of the
Trustee or the Authority becoming liable as an operator (and/or as an owner if,
in its function as a lender, the Trustee or the Authority is deemed to be an
owner) under any applicable Environmental Law or related to the presence in,
under or at the Project of any Hazardous Substance or related to the Borrower's
failure to comply with any applicable Environmental Law.

    

    (c)            The
obligations of the Borrower under this Section 4.05 shall
apply to all Losses or Claims, or both, that result from, arise out of, or are
related to any event, occurrence, condition or relationship existing prior to
termination of this Agreement, whether such Losses or Claims, or both, are
asserted prior to termination of this Agreement or thereafter. The Authority or
the Trustee, as applicable, shall reimburse the Borrower for payments made by
the Borrower pursuant to this Section 4.05 to the
extent of any proceeds, net of all expenses of collection, actually received by
the Authority or the Trustee from any insurance covering such Claims with
respect to the Losses sustained. The Authority and the Trustee shall assign
their rights to such proceeds, to the extent of such required reimbursement, to
the Borrower. In case any action shall be brought against the Authority or the
Trustee in respect of which indemnity may be sought against the Borrower, the
Authority or the Trustee, as applicable, shall promptly notify the Borrower in
writing and the Borrower shall have the right to assume the investigation and
defense thereof including the employment of counsel and the payment of all
expenses. The Authority and the Trustee shall have the right to employ separate
counsel in any such action and participate in the investigation and defense
thereof, but the fees and expenses of such counsel shall be paid by the
Authority and the Trustee unless the employment of such counsel has been
authorized by the Borrower. The Borrower shall not be liable for any settlement
of any such action without its written consent but, if any such action is
settled with the written consent of the Borrower or if there be a final
unappealable judgment for the plaintiff in any such action, the Borrower agrees
to indemnify and hold harmless the Authority and the Trustee from and against
any such Losses or Claims by reason of such settlement or judgment. Nothing
herein shall be construed as requiring the Authority or the Trustee to acquire
or maintain insurance of any form or nature with respect to the Project or any
portion thereof or with respect to any phrase, term, provision, condition or
obligation of this Agreement or any other matter in connection herewith so long
as this Agreement is in effect.

    

    (d)            The
provisions of this Section 4.05 shall survive
the expiration or termination of this Agreement.

    

    Section
4.06.                                 Past Due
Payments. In
the event the Borrower shall fail to pay any amounts required to be paid under
Section 4.01 or
any other amounts payable under this Agreement, any such amounts shall continue
to bear interest until their payment from the maturity date, redemption date or
interest payment date to which such defaulted amounts relate at the then current
rate of interest on such Bonds. .

    

    Section
4.07.                                 Payment
of Costs upon Default. The Borrower shall pay,
and shall indemnify the Authority and the Trustee against, all costs and
charges, including reasonable attorney fees, lawfully and reasonably incurred in
enforcing any covenant or agreement of the Borrower contained in this Agreement.
The Borrower shall reimburse the Authority and the Trustee for any funds
advanced by the Authority or the Trustee for the performance of any of its
duties hereunder or under the Trust Agreement, or in the exercise of any of its
rights or powers and shall pay interest on any funds so advanced at a rate equal
to the Prime Rate announced from time to time by Citibank N.A., plus
2%.

    

    ARTICLE
V

    Further
Agreements

    

    Section
5.01.                                 Covenant
to Maintain Existence. The Borrower covenants
that so long as any Bonds are outstanding it will maintain its existence, will
not dispose of all or substantially all its assets, and. will not acquire,
consolidate with or merge into another person; provided, however, that the
Borrower may acquire, consolidate with or merge into another Person, or transfer
to another person all or substantially all its assets and,thereafter dissolve,
if: (i) the Initial Letter of Credit Issuer gives its prior consent in writing
to the extent such consent is required under the Reimbursement Agreement; (ii)
the successor or transferee is solvent and irrevocably and unconditionally
assumes in writing all the obligations of said Borrower herein; (iii) such
consolidation, merger or transfer shall not cause an Event of Taxability; and
(iv) immediately after such consolidation, merger or transfer neither said
Borrower nor such successor or transferee shall be in default in the performance
or observance of any duties, obligations or covenants under this
Agreement.

    

    Section
5.02.                                 No
Warranty by Authority. The Authority makes no
warranty, either express or implied, as to the condition of the Project or its
suitability for the Borrower's purposes or needs or that the proceeds of the
Bonds will be sufficient for the purposes set forth above.

    

    Section
5.03.                                 Maintenance
and Examination of Books and Records of Borrower; Right of
Inspection. The Borrower covenants
that it will keep accurate records, books and accounts of all items of cost and
of all expenditures relating to the Project, whether or not financed under the
provisions of this Agreement. The Authority and the Trustee through their
respective officers, employees, consultants and other duly authorized
representatives, shall have the right, upon reasonable prior written notice
during normal business hours and without unduly interfering with Borrower's
normal operation to: (i) enter upon and examine and inspect the Project, to
determine whether the Project continues to constitute Industrial Facilities;
(ii) examine the Plans and Specifications and the other books and records of the
Borrower, including any accountants' work papers, with respect to the Project in
connection with the transactions contemplated by this Agreement and the Trust
Agreement; and (iii) to make copies of those portions of such books and records
as the Authority and the Trustee or such agents shall reasonably
request.

