Document:

Exhibit 10.1

 

EXECUTION

 

 

$110,340,000

 

CREDIT AGREEMENT

 

among

 

PROTECTION ONE, INC.,

 

PROTECTION ONE ALARM
MONITORING, INC.,

 

as Borrower,

 

The Several Lenders

 

from Time to Time Parties
Hereto,

 

LEHMAN BROTHERS INC.,

 

as Syndication Agent,

 

and

 

BEAR STEARNS CORPORATE LENDING
INC.,

 

as Administrative Agent

 

Dated as of March 14, 2008

 

BEAR, STEARNS & CO. INC.,

as Joint Lead Arranger and Joint Bookrunner

 

and

 

LEHMAN BROTHERS INC.,

as Joint Lead Arranger and Joint Bookrunner

 

 

TABLE OF CONTENTS

 

	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  
	
  SECTION 1.
  DEFINITIONS

  	
  1

  
	
   

  	
   

  	
   

  
	
  1.1.

  	
  Defined
  Terms

  	
  1

  
	
  1.2.

  	
  Other
  Definitional Provisions

  	
  23

  
	
   

  	
   

  	
   

  
	
  SECTION 2.
  AMOUNT AND TERMS OF COMMITMENTS

  	
  24

  
	
   

  	
   

  	
   

  
	
  2.1.

  	
  Commitments

  	
  24

  
	
  2.2.

  	
  Procedure
  for Borrowing

  	
  24

  
	
  2.3.

  	
  Repayment of
  Loans; Payment of Fees

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 3.
  [RESERVED]

  	
  25

  
	
   

  	
   

  	
   

  
	
  SECTION 4.
  GENERAL PROVISIONS APPLICABLE TO LOANS

  	
  25

  
	
   

  	
   

  	
   

  
	
  4.1.

  	
  Optional
  Prepayments

  	
  25

  
	
  4.2.

  	
  [Reserved.]

  	
  25

  
	
  4.3.

  	
  [Reserved.]

  	
  25

  
	
  4.4.

  	
  [Reserved.]

  	
  25

  
	
  4.5.

  	
  Interest
  Rates and Payment Dates

  	
  25

  
	
  4.6.

  	
  Computation
  of Interest and Fees

  	
  26

  
	
  4.7.

  	
  [Reserved.]

  	
  26

  
	
  4.8.

  	
  Pro Rata
  Treatment and Payments

  	
  26

  
	
  4.9.

  	
  Requirements
  of Law

  	
  27

  
	
  4.10.

  	
  Taxes

  	
  27

  
	
  4.11.

  	
  [Reserved.]

  	
  30

  
	
  4.12.

  	
  Change of
  Lending Office

  	
  30

  
	
  4.13.

  	
  Replacement
  of Lenders

  	
  30

  
	
  4.14.

  	
  Evidence of
  Debt

  	
  31

  
	
  4.15.

  	
  [Reserved.]

  	
  31

  
	
  4.16.

  	
  Repayment
  Offers

  	
  31

  
	
  4.17.

  	
  Mandatory
  Offer to Repay Upon Change of Control

  	
  32

  
	
   

  	
   

  	
   

  
	
  SECTION 5.
  REPRESENTATIONS AND WARRANTIES

  	
  33

  
	
   

  	
   

  	
   

  
	
  5.1.

  	
  Financial
  Condition

  	
  33

  
	
  5.2.

  	
  No Change

  	
  34

  
	
  5.3.

  	
  Corporate
  Existence; Compliance with Law

  	
  34

  
	
  5.4.

  	
  Power;
  Authorization; Enforceable Obligations

  	
  34

  
	
  5.5.

  	
  No Legal Bar

  	
  35

  
	
  5.6.

  	
  Litigation

  	
  35

  
	
  5.7.

  	
  No Default

  	
  35

  
	
  5.8.

  	
  Ownership of
  Property; Liens

  	
  35

  

 

 

	
  5.9.

  	
  Intellectual
  Property

  	
  35

  
	
  5.10.

  	
  Taxes

  	
  35

  
	
  5.11.

  	
  Federal
  Regulations

  	
   

   

  
	
  5.12.

  	
  Labor
  Matters

  	
  36

  
	
  5.13.

  	
  ERISA

  	
  36

  
	
  5.14.

  	
  Investment
  Company Act; Other Regulations

  	
  36

  
	
  5.15.

  	
  Subsidiaries

  	
  37

  
	
  5.16.

  	
  Use of
  Proceeds

  	
  37

  
	
  5.17.

  	
  Environmental
  Matters

  	
  37

  
	
  5.18.

  	
  Accuracy of
  Information, etc.

  	
  38

  
	
  5.19.

  	
  Solvency

  	
  38

  
	
   

  	
   

  	
   

  
	
  SECTION 6.
  CONDITIONS PRECEDENT

  	
  38

  
	
   

  	
   

  	
   

  
	
  6.1.

  	
  Conditions
  to Closing Date

  	
  38

  
	
   

  	
   

  	
   

  
	
  SECTION 7.
  AFFIRMATIVE COVENANTS

  	
  40

  
	
   

  	
   

  	
   

  
	
  7.1.

  	
  Commission
  Reports

  	
  40

  
	
  7.2.

  	
  Compliance
  Certificate; Default Notice

  	
  41

  
	
  7.3.

  	
  Payment of
  Obligations; Taxes

  	
  42

  
	
  7.4.

  	
  Maintenance
  of Existence

  	
  42

  
	
  7.5.

  	
  Maintenance
  of Property; Insurance

  	
  42

  
	
  7.6.

  	
  Inspection
  of Property; Books and Records; Discussions

  	
  43

  
	
  7.7.

  	
  Notices

  	
  43

  
	
  7.8.

  	
  Environmental
  Laws

  	
  44

  
	
  7.9.

  	
  [Reserved.]

  	
  44

  
	
  7.10.

  	
  Additional
  Subsidiaries

  	
  44

  
	
  7.11.

  	
  Further
  Assurances

  	
  44

  
	
  7.12.

  	
  Stay,
  Extension and Usury Laws

  	
  45

  
	
   

  	
   

  	
   

  
	
  SECTION 8.
  NEGATIVE COVENANTS

  	
  45

  
	
   

  	
   

  	
   

  
	
  8.1.

  	
  [Reserved.]

  	
  45

  
	
  8.2.

  	
  Indebtedness

  	
  45

  
	
  8.3.

  	
  Liens

  	
  48

  
	
  8.4.

  	
  Merger,
  Consolidation or Sale of Assets

  	
  48

  
	
  8.5.

  	
  Disposition
  of Property

  	
  49

  
	
  8.6.

  	
  Restricted
  Payments

  	
  50

  
	
  8.7.

  	
  [Reserved.]

  	
  52

  
	
  8.8.

  	
  [Reserved.]

  	
  52

  
	
  8.9.

  	
  [Reserved.]

  	
  52

  
	
  8.10.

  	
  Transactions
  with Affiliates

  	
  52

  
	
  8.11.

  	
  [Reserved.]

  	
  54

  
	
  8.12.

  	
  [Reserved.]

  	
  54

  
	
  8.13.

  	
  Changes in
  Fiscal Periods

  	
  54

  
	
  8.14.

  	
  [Reserved.]

  	
  54

  

 

 

	
  8.15.

  	
  Clauses
  Restricting Subsidiary Distributions

  	
  54

  
	
  8.16.

  	
  Business
  Activities

  	
  56

  
	
  8.17.

  	
  Payments for
  Consent

  	
  56

  
	
  8.18.

  	
  Issuance and
  Sales of Equity Interests in Subsidiaries

  	
  56

  
	
   

  	
   

  	
   

  
	
  SECTION 9.
  EVENTS OF DEFAULT

  	
  56

  
	
   

  	
   

  	
   

  
	
  SECTION 10.
  THE AGENTS

  	
  59

  
	
   

  	
   

  	
   

  
	
  10.1.

  	
  Appointment

  	
  59

  
	
  10.2.

  	
  Delegation
  of Duties

  	
  59

  
	
  10.3.

  	
  Exculpatory
  Provisions

  	
  59

  
	
  10.4.

  	
  Reliance by
  Agents

  	
  60

  
	
  10.5.

  	
  Notice of
  Default

  	
  60

  
	
  10.6.

  	
  Non-Reliance
  on Agents and Other Lenders

  	
  60

  
	
  10.7.

  	
  Indemnification

  	
  61

  
	
  10.8.

  	
  Agent in Its
  Individual Capacity

  	
  61

  
	
  10.9.

  	
  Successor
  Administrative Agent

  	
  61

  
	
  10.10.

  	
  Agents
  Generally

  	
  62

  
	
  10.11.

  	
  The
  Bookrunners and the Lead Arrangers

  	
  62

  
	
  10.12.

  	
  Withholding
  Tax

  	
  62

  
	
   

  	
   

  	
   

  
	
  SECTION 11.
  MISCELLANEOUS

  	
  62

  
	
   

  	
   

  	
   

  
	
  11.1.

  	
  Amendments
  and Waivers

  	
  62

  
	
  11.2.

  	
  Notices

  	
  64

  
	
  11.3.

  	
  No Waiver;
  Cumulative Remedies

  	
  65

  
	
  11.4.

  	
  Survival of
  Representations and Warranties

  	
  65

  
	
  11.5.

  	
  Payment of
  Expenses and Taxes

  	
  65

  
	
  11.6.

  	
  Successors
  and Assigns; Participations and Assignments

  	
  67

  
	
  11.7.

  	
  Adjustments;
  Set-off

  	
  70

  
	
  11.8.

  	
  Counterparts

  	
  70

  
	
  11.9.

  	
  Severability

  	
  70

  
	
  11.10.

  	
  Integration

  	
  70

  
	
  11.11.

  	
  GOVERNING
  LAW

  	
  71

  
	
  11.12.

  	
  Submission
  To Jurisdiction; Waivers

  	
  71

  
	
  11.13.

  	
  Acknowledgments

  	
  71

  
	
  11.14.

  	
  Releases of
  Guarantees

  	
  72

  
	
  11.15.

  	
  Confidentiality

  	
  72

  
	
  11.16.

  	
  WAIVERS
  OF JURY TRIAL

  	
  72

  
	
  11.17.

  	
  Delivery of
  Addenda

  	
  73

  
	
  11.18.

  	
  USA PATRIOT
  Act

  	
  73

  

 

 

	
  SCHEDULES:

  	
   

  
	
   

  	
   

  	
   

  
	
  1.1(a)

  	
  Existing
  Indebtedness

  	
   

  
	
  1.1(b)

  	
  Liens

  	
   

  
	
  5.4

  	
  Consents,
  Authorizations, Filings and Notices

  	
   

  
	
  5.15

  	
  Subsidiaries

  	
   

  
	
  8.10

  	
  Affiliate
  Transactions

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  A

  	
  Form of
  Closing Date Certificate

  	
   

  
	
  B

  	
  Form of
  Assignment and Assumption

  	
   

  
	
  C

  	
  Form of
  Legal Opinion of Kirkland & Ellis LLP

  	
   

  
	
  D

  	
  Form of
  Exemption Certificate

  	
   

  
	
  E

  	
  Form of Note

  	
   

  
	
  F

  	
  Form of
  Addendum

  	
   

  
	
  G

  	
  Form of
  Solvency Certificate

  	
   

  

 

 

CREDIT AGREEMENT, dated as of March 14,
2008, among PROTECTION ONE, INC., a Delaware corporation (“Holdings”), PROTECTION
ONE ALARM MONITORING, INC., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”), BEAR, STEARNS & CO.
INC. (“Bear Stearns”) and LEHMAN BROTHERS INC. (“Lehman Brothers”),
as joint bookrunners (in such capacity, collectively, the “Bookrunners”),
Bear Stearns and Lehman Brothers, as joint lead arrangers (in such capacity,
collectively, the “Lead Arrangers”), Lehman Brothers, as syndication
agent (in such capacity, the “Syndication Agent”), and BEAR STEARNS
CORPORATE LENDING INC. (“BSCL”), as administrative agent (in such
capacity, and together with its successors in such capacity,  the “Administrative Agent”).

 

RECITALS:

 

                WHEREAS, capitalized terms used in
these Recitals shall have the respective meanings set forth for such terms in Section 1.1
hereof;

 

                WHEREAS, the Borrower desires that the
Lenders party hereto establish Loans to be made hereunder; and

 

                WHEREAS,
the Lenders party hereto have agreed to make Loans hereunder in an amount up to
their respective Commitments in accordance with Section 2.1 herein, the
proceeds of which shall be used to repay in full the Existing Senior
Subordinated Notes on the Closing Date and to pay related premiums, fees and
expenses.

 

                NOW, THEREFORE, in consideration of
the premises and the agreements, provisions and covenants herein contained, the
parties hereto agree as follows:

 

SECTION 1.  DEFINITIONS

 

1.1.          Defined Terms.  As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section 1.1.

 

“Acquired Debt”: with respect to any
specified Person: (1) Indebtedness of any other Person existing at the
time such other Person is merged with or into or became a Subsidiary of such
specified Person, including Indebtedness incurred in connection with, or in
contemplation of, such other Person merging with or into or becoming a
Subsidiary of such specified Person; and (2) Indebtedness secured by a
Lien encumbering any asset acquired by such specified Person.

 

“Addendum:”  an instrument, substantially in the form of Exhibit F,
by which a Lender becomes a party to this Agreement as of the Closing Date.

 

“Adjusted Consolidated Net Tangible Assets”:
the total amount of assets of Holdings and its Subsidiaries (less applicable
depreciation, amortization and other valuation reserves), except to the extent
resulting from write-ups of capital assets (excluding write-ups in connection
with accounting for acquisitions in conformity with GAAP), after deducting 

 

1

 

therefrom (i) all
current liabilities of Holdings and its Subsidiaries (excluding intercompany
items) and (ii) all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as set
forth on the most recent quarterly or annual consolidated balance sheet of
Holdings and its Subsidiaries, prepared in conformity with GAAP and filed with
the SEC or provided to the Administrative Agent.

 

“Administrative Agent”:  as defined in the preamble to this Agreement.

 

“Affiliate”:  as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person.  For purposes
of this definition, “control” of a Person means the power, directly or
indirectly, either to (a) vote 10% or more of the securities having
ordinary voting power for the election of directors (or persons performing
similar functions) of such Person or (b) direct or cause the direction of
the management and policies of such Person, whether by contract or
otherwise.   Solely for purposes of
determining whether a Person is an Affiliate of Holdings for purposes of the
definition of the term “Required Lenders”, the percentage specified in clause (a) of
the preceding sentence shall be deemed to be 5% unless such Person and its
Affiliates hold or beneficially own Loans in an aggregate unpaid principal
amount equal to or greater than, as of the date of determination, two times the
aggregate value of the Economic Interest of such Person and its Affiliates,
directly or indirectly, in the Equity Interests of Holdings as of the date of
determination, in which case such percentage shall be deemed to be 10%.

 

“Agents”:  the collective reference to the Bookrunners,
Syndication Agent, the Lead Arrangers and the Administrative Agent.

 

“Aggregate Exposure”:  with respect to any Lender at any time, an
amount equal to the aggregate then unpaid principal amount of such Lender’s
Loans.

 

“Aggregate Exposure Percentage”:  with respect to any Lender at any time, the
ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at such
time to the Aggregate Exposure of all Lenders at such time.

 

“Agreement”:  this Credit Agreement.

 

“Applicable Margin”:  for any day, 11.5%.

 

“Approved Fund”:  (a) a CLO and (b) with respect to
any Lender that is a fund which invests in commercial loans, any other fund
that invests in commercial loans and is managed or advised by the same
investment advisor as such Lender or by an Affiliate of such investment advisor.

 

“Asset Acquisition”:  (i) any transaction pursuant to which
any Person shall become a Subsidiary of Holdings or shall be consolidated or
merged with Holdings or any of its Subsidiaries or (ii) the acquisition by
Holdings or any of its Subsidiaries of assets of any Person comprising a
division or line of business of such Person

 

2

 

“Asset Sale”:  any sale, transfer or other disposition
(including by way of merger, consolidation or sale-leaseback transaction) in
one transaction or a series of related transactions by Holdings or any of its
Subsidiaries to any Person other than Holdings or any of its Subsidiaries of (i) all
or any of the Capital Stock of any Subsidiary owned by Holdings or any
Subsidiary, (ii) all or substantially all of the property and assets of an
operating unit or business of Holdings or any of its Subsidiaries or (iii) any
other property and assets (other than the Capital Stock or other Investment in
any Affiliate of Holdings not controlled, directly or indirectly, by Holdings)
of Holdings or any of its Subsidiaries outside the ordinary course of business
of Holdings or such Subsidiary and, in each case, that is not governed by the
provisions of this Agreement applicable to mergers, consolidations and sales of
assets of Holdings; provided that “Asset Sale” shall not include (a) sales,
transfers or other dispositions of inventory, receivables, equipment leases,
capital lease obligations and other current assets, (b) sales, transfers
or other dispositions of assets constituting a Restricted Payment permitted to
be made under Section 8.6, (c) bona fide sales, transfers or other
dispositions of assets for consideration (including cash equalization payments)
at least equal to the fair market value (as determined by the board of
directors of Holdings) of the assets sold, transferred or disposed of, to the
extent that the consideration received would satisfy clause (i)(B) of Section 8.5(b),
(d) sales or other dispositions of delinquent accounts receivable for
collection in the ordinary course of business, (e) sales or other
dispositions of obsolete assets or assets no longer useful in the conduct of
Holdings’ or such Subsidiary’s business, (f) sales or other dispositions
resulting from any casualty or condemnation of property, (g) licenses and
sublicenses of intellectual property and general intangibles and licenses,
leases or subleases in the ordinary course of business, (h) sales,
transfers or other dispositions of assets by Holdings or any of its
Subsidiaries to another such Subsidiary or Holdings, or (i) sales or other
dispositions of assets in any given fiscal year in an amount less than or equal
to $5,000,000.