    

    Section
5.04.                        Officers
of Authority Not Liable. All covenants,
stipulations, promises, agreements and obligations of the Authority contained
herein shall be deemed to be covenants, stipulations, promises, agreements and
obligations of the Authority and not of any member of the Board of the Authority
or any officer, agent, servant or employee of the Authority in his or her
individual capacity, and no recourse shall be had for the payment of the
principal amount of or redemption premium or interest on the Bonds or for any
claim based thereon or hereunder against any member of the Board of the
Authority or any officer, agent, servant or employee of the Authority or any
natural person executing the Bonds. Neither any member of the Board of the
Authority nor any person executing the Bonds shall be liable personally on the
Bonds or be subject to any personal liability or accountability by reason of the
issuance of the Bonds.

    

    Section
5.05.                        Compliance
with Applicable Law. The Borrower covenants
that the Plans and Specifications shall comply with all provisions of applicable
laws, ordinances, orders, rules, regulations and requirements of all federal,
Commonwealth and municipal governments, and appropriate departments,
commissions, boards and officers thereof, whether now or hereafter in
force.

    

    Section
5.06.                        Authority's
Performance of the Borrower's Obligations. In the event the
Borrower at any time shall neglect, refuse or fail to perform any its
obligations under this Agreement, the Authority or the Trustee, at their
respective options and following at least thirty (30) days' written notice to
the Borrower (except where a shorter period of notice is necessary to avoid a
default in the Bonds or to,avoid endangering the interest of the Authority or
the Trustee in the Project, or any part thereof, or to prevent any loss or
forfeiture thereof), may perform or cause to be performed such obligations, and
all reasonable expenditures incurred by the Authority or the Trustee thereby
shall be promptly paid or reimbursed by the Borrower to the Authority or the
Trustee, as the case may be.

    

    Section
5.07.                        Indemnification
with Respect to Government' Obligations. If the Borrower shall
elect to cause Government Obligations to be deposited with the Trustee pursuant
to Section 1301
of the Trust Agreement, the Borrower shall pay and shall indemnify and hold
harmless the Trustee, the Authority and each holder of the Bonds against any
tax, fee or other charge imposed upon or assessed against such Government
Obligations or the principal thereof, or premium, if any, and interest received
thereon.

    

    Section
5.08.                        Annual
Reports. Within one hundred
twenty (120) days following the completion of its fiscal year, the Borrower
shall furnish a copy of its year-end audited financial statements to the Trustee
and the Authority, together with a certificate signed by the chief financial
officer (or other executive officer performing similar functions) of the
Borrower certifying that no default has occurred under this Agreement, and that
to the best of his knowledge no fact or circumstance exists which, with the
lapse of time or the giving of notice or both, would result in an Event of
Default hereunder,

    

    Section
5.09.                        Covenant
by the Borrower as to Compliance with Trust Agreement. The Borrower approves
all the terms of the Trust Agreement and consents to the assignment made by the
Authority to the Trustee therein, and covenants and agrees that it will comply
with the provisions of the Trust Agreement with respect to the Borrower and
recognizes that the Trustee shall have the power and authority provided in the
Trust Agreement. The Borrower further agrees to cooperate with the Authority,
the Trustee and the Initial Letter of Credit Issuer in providing any information
or documentation that is necessary or convenient for the rendering of any legal
opinion that may be required under the Trust Agreement.

    

    Section
5.10.                        Covenant as to Source of
Income.

    

    (a)           The
Borrower covenants that: (i) during each taxable year of the Borrower while
interest on the Bonds is paid or payable it will be engaged in trade or business
only in the Commonwealth; (ii) for the three-year period ending with the close
of its taxable year immediately preceding the payment of interest on the Bonds
(or for such part of such period as may be applicable), at least 80% of its
gross income will be derived from sources outside the United States as
determined by Subchapter N of the Code, and attributable to the active conduct
of a trade or business within the Commonwealth, such determination to be made
under Section 861(c)(1)(B) of the Code as in effect on the Closing; and (iii)
interest on the Bonds will be treated as paid by a trade or business conducted
by said Borrower within the Commonwealth, such determination to be made under
Section 884(f)(1)(A) of the Code and the regulations thereunder as in effect on
the Closing,

    

    (b)            The
Borrower covenants that it will conduct its business so that at all times all
interest paid or payable on the Bonds will constitute income from sources within
the Commonwealth under the general sourcing rules of the Code as in effect on
the Closing.

    