 

“Assignee”:  as defined in Section 11.6(b).

 

“Assignment and Assumption”:  an Assignment and Assumption, substantially
in the form of Exhibit B.

 

“Benefited Lender”:  as defined in Section 11.7(a).

 

“Board”:  the Board of Governors of the Federal Reserve
System of the United States (or any successor).

 

“Bookrunners”: as defined in the preamble
to this Agreement.

 

“Borrower”: 
as defined in the preamble to this Agreement.

 

“Business”:  as defined in Section 5.17(b).

 

“Business Day”:  a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by
law to close.

 

3

 

“Capital Lease Obligations”:  as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP and, for the
purposes of this Agreement, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.

 

“Capital Stock”:  (1) in the case of a corporation,
capital stock, (2) in the case of an association or business entity, any
and all shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (3) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (4) any other interest or participation that confers on a
Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.

 

“Cash Equivalents”:  (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States government or issued by
any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition; (b) certificates
of deposit, time deposits, eurodollar time deposits or overnight bank deposits
having maturities of twelve months or less from the date of acquisition issued
by any Lender or by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus of not less
than $500,000,000; (c) commercial paper of an issuer rated at least A-2 by
Standard & Poor’s Ratings Services (“S&P”) or P-2 by Moody’s
Investors Service, Inc. (“Moody’s”), or carrying an equivalent
rating by a nationally recognized rating agency, if both of the two named
rating agencies cease publishing ratings of commercial paper issuers generally,
and maturing within twelve months from the date of acquisition; (d) repurchase
obligations of any Lender or of any commercial bank satisfying the requirements
of clause (b) of this definition or of a recognized securities dealer
having combined capital and surplus of not less than $500,000,000, having a
term of not more than 30 days, with respect to securities issued or fully
guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody’s;
(f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any Lender or any
commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which
invest exclusively in assets satisfying the requirements of clauses (a) through
(f) of this definition or money market funds that (i) comply with the
criteria set forth in Securities and Exchange Commission Rule 2a-7 under
the Investment Company Act of 1940, as amended, (ii) are rated AAA by
S&P and Aaa by Moody’s and (iii) have portfolio assets of at least
$5,000,000,000.

 

“Change of Control”:  (i) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any “person” or “group” (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act), other than the Sponsor 

 

4

 

and its
Related Parties, becomes the “beneficial owner” (as such term is defined in Rule 13d-3
and Rule 13d-5 under the Exchange Act), directly or indirectly, of more
than 50% of the Voting Stock of Holdings or the Borrower (measured by voting
power rather than number of shares) or (ii) the first day on which a
majority of the members of the board of directors of Holdings or the Borrower
are not Continuing Directors.

 

“Change of Control Offer”:  as defined in Section 4.17(a).

 

“Change of Control Payment”:  as defined in Section 4.17(a).

 

“Change of Control Payment Date”:  as defined in Section 4.17(a).

 

“CLO”: 
any entity (whether a corporation, partnership, trust or otherwise) that
is engaged in making, purchasing, holding or otherwise investing in bank loans
and similar extensions of credit in the ordinary course of its business and is
administered or managed or sponsored by a Lender or an Affiliate of such
Lender.

 

“Closing Date”:  the date on which the conditions precedent
set forth in Section 6.1 shall have been satisfied or waived (in
accordance with Section 11.1).

 

“Closing Date Certificate”:  a Closing Date Certificate substantially in
the form of Exhibit A.

 

“Code”:  the Internal Revenue Code of 1986, as amended
from time to time.

 

“Commitment”:  as to any Lender, the obligation of such
Lender, if any, to make a Loan to the Borrower hereunder in a principal amount
not to exceed the amount set forth under the heading “Commitment” under such
Lender’s name on such Lender’s Addendum. 
The aggregate amount of the Commitments as of the Closing Date is
$110,340,000.

 

“Commonly Controlled Entity”:  an entity, whether or not incorporated, that
is under common control with the Borrower within the meaning of Section 4001
of ERISA or is part of a group that includes the Borrower and that is treated
as a single employer under Section 414 of the Code.

 

“Company Presentation”:  the Company Presentation dated February 2008
and furnished to the Lenders.

 

“Conduit Lender”:  any special purpose entity organized and
administered by any Lender for the purpose of making Loans otherwise required
to be made by such Lender and designated by such Lender in a written
instrument, subject to the consent of the Administrative Agent and the Borrower
(which consent shall not be unreasonably withheld); provided, that the
designation by any Lender of a Conduit Lender shall not relieve the designating
Lender of any of its obligations to fund a Loan under this Agreement if, for
any reason, its Conduit Lender fails to fund any such Loan, and the designating
Lender (and not the Conduit Lender) shall have the sole right and
responsibility to deliver all consents and waivers required or requested under
this Agreement with respect to its Conduit Lender, and provided, further,
that no Conduit Lender 

 

5

 

shall (a) be
entitled to receive any greater amount pursuant to Section 4.9, 4.10 or
11.5 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed
to have any Commitment.

 

“Consolidated EBITDA”:  for any period, the net income of Holdings
and its Subsidiaries for such period plus, to the extent such amount was
deducted in calculating such net income (i) Consolidated Interest Expense,
(ii) income taxes, (iii) depreciation expense, (iv) amortization
expense, (v) all extraordinary items, nonrecurring and unusual items,
cumulative effects of changes in accounting principles and other non-cash items
reducing such net income, less all extraordinary items, nonrecurring and
unusual items, cumulative effects of changes in accounting principles and other
non-cash items increasing such net income, all as determined on a consolidated
basis for Holdings and its Subsidiaries in conformity with GAAP, and (vi) upfront
expenses resulting from equity offerings, investments, mergers,
recapitalizations, option buyouts, Asset Sales, Asset Acquisitions and similar
transactions to the extent such expenses reduce net income; provided that
Consolidated EBITDA shall not include (w) the net income (or net loss) of
any Person that is not a Subsidiary of Holdings, except (I) with respect
to net income, to the extent of the amount of dividends or other distributions
actually paid to Holdings or any of its Subsidiaries by such Person during such
period and (II) with respect to net losses, to the extent of the amount of
investments made by Holdings or any of its Subsidiaries in such Person during
such period; (x) solely for the purposes of calculating the amount of
Restricted Payments that may be made pursuant to clause (iii) of Section 8.6(a) (and
in such case, except to the extent includable pursuant to clause (w) above),
the net income (or net loss) of any Person accrued prior to the date it becomes
a Subsidiary of Holdings or is merged into or consolidated with Holdings or any
of its Subsidiaries or all or substantially all of the property and assets of
such Person are acquired by Holdings or any of its Subsidiaries; (y) gains
or losses from Asset Sales; and (z) the net income of any Subsidiary of
Holdings (other than the Borrower) to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary of such net
income is not at the time permitted by the operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to such Subsidiary (other than any agreement
or instrument evidencing Indebtedness or Preferred Stock outstanding on the
Closing Date or incurred or issued thereafter without violation of this Agreement);
provided that the terms of any such agreement restricting the declaration and
payment of dividends or similar distributions apply only in the event of a
default with respect to a financial covenant or a covenant relating to payment
(beyond any applicable period of grace) contained in such agreement or
instrument and provided such terms are determined by Holdings to be customary
in comparable financings and such restrictions are determined by Holdings not
to materially affect the Borrower’s ability to make principal or interest
payments on the Loans when due.