    (c)            The
Borrower covenants that for each taxable year, up to and including the taxable
year when all interest on and principal of the Bonds are paid in full, not later
than the one hundred twentieth (120th) day
following the close of each such taxable year, beginning with the first taxable
year ending after the Closing, it will: (1) deliver to the Trustee, the Letter
of Credit Issuer, the Independent Accountants and the Authority, a certificate
(the "Borrower's Certificate") addressed to the Trustee, the Letter of Credit
Issuer, the Independent Accountants and the Authority: (i) stating for -such
taxable year, the percentage of the Borrower's gross income that was derived
from sources outside the Commonwealth under the general sourcing rules of the
Code as in effect on the Closing; (ii) stating the percentage of its gross
income that was, or was treated as, effectively connected with, or attributable
to, the active conduct of: (A) its trade or business in the Commonwealth; and
(B) any trade or business outside the Commonwealth, in each case under the
general sourcing rules of the Code as in effect on the Closing; and (iii) making
an assertion as to whether or not the Borrower has complied with each of the
covenants of Section
5.10(a) and 5.10(b) and the
representations of Section 2.02(g) and,
accordingly, whether or not an Event of Taxability has occurred; and (2) cause
the Independent Accountants to deliver to the Trustee, the Letter of Credit
Issuer and the Authority, an Independent Accountants' Report stating: (i) that
they have examined (such examination being made in accordance with standards
established by the American Institute of Certified Public Accountants)
management's assertion included in the Borrower's Certificate as to said
Borrower's compliance with the covenants of Section 5.10(a) and
5.10(b) and the
representations of Section 2,02(g); and
(ii) whether in their opinion said Borrower's assertion as to compliance with
each of such covenants and representation is correct, If the Borrower's
Certificate or the Independent Accountants' Report indicate that a Borrower has
failed to comply with any of the covenants of Sections 5.10(a) and
5.10(b) or the
representations made in Section 2.02(g), and
that, as a result of such failure interest paid or accrued on the Bonds to a
Qualifying Bondholder is includable in gross income under the Code as in effect
on the Closing and subject to the payment of income taxes under the Code, a
credit for the payment of which is not otherwise available under the Code as in
effect on the date of the Borrower's Certificate or Independent Accountants'
Report, an Event of Taxability shall be deemed to have occurred, The Trustee
shall send a copy of such certificate or report together with a written notice
to each Bondholder (and to any person who was a Bondholder during the preceding
taxable year of the Borrower) stating that an Event of Taxability has occurred
within five (5) Business Days of the receipt of such certificate or
report.

    

    Section
5.11.                                 No
Purchase of Bonds by Borrower. Except as permitted by
the Trust Agreement with respect to the purchase of Bonds for cancellation, the
Borrower covenants that none of the Bonds will be purchased by the Borrower, any
shareholder of the Borrower or its Affiliates.

    

    Section
5.12.                                 No
Interest of Authority in Project. The Authority shall not
have any rights to or interest in the Project, which shall be the sole and
exclusive property of the Borrower.

    

    Section
5.13.                                 Consent
to Jurisdiction. The Borrower consents to
the jurisdiction of the courts of the Commonwealth for causes of action arising
under or related to the terms of this Agreement, the Trust Agreement or any
related documents. If necessary, the Borrower agrees to appoint and maintain an
agent in the Commonwealth to receive service of process for this limited
purpose.

    

    Section
5.14.                                 Environmental
Covenants. The Borrower shall: (i)
use its commercially reasonable best efforts to ensure that the Project complies
with all applicable Environmental Laws; (ii) notify the Trustee within ten (10)
Business Days of receiving written notice of an Environmental Claim relating to
the Project; and (iii) "provide copies of all relevant and available
correspondence and documents within ten (10) Business Days of receiving such
notice.

    

    Section
5.15.                                 Rating on
the Bonds. The Borrower agrees to
request S&P to rate the Bonds continuously until the Payment of the Bonds,
to pay the fees and expenses of S&P in connection with such rating, and
deliver to S&P upon its request such documents and other information as
S&P shall reasonably require in connection with its continuing monitoring of
the rating of the Bonds.

    

    Section
5.16.                                 Certificate
of Non-Bankruptcy. The Borrower agrees to
deliver to the Trustee a duly executed Certificate of Non-Bankruptcy not later
than 10:00 a.m. (Atlantic Standard time) on the second Business Day prior to
each day where a payment is due on the Bonds.

    

    Section
5.17.                                 Further
Assurances. The Borrower will
execute, acknowledge where appropriate, and deliver, and use its best efforts to
cause-others to
execute, acknowledge where appropriate, and deliver, from time to time promptly
at the request of the Trustee, all such instruments and documents as in the
reasonable opinion of the Trustee are necessary or advisable to execute and file
of record, or use its best efforts to cause others to execute and file of
record, any financing statements, continuation statements or other documents,
and take such other action as may be reasonably necessary or advisable to
create, perfect, protect and preserve the liens of the Security
Agreements.

    

    Section
5.18.                                 Continuing
Disclosure. The Borrower hereby
covenants and agrees that it will comply with and carry out all of the
provisions of the Continuing Disclosure Agreement executed and delivered by the
Borrower on the date hereof (the "Continuing Disclosure Agreement").
Notwithstanding any other provision of this Agreement, failure by the Borrower
to comply with the provisions of the Continuing Disclosure Agreement shall not
be considered an Event of Default under Section
7.01.

    

    ARTICLE
VI

    Assignments

    

    Section
6.01.                                 Assignment
by Borrower. Without the necessity of
obtaining the consent of the Authority or the Trustee, the Project may be sold,
leased or otherwise transferred or encumbered as a whole or in part and any
proceeds thereof retained by the Borrower, or this Agreement may be assigned in
whole or in part, subject, however, in either case: (i) to the consent of the
Letter of Credit Issuer (which consent may be given or withheld in accordance
with the terms of the Reimbursement Agreement); and (ii) to the following
conditions:

    

    (a)            prior
to the proposed sale, lease or other transfer of the Project, as a whole or
substantially as a whole, the Trustee, the Authority and the Letter of Credit
Issuer are provided with proof satisfactory to them by the Borrower (which may.
include an opinion from counsel knowledgeable in Federal and Commonwealth tax
matters approved by the Trustee) that, as a result of such transfer or
assignment or the terms thereof, interest payable on the Bonds will continue to
constitute Puerto Rico source income under the Code as in effect on the date of
issuance of the Bonds; and

    

    (b)            the
Borrower shall, within ten (10) days after such sale, lease, transfer or
encumbrance of the Project, or such assignment of this Agreement, notify the
Authority, the Trustee and the Letter of Credit Issuer thereof.