 

“Consolidated Fixed Charge Coverage Ratio”:  as of any date of determination, the ratio of
(i) the Consolidated EBITDA for the then most recently completed four
consecutive fiscal quarter period prior to such date for which reports have
been filed with the SEC or provided to the Administrative Agent (the “Quarters”)
to (ii) the aggregate Consolidated Interest Expense during such Quarters.
In making the foregoing calculation, (A) pro forma effect shall be given
to any Indebtedness Incurred or repaid during the period (the “Reference
Period”) 

 

6

 

commencing on
the first day of the Quarters and ending on the date of calculation (other than
Indebtedness Incurred or repaid under a revolving credit or similar arrangement
to the extent of the commitment thereunder (or under any predecessor revolving
credit or similar arrangement) in effect on the last day of such Quarters
unless any portion of such Indebtedness is projected, in the reasonable
judgment of the senior management of the Borrower, to remain outstanding for a
period in excess of 12 months from the date of the Incurrence thereof), in each
case as if such Indebtedness had been Incurred or repaid on the first day of
such Reference Period; (B) Consolidated Interest Expense attributable to
interest on any Indebtedness (whether existing or being Incurred) computed on a
pro forma basis and bearing a floating interest rate shall be computed as if
the rate in effect on the date of calculation (taking into account any Hedging
Obligations applicable to such Indebtedness if such Hedging Obligation has a
remaining term in excess of 12 months or, if shorter, at least equal to the
remaining term of such Indebtedness) had been the applicable rate for the
entire period; (C) pro forma effect shall be given to Asset Sales and
Asset Acquisitions (including giving pro forma effect to the application of
proceeds of any Asset Sales to any discharge or other relief from Indebtedness
to which Holdings and its Subsidiaries are not liable following such Asset Sale
and for cost savings resulting in connection with an Asset Acquisition) that
occur during such Reference Period as if they had occurred and such proceeds
had been applied on the first day of such Reference Period; (D) pro forma
effect shall be given to asset sales and asset acquisitions (including giving
pro forma effect to the application of proceeds of any asset sale to any
discharge or other relief from Indebtedness to which Holdings and the
Subsidiaries are not liable following such asset sale and for cost savings
resulting in connection with an asset acquisition) that have been made by any
Person that has become a Subsidiary of Holdings or has been merged with or into
Holdings or any of its Subsidiaries during such Reference Period and that would
have constituted Asset Sales or Asset Acquisitions had such transactions
occurred when such Person was a Subsidiary of Holdings as if such asset sales
or asset acquisitions were Asset Sales or Asset Acquisitions that occurred on
the first day of such Reference Period; and (E) any amortization of debt
discount created through purchase accounting adjustments in respect of Existing
Indebtedness shall be excluded; provided that to the extent that clause (C) or
(D) of this sentence requires that pro forma effect be given to an Asset
Acquisition or Asset Sale, such pro forma calculation shall be based upon the
four full fiscal quarters immediately preceding the transaction date of the
Person, or division or line of business of the Person, that is acquired or
disposed for which financial information is available.  For purposes of this definition, pro forma
calculations shall be made in good faith by a responsible financial or accounting
officer of the Borrower consistent with (except as otherwise provided in this
Agreement) Article 11 of Regulation S–X, promulgated pursuant to the
Securities Act, as such Regulation may be amended.

 

“Consolidated Interest Expense”:  with respect to Holdings for any period,
without duplication, the sum of (i) the interest expense of such Person
and its Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, including, without limitation, (a) any amortization
of debt discount (other than as provided for in clause (E) of the
definition of “Consolidated Fixed Charge Coverage Ratio”), (b) the net
cost under Hedging Obligations (including any amortization of discounts), (c) the
interest portion of any deferred payment obligation, (d) all commissions,
discounts and other fees and charges owed with respect to letters of credit,
bankers’ acceptance financing or similar facilities and (e) all accrued
interest 

 

7

 

and (ii) the
interest component of Capital Lease Obligations paid or accrued by such Person
and its Subsidiaries during such period as determined on a consolidated basis
in accordance with GAAP; excluding however, (x) any amount of such
interest of any Subsidiary of such Person if the net income of such Subsidiary
is excluded in the calculation of Consolidated EBITDA pursuant to clause (z) of
the definition thereof (but only in the same proportion as the net income of
such Subsidiary is excluded from the calculation of Consolidated EBITDA
pursuant to clause (z) of the definition thereof), (y) the
amortization of deferred financing costs related to the making of the Loans or
to the funding of the obligations under the Existing Credit Agreement or the
Existing Secured Notes and (z) the non-cash amortization of interest rate
caps or swaps the consideration for which is paid in full prior to the 60th day
following the Closing Date in an amount not to exceed $2,000,000 in any fiscal
year, all as determined on a consolidated basis for Holdings and its
Subsidiaries in conformity with GAAP.

 

“Continuing Directors”:  as of any date of determination, any
member of the board of directors of Holdings or the Borrower, as applicable,
who (i) was a member of such board of directors on the date of this
Agreement or (ii) was nominated for election or elected to such board of
directors with the approval of a majority of the Continuing Directors who were
members of such board at the time of such nomination or election.

 

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

 

“Default”:  any of the events specified in Section 9,
whether or not any requirement set forth in Section 9 for the giving of
notice, the lapse of time, or both, has been satisfied.

 

“Disposition”:  with respect to any Property, any sale,
lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof.  The terms “Dispose”
and “Disposed of” shall have correlative meanings.

 

“Disqualified Stock”: means any
Capital Stock that, by its terms (or by the terms of any security into which it
is convertible, or for which it is exchangeable, at the option of the holder
thereof), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
date that is 91 days after the earlier of the stated maturity date of the Loans
or the date on which no Loans remain outstanding; provided that only the
portion of Capital Stock which so matures or is mandatorily redeemable or is so
redeemable at the sole option of the holder thereof prior to such date shall be
deemed Disqualified Capital Stock; provided, further, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
have the right to require the Holdings or any Subsidiary of Holdings to
repurchase such Capital Stock upon the occurrence of a Change of Control or an
Asset Sale shall not constitute Disqualified Stock, if the terms of such
Capital Stock provide that Holdings or any Subsidiary may not repurchase or redeem
any such Capital Stock pursuant to such provisions prior to the Borrower’s
repayment of such Loans as are required to be repaid pursuant to Section 8.5
and Section 4.17.

 

8

 

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

 

“Domestic Subsidiary”:  any Subsidiary of Holdings organized under
the laws of any jurisdiction within the United States.

 

“Economic Interest”:  the fair market value of the Equity Interests
of Holdings, which (a) in the case of common stock or any derivative
instrument the value of which is based upon or relates to common stock, shall
be determined by reference to the most recently quoted stock price for such
common stock on a national securities exchange or, if such common stock is not
traded on any national securities exchange, by a majority of the disinterested
members of the board of directors of Holdings in their good faith judgment and (b) in
the case of any other Equity Interests, shall be determined taking into
consideration any value stipulated by the parties to the transaction involving
the issuance of such other Equity Interests and all relevant attributes of such
other Equity Interests, including preferential rights, limitations on
participation, and cumulative or non-cumulative rates of return.

 

“Eligible Assignee”:  (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country that is a member of the Organization for
Economic Cooperation and Development (the “OECD”), or a political subdivision
of any such country, and having a combined capital and surplus in a dollar
equivalent amount of at least $100,000,000; provided, however,
that such bank is acting through a branch or agency located in the country in
which it is organized or another country that is also a member of the OECD; (c) an
insurance company, mutual fund or other entity which is regularly engaged in
making, purchasing or investing in loans or securities, or any other financial
institution organized under the laws of the United States, any state thereof,
any other country that is a member of the OECD or a political subdivision of
any such country with assets, or assets under management, in a dollar
equivalent amount of at least $100,000,000; (d) any Affiliate of a Lender
or an Approved Fund of a Lender; (e) any other entity (other than a
natural person) which is an “accredited investor” (as defined in Regulation D
under the Securities Act) which extends credit or buys loans as one of its
businesses or investing activities including, but not limited to, insurance
companies, mutual funds and investment funds; (f) any other entity if at
the time of the applicable assignment a Default or Event of Default shall be
continuing and (g) any other entity consented to by the Administrative
Agent and the Borrower.

 

“Environmental Laws”:  any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning occupational safety and health or
protection of the environment, as now or may at any time hereafter be in
effect.

 

“Equity Interests”: means Capital
Stock, all warrants, options or other rights to acquire Capital Stock (but excluding
any debt security that is convertible into, or exchangeable for, Capital
Stock), and any swaps or other derivative instruments the value of which is
based upon or relates to Capital Stock.

 

9

 

“ERISA”:  the Employee Retirement Income Security Act
of 1974, as amended from time to time.

 

“Event of Default”:  any of the events specified in Section 9,
provided that any requirement specified in Section 9 for the giving
of notice, the lapse of time, or both, has been satisfied.

 

“Excess Proceeds”: the amount of Net
Proceeds required to be applied (or to be committed to be applied) during the
period specified in Section 8.5(b)(i) and not applied as so required
by the end of such period.

 

“Exchange Act” the Securities Exchange
Act of 1934, as amended.

 

“Existing Credit Agreement”: the
Amended and Restated Credit Agreement dated as of April 26, 2006 among
Holdings, the Borrower, the lenders from time to time party thereto, Bear,
Stearns & Co. Inc., as sole lead arranger and sole bookrunner in
connection with the amendment and restatement thereof, Bear, Stearns &
Co. Inc. and Lehman Brothers Inc. as initial joint lead arrangers and initial
joint bookrunners, LaSalle Bank National Association, as syndication agent in
connection with the amendment and restatement thereof, Lehman Commercial Paper
Inc., as initial syndication agent, Harris Nesbitt Financing, Inc.,
LaSalle Bank National Association and U.S. Bank National Association, as
co-documentation agents, and Bear Stearns Corporate Lending Inc., as
administrative agent, as amended on March 13, 2007, including any related
notes, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, restated, renewed,
refunded, replaced or refinanced from time to time, including any agreement
extending the maturity of, refinancing, replacing or otherwise restructuring
(including by way of adding Subsidiaries of Holdings as borrowers or guarantors
thereunder) all of or a portion of the Indebtedness under such agreement or any
such successor or replacement agreement and whether by the same or any other
agent, lender or group of lenders (or other institutions) or otherwise.

 

“Existing Indebtedness”:  Indebtedness of Holdings and its Subsidiaries
(other than Indebtedness under the Existing Credit Agreement, Indebtedness
under the Existing Secured Notes and Indebtedness being repaid on the date of
this Agreement) in existence on the date of this Agreement that is set forth on
Schedule 1.1(a), until such amounts are repaid.

 

“Existing Secured Notes”: the Borrower’s
outstanding 12.0% Senior Secured Notes due 2011.

 

“Existing Senior Subordinated Notes”:
the Borrower’s outstanding 8.125% Senior Subordinated Notes due 2009.

 

“Federal Funds Effective Rate”:  for any day, the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the 

 

10

 

average of the quotations for
the day of such transactions received by the Reference Lender from three
federal funds brokers of recognized standing selected by it.

 

“Foreign Subsidiary”:  any Subsidiary of Holdings that is not a
Domestic Subsidiary.

 

“Funding Office”:  the office of the Administrative Agent
specified in Section 11.2 or such other office as may be specified from
time to time by the Administrative Agent as its funding office by written
notice to the Borrower and the Lenders.

 

“GAAP”:  generally accepted accounting principles in
the United States as in effect from time to time, except that for purposes of Section 8.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements referred to in Section 5.1(b).  In the event that any Accounting Change (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect
such Accounting Changes with the desired result that the criteria for
evaluating the Borrower’s financial condition shall be the same after such
Accounting Changes as if such Accounting Changes had not been made.  Until such time as such an amendment shall
have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this
Agreement shall continue to be calculated or construed as if such Accounting
Changes had not occurred.  “Accounting
Changes” refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.

 

“Governmental Authority”:  any nation or government, any state or other
political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).

 

“Group Members”:  the collective reference to Holdings, the
Borrower and their respective Subsidiaries.

 

“Guarantee”: a guarantee other than by
endorsement of negotiable instruments for collection in the ordinary course of
business, direct or indirect, in any manner including, without limitation, by
way of a pledge of assets or through letters of credit or reimbursement
agreements in respect thereof, of all or any part of any Indebtedness.

 

“Guarantee Agreement”:  the Guarantee Agreement, dated as of the
Closing Date, among Holdings and each Subsidiary Guarantor.

 

11

 

“Guarantors”:  the collective reference to Holdings and the
Subsidiary Guarantors.

 

“Hedging Obligations”:  of any Person means the obligations of such
Person under:

 

1.             interest rate protection agreements,
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, interest rate futures and interest rate options;

 

2.             other agreements or arrangements designed
to protect such Person against fluctuations in interest rates; and

 

3.             any foreign exchange contract, currency
swap agreement or other similar agreement or arrangement.

 

“Highfields Entities”: 
Highfields Capital I LP, Highfields Capital II LP and their respective
Affiliates.

 

“Holdings”:  as defined in the preamble to this Agreement.

 

“Indebtedness”:  with respect to any Person, any indebtedness
of such Person, whether or not contingent, in respect of:

 

1.             borrowed money;

 

2.             evidenced by bonds, notes, debentures or
similar instruments or letters of credit (or reimbursement agreements in
respect thereof);

 

3.             banker’s acceptances;

 

4.             Capital Lease Obligations;

 

5.             the balance deferred and unpaid of the
purchase price of any property, except any such balance that constitutes an
accrued expense or trade payable; or

 

6.             any Hedging Obligations; if and to the
extent any of the preceding items (other than letters of credit and Hedging
Obligations) would appear as a liability upon a balance sheet of such Person
prepared in accordance with GAAP.

 

In addition, the term “Indebtedness” includes
Acquired Debt and all Indebtedness of others secured by a Lien on any asset of
the specified Person (whether or not such Indebtedness is assumed by such
Person, the amount of such Indebtedness being deemed to be the lesser of the
value of such property or asset or the amount of the Indebtedness so secured
and, to the extent not otherwise included, the Guarantee by such Person of any
Indebtedness of any other Person; provided that Indebtedness shall not include:

 

12

 

(x)            any amounts withheld by Holdings or any of
its Subsidiaries from the purchase price paid for the purchase of monitoring
accounts;

 

(y)           Indebtedness in respect of letters of credit
to support workers compensation obligations, performance bonds, bankers’
acceptances and surety or appeal bonds provided by Holdings or any of its
Subsidiaries to their customers in the ordinary course of the business; and

 

(z)            Indebtedness arising from agreements
providing for indemnification, adjustment of purchase price or similar
obligations, or from guarantees or letters of credit, surety bonds or
performance bonds securing any obligations of Holdings or any of its
Subsidiaries pursuant to such agreements, in each case incurred in connection
with the disposition of any business assets or Subsidiaries of Holdings (other
than guarantees of Indebtedness or other obligations incurred by any Person
acquiring all or any portion of such business assets or Subsidiaries of
Holdings for the purpose of financing such acquisition) in a principal amount
not to exceed the gross proceeds actually received by Holdings or any of its
Subsidiaries in connection with such disposition.

 

The amount of any Indebtedness outstanding as
of any date shall be:

 

1.             the accreted value thereof, in the case of
any Indebtedness issued with original issue discount; and

 

2.             the principal amount thereof, together
with any interest thereon that is more than 30 days past due, in the case of
any other Indebtedness.

 

“Insolvency”:  with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245
of ERISA.

 

“Insolvent”:  pertaining to a condition of Insolvency.

 

“Intellectual Property”:  the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or
in equity for any infringement or other impairment thereof, including the right
to receive all proceeds and damages therefrom.

 

“Interest Payment Date”:  as to any Loan, (a) each March 14
and September 14 to occur after the Closing Date while such Loan is
outstanding and the final maturity date of such Loan, and (b) the date of
any repayment or prepayment made in respect thereof.

 

“Investment”:  in any Person means any direct or indirect
advance, loan or other extension of credit (including, without limitation, by
way of Guarantee or similar arrangement; but excluding advances to customers or
suppliers in the ordinary course of business that are, in conformity with GAAP,
recorded as accounts receivable, prepaid expenses or deposits on the balance
sheet of Holdings or its Subsidiaries) or capital contribution to (by means of
any transfer 

 

13

 

of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, bonds, notes,
debentures or other similar instruments issued by, such Person and shall
include the retention of the Capital Stock (or any other Investment) by
Holdings or any of its Subsidiaries, of (or in) any Person that has ceased to
be a Subsidiary of Holdings. For purposes of Section 8.6, the amount of or
a reduction in an Investment shall be equal to the fair market value thereof at
the time such Investment is made or reduced.

 

“Lead Arrangers”:  as defined in the preamble to this Agreement.

 

“Lenders”:  as defined in the preamble to this Agreement;
provided, that unless the context otherwise requires, each reference
herein to the Lenders shall be deemed to include any Conduit Lender.

 

“Lien”:  with respect to any asset, any mortgage,
lien, pledge, charge, security interest or encumbrance of any kind in respect
of such asset, whether or not filed, recorded or otherwise perfected under
applicable law, including any conditional sale or other title retention
agreement, any lease in the nature thereof, any option or other agreement to
sell or give a security interest in and any filing of or agreement to give any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction.

 

“Loan”:  as defined in Section 2.1.

 

“Loan Documents”:  this Agreement, the Guarantee Agreement, the
Supplement and the Notes.

 

“Loan Parties”:  each Group Member that is a party to a Loan
Document.

 

“Make-Whole Premium”: with respect to
any Loan on any date of prepayment, repayment pursuant to Section 8.5, or
purchase pursuant to Section 4.13, the present value, as determined by the
Borrower and certified by a Responsible Officer to the Administrative Agent, of
all required interest payments due on such Loan from the date of prepayment,
repayment or purchase through and including the Make-Whole Termination Date
(excluding accrued but unpaid interest as of the date of prepayment, repayment
or purchase), assuming that all such interest accrues at the Prime Rate in
effect as of the first Business Day prior to the date of such prepayment,
repayment or purchase plus the Applicable Margin, discounted to the date of
prepayment, repayment or purchase at a rate equal to the Treasury Rate plus
0.50%.