    

    
      	
               
      

            	
              Any
      authorized assignment of this Agreement is subject to the following
      additional conditions:

            

    

    

    (A) the assignee shall, in a
certificate delivered to the Authority, the Trustee and the Letter of Credit
Issuer, which certificate shall be in a form reasonably satisfactory to the
Authority, the Trustee and the Letter of Credit Issuer, expressly assume, and
agree to pay and to perform, all of the obligations of the Borrower under this
Agreement which shall have been assigned to it; and

    

    (B) the assignee shall deliver to the
Authority, the Trustee and the Letter of Credit Issuer, a certificate executed
by its chief financial officer (or other executive officer performing similar
functions) stating that none of the obligations, covenants and performances
under this Agreement and the Reimbursement Agreement assumed by it will conflict
with or constitute on the part of such assignee a breach of, or default under,
any indenture, mortgage, agreement or other instrument to which such assignee is
a party or by which it is bound, or under any existing law, rule, regulation,
judgment, order or decree to which such assignee is subject.

    

    The provisions of subsections (A) and
(B) of this Section
6.01 (c) shall not apply to any sale, lease, transfer or encumbrance of
any portion of the Project, or assignment of this Agreement, in which all the
parties consist of the Borrower and any Affiliate.

    

    No sale, lease or other transfer or
encumbrance of the Project or assignment of this Agreement shall: (i) relieve
the Borrower of the obligation to make the payments required by Section 4.01 unless
the Borrower obtains the prior written consent of the Authority and the Letter
of Credit Issuer; (ii) relieve the Letter of Credit Issuer from its obligations
under the Letter of Credit; (iii) affect in any way the validity or
enforceability of the Letter of Credit; or (iv) affect in any way the validity
or enforceability of any of the Security Agreements.

    

    Section
6.02.                                 Assignment
by Authority. By the provisions of the
Trust Agreement, the Authority will assign its rights under and interest in this
Agreement (except its rights to receive notices, reports and other statements
given both to the Authority and the Trustee, its rights under Sections 4.04, 4.05, 4.07,
5.07, 7.02 and 7.04 to payment of certain costs and expenses and to
indemnification, and its right to individual and corporate exemption from
liability under Sections 5.04, 9.14 and 9.15 and the Security
Agreements and will pledge and assign any payments, receipts and revenues
receivable by it (except as aforesaid) under or pursuant to this Agreement and
the Security Agreements and income earned by the investment of funds held under
the Trust Agreement, to the Trustee as security for the payment of the principal
of and premium, if any, and interest on the Bonds. Except as provided in this
Section. 6.02,
the Authority will not sell, assign, transfer, convey or otherwise dispose of
its interest in this Agreement or the payments. receipts and revenues of the
Authority derived hereunder.

    

    ARTICLE
VII

    Events
of Default and Remedies

    

    Section
7.01.                                 Events of
Default. The
term "Events of Default" shall mean, whenever used with reference to this
Agreement, any one or more of the following occurrences:

    

    (a)            failure
by the Borrower to pay the amounts required to be paid with respect to principal
of or redemption premium, if any, or interest on the Bonds when the same shall
become due and payable, at maturity, upon acceleration, redemption or otherwise;
or

    

    (b)            failure
by the Borrower to pay when due any payment required to be made under this
Agreement (other than payments under subsections (a) and (g) of this Section 7.01), which
failure shall continue for a period of thirty (30) days after written notice,
specifying such failure and requesting that it be remedied, is given to the
Borrower by the Authority or the Trustee, unless the Authority or the Trustee
shall agree in writing to an extension of such time prior to its expiration;
or

    

    (c)            failure
by the Borrower to comply, in any material respect, with any of the covenants
set forth in Section
5.01 of this Agreement; or

    

    (d)            failure
by the Borrower to duly perform, observe or comply with any covenant, condition
or agreement on its part under this Agreement or under the Security Agreements
(except the covenant to maintain insurance contained in the Pledge Agreement),
other than a failure by the Borrower to make any payment as described in
subsections (a), (b) or (g) of this Section 7.01 or a
failure to comply, in any material respect, with any of the covenants set forth
in Section 5.01
of this Agreement, and such failure shall continue for a period of thirty (30)
days after the date on which written notice of such failure, requiring the same
to be remedied, shall have been given to the Borrower  and the Letter
of Credit Issuer by the Authority or the Trustee, unless the Authority and the
Trustee shall agree in writing to an extension of such time prior to its
expiration; provided, however, that if such performance, observation or
compliance requires work to be done, action to be taken, or conditions to be
remedied, as the case may be, within such thirty (30) day period, no Event of
Default shall be deemed to have occurred or to exist if, and so long as, the
Borrower shall commence such performance, observation or compliance within such
period and shall diligently and continuously pursue the same to completion;
or

    

    (e)            the
Borrower or the Letter of Credit Issuer shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or taking
possession by a receiver, custodian, liquidator, assignee, trustee or
sequestrator (or other similar official) of itself or of any substantial part of
its property, or shall make a general assignment for the benefit of creditors,
or shall fail generally to pay its debts as they become due, or the Borrower or
its partners or the Letter of Credit Issuer shall take any action in furtherance
of any of the foregoing (except in connection with a consolidation or a merger
of the Borrower with or into another entity or transfer of all or substantially
all the assets of the Borrower not prohibited by Sections 5.01 and
6.01);
or

    

    (f)            a
court having jurisdiction in the premises shall enter a decree or order for
relief in respect of the Borrower or the Letter of Credit Issuer in an
involuntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Borrower, or
the Letter of Credit Issuer, respectively, of any substantial part of their
respective properties, or ordering the winding up or liquidation of their
affairs, and the continuance of such decree or order unstayed and in effect for
a period of sixty (60) consecutive days; or

    

    (g)           failure
by the Borrower to replenish the Debt Service Reserve Fund within the periods
set forth in the Trust Agreement or in Section 4.01 of this
Agreement; or

    

     (h) (i) the Letter of Credit
Issuer shall fail to honor a draft under the Letter of Credit complying with the
terms thereof; (ii) the Trustee shall have received from the Letter of Credit
Issuer a notice to the effect that an "event of default has occurred and is
continuing under the Reimbursement Agreement or a notice that the interest
portion of the Letter of Credit will not be reinstated after a draw on such
Letter of Credit, in each case accompanied by instructions in writing from the
Letter of Credit Issuer instructing the Trustee to accelerate the Bonds as a
result of the occurrence and continuance of such event of default under the
Reimbursement Agreement, together with sufficient funds from the Letter of
Credit Issuer to pay the principal of and interest on the Bonds then
outstanding; or (iii) the Letter of Credit shall at any time for any reason
cease to be in full force and effect, or shall be declared to be null and void
in whole or in part, or the validity or enforceability thereof shall be
contested by the Letter of Credit Issuer, or the Letter of Credit Issuer shall
renounce the same or deny that it has any or further liability
thereunder.

    

    The foregoing provisions of
subsection (d) of this Section are subject to the following limitations: if by
reason of Force Majeure, the Borrower is unable in whole or in part to carry out
any of its agreements herein contained, failure of the Borrower to carry out any
such agreements other than the obligations on the part of the Borrower contained
in Section 4.01
and Section
5.01, shall not be deemed an Event of Default during the continuance of
such inability, including a reasonable time for the removal of the effect
thereof.

    

    The term "Force Majeure" shall mean
the following:

    

    (a)           acts
of God; strikes, lockouts or other industrial disturbances; acts of public
enemies; orders or restraints of any kind of the government of the United States
of America or of the Commonwealth or any of its departments, agencies, political
subdivisions or officials, or any civil or military authority; war;
insurrections; civil disturbances; riots; epidemics; landslides; lightning;
earthquakes; fires; hurricanes; storms; droughts; floods; washouts; arrests;
restraint of government and people; explosions; breakage, malfunction or
accident to facilities, machinery, transmission pipes or canals; partial or
entire failure of utilities; shortages of labor, materials, supplies or
transportation; or

    

    (b)            any
cause, circumstance or event not reasonably within the control of the
Borrower.

    

    The Borrower agrees, however to use
its best efforts to remedy with all reasonable dispatch the effects of any Force
Majeure which may prevent it from carrying out its agreements; provided, that
the settlement of strikes, lockouts and other labor disturbances, shall be
entirely within the discretion of the Borrower, and the Borrower shall not be
required to make settlement of strikes, lockouts and other labor disturbances by
acceding to the demands of the opposing party or parties when such course is in
the judgment of the Borrower unfavorable to the Borrower.

    

    Section
7.02.                                 Acceleration;
Remedies. Whenever any Event of
Default hereunder shall have happened and be continuing, any one or more of the
following remedial steps may be taken, subject, however, to the limitations
provided in Section
7.02(b), provided. that written notice of the Event of Default has been
given to the Borrower by the Authority or the Trustee (except that notice need
not be given in the case of an Event of Default specified in Sections 7.01(a).
(c), (e), (f) and (h)) and the Event of
Default has not theretofore been cured and provided further that no remedial
steps shall be taken by the Authority the effect of which would be to entitle
the Authority to funds necessary for the payment of principal of and interest on
Bonds which have not yet matured or otherwise become due unless such principal
and interest shall have been declared due and payable in accordance with the
Trust Agreement and such declaration shall not have been rescinded:

    

    (1) The Authority may at its option
declare all unpaid amounts payable under Section 4.01 to be
immediately due and payable, whereupon the same shall become immediately due and
payable.

    

    (2) The Authority may take any action
at law or in equity to collect the payments then due and' thereafter to become
due, or to enforce performance and observance of any obligation, agreement or
covenant of the Borrower under this Agreement or the Security
Agreements.

    

    Section
7.03.                                 Remedies
Not Exclusive. No remedy conferred upon
or reserved to the Authority in connection with the Loan to the Borrower
pursuant to this Agreement is intended to be exclusive of any other available
remedy or remedies, but each and every remedy shall be cumulative and shall be
in addition to every other remedy either given under this Agreement or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as it may be deemed
expedient. In order to entitle the Authority to exercise any remedy reserved to
it in this Article, it shall not be necessary to give any notice, other than
such notice as may be herein expressly required.

    

    Section
7.04.                                 Attorneys'
Fees and Expenses. If an Event of Default
shall occur and the Authority or the Trustee shall employ attorneys or incur
other expenses for the collection of payments due hereunder or for the
enforcement of performance or observance of any obligation or agreement on the
part of the Borrower contained herein, the Borrower will on demand therefor
reimburse the reasonable fees of such attorneys and such other expenses so
incurred.