 

“Make-Whole Termination Date”: the
first anniversary of the Closing Date.

 

“Material Adverse Effect”:  a material adverse effect on (a) the
business, assets, property, financial condition or results of operations of
Holdings and its Subsidiaries taken as a whole, (b) the validity or
enforceability of the Loan Documents or the rights or remedies of the Agents or
the Lenders hereunder or thereunder or (c) the ability of the Loan Parties
to perform their obligations under the Loan Documents.

 

14

 

“Materials of Environmental Concern”:  any gasoline or petroleum (including crude
oil or any fraction thereof) or petroleum products or any hazardous or toxic
substances, materials or wastes as such are defined or otherwise regulated in
or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.

 

“Maturity Date”: March 14, 2013.

 

“Multiemployer Plan”:  a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.

 

“Net Proceeds”: (a) with respect
to any Asset Sale, the proceeds of such Asset Sale in the form of cash or cash
equivalents, including payments in respect of deferred payment obligations (to
the extent corresponding to the principal, but not interest, component thereof)
when received in the form of cash or cash equivalents and proceeds from the
conversion of other property received when converted to cash or cash
equivalents, net of (i) brokerage commissions and other fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes (whether or not such taxes will
actually be paid or are payable) as a result of such Asset Sale without regard
to the consolidated results of operations of Holdings and its Subsidiaries,
taken as a whole, (iii) payments made to repay debt or any other
obligation outstanding at the time of such Asset Sale that either (A) is
secured by a Lien on the property or assets sold or (B) is required to be
paid as a result of such sale and (iv) appropriate amounts to be provided
by Holdings or any of its Subsidiaries as a reserve against any liabilities
associated with such Asset Sale, including, without limitation, pension and
other post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations associated with
such Asset Sale, all as determined in conformity with GAAP and (b) with
respect to any issuance or sale of Capital Stock, the proceeds of such issuance
or sale in the form of cash or cash equivalents, including payments in respect
of deferred payment obligations (to the extent corresponding to the principal,
but not interest, component thereof) when received in the form of cash or cash
equivalents and proceeds from the conversion of other property received when
converted to cash or cash equivalents, net of attorney’s fees, accountants’
fees, underwriters’ or placement agents’ fees, discounts or commissions and
brokerage, consultant and other fees incurred in connection with such issuance
or sale and net of taxes paid or payable as a result thereof.

 

“Non-Excluded Taxes”:  as defined in Section 4.10(a).

 

“Non-Ownership Affiliates of Holdings”:
Affiliates of Holdings that are deemed to be Affiliates of Holdings solely
pursuant to clause (b) of the second sentence of the definition of the
term “Affiliate” set forth in this Agreement.

 

“Non-U.S. Lender”:  as defined in Section 4.10(d).

 

“Notes”:  the collective reference to any promissory
note evidencing Loans.

 

“Obligations”:  the unpaid principal of and interest on
(including interest accruing after the maturity of the Loans and interest
accruing after the filing of any petition in bankruptcy, 

 

15

 

or the commencement of any
insolvency, reorganization or like proceeding, relating to the Borrower,
whether or not a claim for post-filing or post-petition interest is allowed in
such proceeding) the Loans and all other obligations and liabilities of the
Borrower to any Agent or to any Lender, whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred, which
may arise under, out of, or in connection with, this Agreement, any other Loan
Document or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges
and disbursements of counsel to any Agent or to any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.

 

“Offer Amount”: as defined in Section 4.16(a).

 

“Offer Period”: as defined in Section 4.16(a).

 

“Officer”: the chief executive
officer, the chief financial officer or any executive vice president of the
Borrower.

 

“Officer’s Certificate”: a certificate
signed by two Officers of the Borrower, at least one of whom shall be the chief
executive officer or chief financial officer of the Borrower, and delivered to
the Administrative Agent.

 

“Other Taxes”:  any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

 

“Participant”:  as defined in Section 11.6(b).

 

“Patriot Act”:  as defined in Section 11.19.

 

“PBGC”:  the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (or any successor).

 

“Permitted Business”: any business
conducted by Holdings and its Subsidiaries on the date hereof and other
businesses reasonably related, ancillary or complementary thereto, as
determined in good faith by Holdings’ board of directors.

 

“Permitted Liens”: the collective
reference to:

 

1.             Liens securing the Obligations;

 

2.             Liens in favor of Holdings or any of its
Wholly Owned Subsidiaries;

 

3.             Liens on property of a Person existing at
the time such Person is merged into or consolidated with Holdings or any
Subsidiary of Holdings or at the time such Person becomes a Subsidiary of
Holdings, provided that such Liens were in existence prior to the

 

16

 

contemplation of such
transaction and do not extend to any assets other than those of the Person
merged into or consolidated with Holdings or the Subsidiary of Holdings;

 

4.             Liens on property existing at the time of
acquisition thereof by Holdings or any Subsidiary of Holdings, provided that
such Liens were in existence prior to the contemplation of such acquisition;

 

5.             Liens securing Indebtedness under the
Existing Credit Agreement;

 

6.             Liens existing on the date of this
Agreement that are listed on Schedule 1.1(b);

 

7.             Liens securing Indebtedness represented by
Capital Lease Obligations, mortgage financings or purchase money obligations,
in each case incurred for the purpose of financing all or any part of the
purchase price or cost of construction or improvement of property or assets
used in Holdings’ or any Subsidiary of Holdings’ business or incurred to
refinance any such purchase price or cost of construction or improvement, in
each case incurred no later than 365 days after the date of such acquisition or
the date of completion of such construction or improvement; provided that the
principal amount of any Indebtedness described in this clause (7) shall
not exceed $15,000,000 at any time outstanding;

 

8.             Liens for property taxes, assessments and
other governmental charges or levies not yet delinquent or subject to penalties
for nonpayment or which are being contested in good faith by appropriate proceedings;

 

9.             Liens resulting from the deposit of funds
or evidences of Indebtedness in trust for the purpose of defeasing Indebtedness
of Holdings or any of its Subsidiaries;

 

10.           Liens imposed by law, such as carriers’,
warehousemen’s and mechanics’ Liens and other similar Liens, on the assets of
Holdings or any of its Subsidiaries arising in the ordinary course of business
and securing payment of obligations that are not more than 60 days past due or
are being contested in good faith by appropriate proceedings;

 

11.           pledges or deposits by Holdings or any of
its Subsidiaries under workmen’s compensation laws, unemployment insurance laws
or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which Holdings or any of its Subsidiaries is a party, or deposits to secure
public or statutory obligations of Holdings or any of its Subsidiaries, or
deposits for the payment of rent, in each case incurred in the ordinary course of
business;

 

12.           Liens on the assets of Holdings or any of
its Subsidiaries to secure any Permitted Refinancing Indebtedness, in whole or
in part, of any Indebtedness secured by Liens; provided, however, that any such
Lien shall be limited to the same assets that secured the original
Indebtedness;

 

17

 

13.           any interest or title of a lessor, licensor
or sublicensor under any lease, license or sublicense entered into by Holdings
or any of its Subsidiaries in the ordinary course of business;

 

14.           Liens securing the Existing Secured Notes;
and

 

15.           additional Liens securing Indebtedness in an
aggregate amount of not more than $5,000,000 at any time outstanding.

 

“Permitted Refinancing Disqualified Stock”:
any Disqualified Stock of Holdings or any of its Subsidiaries issued in
exchange for or the net proceeds of which are used to repurchase or redeem
other Disqualified Stock of Holdings or such Subsidiary (other than
intercompany Disqualified Stock); provided that:

 

1.             the liquidation preference of such
Permitted Refinancing Disqualified Stock does not exceed the liquidation value,
plus premiums, penalties and accrued dividends on, the Disqualified Stock so
exchanged, repurchased or redeemed (plus the amount of reasonable expenses
incurred in connection therewith);

 

2.             such Permitted Refinancing Disqualified
Stock has a redemption date no earlier than the redemption date of the
Disqualified Stock being exchanged, repurchased or redeemed; and

 

3.             such Permitted Refinancing Disqualified
Stock is issued either by Holdings or by the Subsidiary of Holdings that issued
the Disqualified Stock being exchanged, repurchased or redeemed.

 

“Permitted Refinancing Indebtedness”:
any Indebtedness of Holdings or any of its Subsidiaries issued in exchange for,
or the net proceeds of which are used to extend, refinance, renew, replace,
defease or refund other Indebtedness of Holdings or such Subsidiary (other than
intercompany Indebtedness); provided that:

 

1.             the principal amount (or accreted value,
if applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus premiums,
penalties and accrued interest on, the Indebtedness so extended, refinanced,
renewed, replaced, defeased or refunded (plus the amount of reasonable expenses
incurred in connection therewith);

 

2              such Permitted Refinancing Indebtedness
has a final maturity date no earlier than the final maturity date, and a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity, of the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded;

 

3.             if
the Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is (i) pari passu in right of payment to the Obligations, such
Permitted Refinancing Indebtedness is pari passu with or subordinated in right
of payment to the Obligations, (ii) subordinated in right of payment to
the Obligations, such Permitted Refinancing 

 

18

 

Indebtedness is subordinated in
right of payment to the Obligations, in each case on terms at least as
favorable to the Lenders as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, and (iii) secured, the liens securing such Permitted Refinancing
Indebtedness do not extend to any assets other than those securing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
(notwithstanding the foregoing, the Existing Secured Notes and any Permitted
Refinancing Indebtedness in respect thereof may be refinanced with a senior
secured facility which provides for a first priority lien (or other priority)
on all of the assets of the Loan Parties); and

 

4.             such Indebtedness is incurred either by
Holdings or by the Subsidiary of Holdings that is the obligor on the
Indebtedness be extended, refinanced, renewed, replaced, defeased or refunded.

 

“Person”:  an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.

 

“Plan”:  at a particular time, any employee benefit
plan that is covered by ERISA and in respect of which the Borrower or a
Commonly Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.

 

“Preferred Stock”: of any Person means
any Capital Stock of such Person that has preferential rights to any other
Capital Stock of such Person with respect to dividends or redemptions or upon
liquidation.

 

“Prime Rate”:  for any day, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the rate of interest
quoted in The Wall Street Journal, Money Rates Section as the Prime Rate
(currently defined as the base rate on corporate loans posted by at least 75%
of the nation’s thirty (30) largest banks) (or, if The Wall Street Journal
ceases quoting a base rate of the type described, the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve statistical
release H.15 (519) entitled “Selected Interest Rates” as the Bank prime loan
rate or its equivalent), as in effect from time to time.  The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer.  The Administrative Agent or
any other Lender may make commercial loans or other loans at rates of interest
at, above or below the Prime Rate.  The
Prime Rate shall be adjusted automatically with each change thereof without any
notice to any Group Member or any other Person.

 

“Pro Forma Balance Sheet”:  as defined in Section 5.1(a).

 

“Properties”:  as defined in Section 5.17(a).

 

“Property”:  any right or interest in or to property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including Capital Stock.

 

19

 

“Qualified Capital Stock”: any Capital
Stock that is not Disqualified Stock.

 

“Refinanced Indebtedness”:  the Existing Senior Subordinated Notes.

 

“Refinanced Loans”: as defined in Section 11.1.

 

“Refinancing”:  the repayment in full, with the proceeds of
the Loans, of the Refinanced Indebtedness.

 

“Register”:  as defined in Section 11.6(b).

 

“Regulation U”:  Regulation U of the Board as in effect from
time to time.

 

“Related Party”: with respect to the
Sponsor, (a) any controlling stockholder or 80% (or more) owned Subsidiary
of the Sponsor or (b) any trust, corporation, partnership or other entity,
the beneficiaries, stockholders, partners, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of the Sponsor
and/or such other Persons referred to in the immediately preceding clause (a).

 

“Reorganization”:  with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.

 

“Repayment Date”: as defined in Section 4.16(a).

 

“Repayment Offer”: as defined in Section 4.16.

 

“Replacement Loans”: as defined in Section 11.1.

 

“Reportable Event”:  any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under applicable regulations or any successor thereto.

 

“Required Lenders”:  at any time, the holders of more than 50% of
the aggregate unpaid principal amount of the Loans then outstanding; provided,
that for purposes of tabulating any consent of the Required Lenders, (a) if
the Highfields Entities hold or beneficially own Loans in an aggregate unpaid
principal amount of $25,000,000 or more, such consent shall be tabulated by
excluding all Loans held or beneficially owned by Affiliates (as of the date of
the request for the consent of the Required Lenders) of Holdings (other than
Non-Ownership Affiliates of Holdings) if and for so long as such Loans are held
or beneficially owned by Persons deemed to be Affiliates of Holdings (other
than Non-Ownership Affiliates of Holdings) or (b) if the Highfields
Entities hold or beneficially own Loans in an aggregate unpaid principal amount
of less than $25,000,000, such consent shall be tabulated by (i) if the
aggregate unpaid principal amount of Loans held or beneficially owned by all
Affiliates of Holdings (other than Non-Ownership Affiliates of Holdings) does
not exceed 49% of the aggregate unpaid principal amount of all outstanding
Loans, including all Loans held or beneficially owned by such Affiliates of
Holdings or (ii) if the aggregate unpaid principal amount of Loans held or
beneficially owned by all Affiliates of Holdings (other than Non-Ownership
Affiliates of 

 

20

 

Holdings) exceeds 49% of the
aggregate unpaid principal amount of all outstanding Loans, including all Loans
held or beneficially owned by such Affiliates of Holdings but, for purposes
solely of this definition, (A) ratably reducing the Loans held or
beneficially owned by Affiliates of Holdings (other than Non-Ownership
Affiliates of Holdings) so as to equal, in the aggregate, 49% of the aggregate
unpaid principal amount of all outstanding Loans and (B) ratably
increasing the Loans held or beneficially owned by Lenders other than
Affiliates of Holdings who are not Non-Ownership Affiliates of Holdings so as
to equal, in the aggregate, 51% of the aggregate unpaid principal amount of all
outstanding Loans.

 

“Requirement of Law”:  as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of
an arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.

 

“Responsible Officer”:  the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.

 

“Restricted Payments”:  (i) the declaration or payment of any
dividend or the making of any other distribution (other than dividends or
distributions payable in Qualified Capital Stock or in options, rights or
warrants to acquire Qualified Capital Stock or dividends or distributions by a
Subsidiary of Holdings so long as in the case of any dividend or distribution
payable on or in respect of any class or series of Capital Stock issued by a
Subsidiary other than a Wholly Owned Subsidiary, Holdings or any of its
Subsidiaries receives at least its pro rata share of such dividend or
distribution in accordance with its interest in such Capital Stock) on shares
of the Holdings’ Capital Stock, (ii) the purchase, redemption, retirement
or other acquisition for value of any Capital Stock of Holdings, or any
warrants, rights or options to acquire shares of Capital Stock of Holdings,
other than through the exchange of such Capital Stock or any warrants, rights
or options to acquire shares of any class of such Capital Stock for Qualified
Capital Stock or warrants, rights or options to acquire Qualified Capital
Stock, (iii) the voluntary or optional principal payment, or voluntary or
optional redemption, repurchase, defeasance or other acquisition or retirement
for value of Indebtedness of Holdings, the Borrower or any Subsidiary Guarantor
that is subordinated in right of payment to the Obligations, and (iv) Investments
in Affiliates of Holdings that are not, directly or indirectly, controlled by
Holdings.

 

“SEC”: 
the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.

 

“Securities Act”: the Securities Act
of 1933, as amended from time to time.

 

“Senior Debt”: all Indebtedness of
Holdings or any Subsidiary Guarantor under the Existing Credit Agreement.

 

21

 

“Single Employer Plan”:  any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.

 

“Solvent”:  with respect to any Person, as of any date of
determination, (a) the amount of the “present fair saleable value” of the
assets of such Person will, as of such date, exceed the amount of all “probable
liabilities of such Person, contingent or otherwise”, as of such date, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such
Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, (d) such Person will generally be able
to pay its debts as they mature.  For
purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”
means any (x) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right
to an equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured, and (e) such Person has not executed any Loan
Documents with actual intent to hinder, delay or defraud either present or
future creditors; provided, that in computing the amount of any
contingent, unliquidated, unmatured or disputed claim at any time, it is
intended that such claims will be computed at the amount which, in light of all
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual, liquidated or matured claim.

 

“Sponsor”:  Quadrangle Capital Partners  LP, Quadrangle Capital Partners-A LP,
Quadrangle Select Partners LP, any other Persons managed  by Quadrangle GP Investors, LLC, Monarch
Master Funding, Ltd. (formerly known as Quadrangle Master Funding Ltd), any
other Persons managed by Monarch Alternative Capital LP (formerly known as
Quadrangle Debt Recovery Advisors LLC) and their respective Affiliates.

 

“Subsidiary”:  as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening of
a contingency) to elect a majority of the board of directors or other managers
of such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person.  Unless otherwise qualified, all references to
a “Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a
Subsidiary or Subsidiaries of Holdings.

 

“Subsidiary Guarantor”:  each Domestic Subsidiary of Holdings other
than the Borrower.

 

“Supplement”:  as defined in Section 6.1(p).

 

22

 

“Syndication Agent”:  as defined in the preamble to this Agreement.

 

“Transferee”:  any Assignee or Participant.