    

    Section
7.05.                                 Waivers. In view of the
assignment of the Authority's rights under and interest in this Agreement to the
Trustee by the provisions of the Trust Agreement (except for the rights reserved
by the Authority hereunder), the Authority shall have no power to waive any
default hereunder by the Borrower or extend the time for the correction of any
default which could become an Event of Default by the Borrower without the
consent of the Trustee and the Letter of Credit Issuer to such
waiver.

    

    ARTICLE
VIII

    Prepayment
of the Loan

    

    Section
8.01.                                 Optional
Prepayment. (a) The Borrower shall
have, and is hereby granted, the option to prepay all or any portion of the
amounts payable in respect of the Bonds under Section 4.01 by
taking the actions required to effect an optional redemption of the Bonds
pursuant to Section
301(b) of the Trust Agreement; provided, however, that the Borrower may
not effect an optional redemption of the Bonds pursuant to Section 301(b) of the Trust
Agreement -unless they first take the actions described in subsection (b) of
this Section.

    

    (b) To
make a prepayment pursuant to subsection (a) of this Section, the Borrower shall
give or cause to be given to the Authority and the Trustee: (A)(i) the written
consent of the Initial Letter of Credit,Issuer to
such prepayment, which consent shall contain a representation from the Initial
Letter of Credit Issuer to the effect that the Borrower is not in default under
the Reimbursement Agreement, and that all conditions contained in the
Reimbursement Agreement to effect such prepayment have been complied with; and
(ii) deposit with the Trustee sufficient moneys to pay the redemption price
(including premium, if any) of the Bonds, no later than ninety-four (94) days
prior to the date selected for the prepayment of the Loan, but in any event with
sufficient time to allow the moneys to constitute Eligible Moneys on the date of
such intended prepayment; and (B) written notice setting forth: (i) the date of
redemption, which date shall be an Interest Payment Date occurring not less than
ninety-four (94) days from the date notice is received by the Trustee; (ii) the
principal amount and maturities of the Bonds to be redeemed; and (iii) the
applicable redemption provision of the Trust Agreement.

    

    (c) The
Borrower agrees to make the payments under this Section 8.01 to the
Trustee for deposit to the Bond Fund in the amount due in respect of any
redemption premium at such time so that such payments constitute Eligible Moneys
under the Trust Agreement.

    

    Section
8.02.                                 Mandatory
Prepayment of Loan. (a) The Borrower shall
be obligated, and agrees, to prepay a portion of the amount payable under Section 4.01 to the
extent and in the manner set forth in Section 301 (a) of
the Trust Agreement.

    

    (b)            The
Borrower shall be obligated, and agrees, to prepay a portion of the amount
payable under Section
4.01 on or prior to each Interest Payment Date for which there shall be
an Amortization Requirement in an amount equal to such Amortization Requirement
to the extent and in the manner set forth in Section 3.01(d) of
the Trust Agreement.

    

    (c)            The
Borrower shall be obligated, and agrees, to prepay all of the unpaid aggregate
amount of the Loan, together with accrued interest to the date of prepayment, if
the Trustee: (i) shall have received a written notice from the Initial Letter of
Credit Issuer to the effect that it has decided not to extend the Initial Letter
of Credit and the Initial Letter of Credit Issuer deposits, on or prior to the
sixtieth (60th) day preceding the expiration date of the Initial Letter of
Credit, an amount sufficient, together with other Eligible Moneys deposited with
the Trustee, to pay the outstanding principal and interest on the Bonds; or (ii)
shall not have received on or before the sixtieth (60th) day preceding the
expiration date of any then outstanding Successor Letter of Credit the following
documents:

    

    (1)           a
Successor Letter of Credit;

    

    (2)           an
executed copy of the Successor Reimbursement Agreement;

    

    (3)           
an opinion of counsel to the Borrower, acceptable to the Authority and the
Trustee, to the effect that: (i) the acceptance by the Trustee of the Successor
Letter of Credit will not require that the Bonds, the obligations of the
Borrower under this Agreement or the Successor Letter of Credit to be registered
under the Securities Act of 1933, as amended, or the Puerto Rico Uniform
Securities Act,. as amended, or the qualification of the Trust Agreement under
the Trust Indenture Act of 1939, as amended; or (ii) any registration statement
required to be filed under the Securities Act of 1933, as amended, or the Puerto
Rico Uniform Securities Act, as amended, with respect to the Bonds, the
Borrower's obligations under this Agreement or the Successor Letter of Credit is
effective under such Act, and the Trust Agreement has been duly qualified under
the Trust Indenture Act of 1939, as amended;

    

    (4)           
an opinion of counsel to the issuer of the Successor Letter of Credit, to the
effect that the Successor Letter of Credit is a legal, valid and binding
obligation of the Successor Initial Letter of Credit Issuer (subject to
customary bankruptcy, creditor's rights and general principles of equity
exceptions);

    

    (5)           written
confirmation from S&P to the Trustee that after upon delivery of such
Successor Letter of Credit the Bonds will not be rated lower than "A-" by
S&P (or any similar rating then used by S&P); unless such Successor
Letter of Credit is to be issued by an instrumentality of Puerto Rico in which
case the Bonds may not be rated lower than "BBB" by S&P;

    

    (6)           a
representation from the Successor Letter of Credit Issuer or an opinion from its
legal counsel to the effect that the Successor Letter of Credit Issuer and the
Borrower, as to each other, are not insiders or affiliates, as those terms are
defined in the applicable statutory provisions of the United States Bankruptcy
Code, as amended;

    

    (7)           an
opinion of counsel to the Authority to the effect that: (i) all documents and
opinions required to be delivered to the Trustee under this Section 8.02(c) have
been delivered and such documents and opinions on their face comply with the
requirements of this Section 8.02(c) and
of the Trust Agreement, and that the delivery of the Successor Letter of Credit
is authorized under and complies with the terms of the Loan Agreement; and (ii)
that the acceptance of the Successor Letter of Credit shall not adversely affect
the tax treatment of the Bonds; and

    

    (8)           such
other documents and opinions as the Trustee may reasonably request.

    

    In any such case described in the
preceding paragraph, the Borrower shall be obligated to pay a sum sufficient,
together with any other funds held by the Trustee and available for such
purpose: (i) to redeem, on the date specified pursuant to the Trust Agreement,
all outstanding Bonds at a redemption price equal to the principal amount of the
Bonds; (ii) to pay the interest which will accrue on the Bonds to the date so
fixed for their redemption; and (iii) to make all other payments required
hereunder accrued and to accrue through the date fixed for such redemption;
provided, however, that if the Initial Letter of Credit Issuer elects to not
renew its Letter of Credit, as provided in Section 2 of the Initial Letter of
Credit and in the preceding paragraph, the prepayment of the full unpaid
aggregate amount of the Loan shall be made from the moneys received from the
Initial Letter of Credit Issuer in accordance with Section 2 of the Initial
Letter of Credit and the preceding paragraph. The Borrower agrees to make the
payments required by this Section 8.02(c) on or
prior to the redemption date set for the Bonds pursuant to Section 301(c) of the
Trust Agreement.

    

    (d) The Borrower shall be obligated,
and agrees to prepay, in whole or in part, the amount payable under Section 4.01 upon the
occurrence of an event of condemnation. damage to or destruction of the Project
to the extent required under the terms of the Pledge Agreement or as otherwise
allowed by the terms of the Reimbursement Agreement. The Letter of Credit Issuer
or the Borrower, with the written consent of the Letter of Credit Issuer, shall
deliver to the Trustee a notice stating that the Borrower has become obligated
to prepay, in whole or in part, the amount payable under Section 4.01, setting
forth the amount required to pay the redemption price of the Bonds pursuant to
Section 301(d)
of the Trust Agreement, The Borrower agrees to make the payment required by this
paragraph (d) for deposit to the credit of the Bond Fund at the time such notice
is delivered to the Trustee.

    Section
8.03.                                 Relative
Position of Loan Agreement and Trust Agreement, The rights and the
obligations of the Borrower in this Article VIII shall be and remain prior and
superior to the Trust Agreement and may be exercised or shall be fulfilled, as
the case may be, whether or not the Borrower is in default hereunder, provided
that such default will not result in nonfulfillment of any condition to the
exercise of any such right or option.

    

    The obligations of the Borrower in
Section 8.02 shall be joint
and several obligations of the Borrower and supersede the rights and options of
the Borrower contained in Section
8.01.

    

    ARTICLE
IX

    Miscellaneous

    

    Section
9.01.                                 Termination. This Agreement and all
obligations of the parties thereunder, other than the obligations of the
Borrower under Sections 4.05, 5.07 and 5.10, shall terminate
upon: (i) Payment of the Bonds; and (ii) payment or satisfaction of all other
obligations incurred by the Authority or the Borrower under this Agreement,
including (without limitation) interest, premiums and other charges, if any,
thereon. Upon such termination any amounts remaining in the Bond Fund, the Debt
Service Reserve Fund and any other fund or account established under the Trust
Agreement not needed for payment of the aforesaid items shall belong to and be
paid to the Borrower by the Trustee in accordance with the provisions of the
Trust Agreement.

    

    Section
9.02.                                 Reference
to Bonds Ineffective After Bonds Paid. Upon Payment of the
Bonds, including all fees and charges of the Trustee and termination of the
Reimbursement Agreement, and the Letter of Credit, all references in this
Agreement to the Bonds and the Trustee shall be ineffective, and the Trustee,
the Authority, the Letter of Credit Issuer and the holders of any of the Bonds
shall not thereafter have any right hereunder, excepting those that shall have
theretofore vested.

    

    Section
9.03.                                  No
Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Agreement should be breached by any party hereof and
thereafter waived by the other parties, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder..

    

    Section
9.04.                                 Authority Representative. Whenever under the
provisions of this Agreement the approval of the Authority is required or the
Authority is required to take some action at the request of the Borrower, such
approval shall be made or such action shall be taken by the Authority
Representative and such approval or action shall not be unreasonably denied or
delayed; and the Borrower and the Trustee shall be authorized to act on any such
approval or action.

    

    Section
9.05.                                 Borrower
Representative. Whenever under the
provisions of this Agreement the approval of the Borrower is required or the
Borrower is required to take some action at the request of the Authority, such
approval shall be made or such action shall be taken by the Borrower
Representative and such approval or action shall not be unreasonably denied or
delayed; and the Authority and the Trustee shall be authorized to act on any
such approval or action.

    

    Section
9.06.                                 Confidential Information, The Borrower shall not
be required to disclose, or to permit the Authority, the Trustee or others to
acquire access to, any trade secrets of the Borrower or any other processes,
techniques or information deemed by the Borrower to be proprietary or
confidential.

    

    Section
9.07.                                 Notices. All notices,
certificates, requests or other communications among the Authority, the
Borrower, the Trustee and the Letter of Credit Issuer required to be given
hereunder or under the Trust Agreement shall be in writing and shall be (as
elected by the person giving the notice) hand-delivered by courier service or
mailed by registered mail, postage prepaid, and each such notice shall be deemed
delivered: (i) if by courier service, on the date delivered receipt is
acknowledged or delivery is refused; or (ii) if mailed, on the third Business
Day following the day when mailed. All notices under this Agreement shall be
addressed as follows:

    

    

    

    If to the Authority:

    

    Puerto Rico Industrial, Tourist,
Educational,

    Medical and Environmental
Control

    Facilities Financing
Authority

    c/o Government Development Bank for
Puerto Rico

    PO Box 42001

    San Juan, Puerto Rico
00940

    

     Attention: Executive
Director

    

    If to the Borrower:

    

    Palmas Country Club,
Inc.

    PO Box 2020

    Humacao, Puerto Rico
00792-2020

    

     Attention:
President

    and:

    

    Palmas Country Club,
Inc.

    5847 San Felipe Suite
2600

    Houston, Texas 77057

    

    Attention: General
Counsel

    

    If to the Trustee:

    

    PaineWebber Trust Company of Puerto
Rico

    American International
Plaza

    9th
Floor

    250 Munoz Rivera Avenue

    San Juan, Puerto Rico
00918

    

    Attention: Trust
Officer

    

    If to the Initial Letter of Credit
Issuer:

    

    Puerto Rico Tourism Development
Fund

    c/o Government Development Bank for
Puerto Rico

     Minillas Government Center,
Small Building

    Fourth Floor, De Diego Avenue
and

    Baldorioty de Castro, Stop
22

    Santurce, Puerto Rico
00911

    

    Attention: Executive
Director

    

    A
duplicate copy of each notice, certificate, request or other communication given
hereunder to the Authority, the Borrower, the Trustee, or the Letter of Credit
Issuer shall also be given to each of the others. The Borrower, the Authority,
the Trustee, and the Letter of Credit Issuer, may by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates, requests or other communications shall be sent.

    

    

    Section
9.08.                                 Binding
Effect. This
Agreement shall inure to the benefit of and shall be binding upon the Authority,
the Borrower and their respective successors and assigns, subject, however, to
the provisions contained in Sections 5.01, 6.01
and 6.02.

    

    Section
9.09.                                  If
Payment or Performance Date Not a Business
Day. If the
date for making payment, or the last date of performance of any act or the
exercising of any right, as provided in this Agreement, shall not be a Business
Day, such payment may be made or act performed or right exercised on the next
succeeding Business Day with the same force and effect as if done on the nominal
date provided in this Agreement, and no interest shall accrue for the period
after such nominal date.

    

    Section
9.10.                                 Severability. In the event any
provision of this Agreement shall be held invalid or unenforceable by any court
of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.

    

    Section
9.11.                                 Amendments,
Changes and Modifications. Subsequent to the
issuance of the Bonds under Section 208 of the
Trust Agreement and prior to Payment of the Bonds, this Agreement may not be
effectively amended, changed, modified, altered or terminated except in
accordance with the Trust Agreement.

    

    Section
9.12.                                  Execution
in Counterparts. This Agreement may be
executed in several counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.

    

    Section
9.13.                                 Applicable
Law. This
Agreement shall be governed by and construed in accordance with the laws of the
Commonwealth.

    

    Section
9.14.                                 No Charge
Against Authority Credit. No provision hereof
shall be construed to impose a charge against the general credit of the
Authority or shall impose any personal or pecuniary liability upon any director,
official or employee of the Authority.

    

    Section
9.15.                                  Authority
Not Liable. Notwithstanding any
other provision of this Agreement: (a) the Authority shall not be liable to the
Borrower, the Trustee, the Letter of Credit Issuer, any holder of any of the
Bonds, or any other person for any failure of the Authority to take action under
this Agreement unless the Authority: (i) is requested in writing by an
appropriate person to take such action; and (ii) is assured of payment of or
reimbursement for any expenses in such action; and (b) except with respect to
any action for specific performance or any action in the nature of a prohibitory
or mandatory injunction, neither the Authority nor any director of the Authority
or any other official or employee of the Authority shall be liable to the
Borrower, the Trustee, the Letter of Credit Issuer, any holder of any of the
Bonds, or any other person for any action taken by it or by its officers,
servants, agents or employees, or for any failure to take action under this
Agreement or the Trust Agreement. In acting under this Agreement, or in
refraining from acting under this Agreement, the Authority may conclusively rely
on the advice of its legal counsel.

    

    Section
9.16.                                 Agreement
Supersedes Prior Agreements. This Agreement
supersedes any other prior agreements or understandings, written or oral,
between the parties with respect to the Project and the issuance of the
Bonds.

    
      
         

      

      
        
          

        

      

       

    

    IN WITNESS WHEREOF, the
Authority and the Borrower have caused this Agreement to be executed in their
respective legal names, all as of the date first above written,

    

    PUERTO
RICO INDUSTRIAL, TOURIST,

    EDUCATIONAL,
MEDICAL AND ENVIRONMENTAL

    CONTROL
FACILITIES FINANCING AUTHORITY

    

    
      	
              By:

            	
                                 
      /s/  Carlos Colon de
Armas

            

    

                                                      Carlos Colon de Armas

                                                                                                                     
   Executive Director

    

    

    PALMAS
COUNTRY CLUB, INC.

    

    

    
      	
              By:

            	
                               /s/  Jaime
      Morgan Stubbe

            

    

                                                       Jaime
Morgan Stubbe

                                              
       President

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