 

“Treasury Rate”: as of any prepayment
date, the yield to maturity as of such prepayment date of United States Treasury
securities with a constant maturity (as compiled and published in the most
recent Federal Reserve Statistical Release H.15 (519) that has become publicly
available at least two Business Days prior to the prepayment date (or, if such
Statistical Release is no longer published, any publicly available source of
similar market data)) most nearly equal to the period from the prepayment date
to the Make-Whole Termination Date; provided, however, that if
the period from the prepayment date to the Make-Whole Termination Date is less
than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

 

“United States”:  the United States of America.

 

“Voting Stock”:  with respect to any specified Person (a) any
class or classes of Equity Interests of the specified Person pursuant to which
the holders thereof have the general voting power under ordinary circumstances
to elect at least a majority of the board of directors, partners, managers or
trustees of the specified Person (irrespective of whether or not, at the time,
stock of any other class or classes have, or might have, voting power by reason
of the happening of any contingency) that control the management and policies
of such Person, and (b) if such specified Person is a limited partnership,
includes the general partner and limited partner interests of such Person.

 

“Weighted Average Life to Maturity”:
means, when applied to any Indebtedness at any date, the number of years obtained
by dividing:

 

1.             the sum of the products obtained by
multiplying (a) the amount of each then remaining installment, sinking
fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (b) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment; by

 

2.             the then outstanding principal amount of
such Indebtedness.

 

“Wholly Owned Subsidiary”:  as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

 

“Wholly Owned Subsidiary Guarantor”:  any Subsidiary Guarantor that is a Wholly Owned
Subsidiary of Holdings.

 

1.2.          Other Definitional
Provisions.   (a)  Unless
otherwise specified therein, all terms defined in this Agreement shall have the
defined meanings when used in the other Loan Documents or any certificate or
other document made or delivered pursuant hereto or thereto.

 

23

 

(b)   As used herein and in the other
Loan Documents, and any certificate or other document made or delivered
pursuant hereto or thereto, (i) accounting terms relating to any Group
Member not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP, (ii) the words “include”, “includes” and “including” shall be
deemed to be followed by the phrase “without limitation”, (iii) the word “incur”
shall be construed to mean incur, create, issue, assume, become liable in
respect of or suffer to exist (and the words “incurred” and “incurrence” shall
have correlative meanings), (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights, and (v) references
to agreements or other Contractual Obligations shall, unless otherwise
specified, be deemed to refer to such agreements or Contractual Obligations as
amended, supplemented, restated or otherwise modified from time to time
(subject to any applicable restrictions hereunder).

 

(c)   The words “hereof”, “herein”
and “hereunder” and words of similar import when used in this Agreement shall
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.

 

(d)   The meanings given to terms
defined herein shall be equally applicable to both the singular and plural
forms of such terms.

 

(e)   The expressions, “payment in
full,” “paid in full” and any other similar terms or phrases when used herein
with respect to the Obligations shall mean the payment in full, in immediately
available funds, of all the Obligations.

 

SECTION 2.  AMOUNT AND TERMS OF COMMITMENTS

 

2.1.          Commitments.  Subject to the terms and conditions hereof,
each Lender severally agrees to make a term loan (a “Loan”) to the
Borrower on the Closing Date in an amount not to exceed the amount of the
Commitment of such Lender.

 

2.2.          Procedure for
Borrowing.  The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, one
Business Day prior to the anticipated Closing Date) requesting that the Lenders
make the Loans on the Closing Date and specifying the amount to be
borrowed.  Upon receipt of such notice
the Administrative Agent shall promptly notify each Lender thereof.  Not later than 12:00 Noon, New York City
time, on the Closing Date each Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds (except as set forth in Section 2.1(b)) equal to the Loan or Loans
to be made by such Lender.  The
Administrative Agent shall credit the account of the Borrower on the books of
such office of the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Lenders in immediately available
funds.

 

24

 

2.3.          Repayment of Loans;
Payment of Fees.   (a)  The Borrower shall repay all outstanding Loans
on the Maturity Date.

 

(b)   The Borrower agrees to pay to
the Administrative Agent the fees in the amounts and on the dates previously
agreed to in writing by the Borrower and the Administrative Agent.

 

SECTION 3.  [RESERVED]

 

SECTION 4.  GENERAL PROVISIONS APPLICABLE 

TO LOANS

 

4.1.          Optional Prepayments.  The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium (except as specified
in the last sentence of this Section) or penalty, upon irrevocable notice
delivered to the Administrative Agent no later than 2:00 P.M., New York
City time, one Business Day prior thereto, which notice shall specify the date
and amount of prepayment.  Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.  If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with accrued interest to such date on the amount
prepaid.  Partial prepayments of Loans
shall be in an aggregate principal amount of $5,000,000 or multiples of
$1,000,000 in excess thereof, and such partial prepayments shall be made only
on the last Business Day of any month. 
In the event that any Loans are prepaid pursuant to this Section 4.1
at any time prior to the first anniversary of the Closing Date, the Borrower
shall pay the Lenders, in addition to the principal amount of, and accrued but
unpaid interest on, such prepaid Loans, an amount equal to the Make-Whole
Premium.

 

4.2.          [Reserved.]

 

4.3.          [Reserved.]

 

4.4.          [Reserved.]

 

4.5.          Interest Rates and
Payment Dates.   (a)  Each Loan
shall bear interest at a rate per annum equal to the Prime Rate plus the
Applicable Margin.

 

(b)   If all or a portion of the
principal amount of any Loan, or all or a portion of any interest payable on
any Loan or any fee payable hereunder, shall not be paid when due (whether at
the stated maturity, by acceleration or otherwise), such overdue amount shall
bear interest at a rate per annum equal to the rate then applicable to Loans plus
2%, in each case, from the date of such non-payment until such amount is paid
in full (after as well as before judgment).

 

(c)   Interest shall be payable in arrears
on each Interest Payment Date, provided that interest accruing pursuant
to paragraph (b) of this Section shall be payable from time to time
on demand.

 

25

 

4.6.          Computation of
Interest and Fees.   (a)  Fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, and the interest on Loans hereunder shall be
calculated on the basis of a 365- (or 366-, as the case may be) day year for
the actual days elapsed.  Any change in
the interest rate on a Loan resulting from a change in the Prime Rate shall
become effective as of the opening of business on the day on which such change
becomes effective.  The Administrative
Agent shall as soon as practicable notify the Borrower and the relevant Lenders
of the effective date and the amount of each such change in interest rate.

 

(b)   Each determination of an
interest rate by the Administrative Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Borrower and the Lenders in
the absence of manifest error.

 

4.7.          [Reserved.]

 

4.8.          Pro Rata Treatment
and Payments. (a)  [Reserved.]

 

(b)   Each payment to the Lenders
under the Loan Documents, including without limitation each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Loans shall be made pro  rata according to the respective
outstanding principal amounts of the Loans then held by the Lenders.  Amounts prepaid on account of the Loans may
not be reborrowed.  Payments made to the
Administrative Agent of any amounts owing to the Lenders under the Loan
Documents shall at all times be held by the Administrative Agent as agent for
the benefit of the respective Lenders in a segregated account and shall be paid
to the respective Lenders as soon as reasonably practicable.

 

(c)   [Reserved.]

 

(d)   All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 2:00 P.M., New York City time, on
the due date thereof to the Administrative Agent, for the account of the
Lenders, at the Funding Office, in Dollars and in immediately available
funds.  The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received.  If any payment hereunder
becomes due and payable on a day other than a Business Day, such payment shall
be extended to the next succeeding Business Day.  In the case of any extension of any payment
of principal pursuant to the preceding sentence, interest thereon shall be
payable at the then applicable rate during such extension.

 

(e)   Unless the Administrative Agent
shall have been notified in writing by any Lender prior to a borrowing that
such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may
assume that such Lender is making such amount available to the Administrative
Agent, and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount.  If such amount is not made available to the
Administrative Agent by the required time on the Closing Date, such Lender shall
pay to the Administrative Agent, on 

 

26

 

demand, such amount with interest thereon at
a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry
rules on interbank compensation for the period until such Lender makes
such amount immediately available to the Administrative Agent.  A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error.  If such Lender’s share of such borrowing is
not made available to the Administrative Agent by such Lender within three
Business Days of the Closing Date, the Administrative Agent shall also be
entitled to recover such amount with interest thereon at the rate per annum
applicable to Loans, on demand, from the Borrower.

 

(f)    Unless the Administrative
Agent shall have been notified in writing by the Borrower prior to the date of
any payment due to be made by the Borrower hereunder that the Borrower will not
make such payment to the Administrative Agent, the Administrative Agent may
assume that the Borrower is making such payment, and the Administrative Agent
may, but shall not be required to, in reliance upon such assumption, make
available to the Lenders their respective pro  rata shares of a
corresponding amount.  If such payment is
not made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate.  Nothing herein shall be deemed to limit the
rights of the Administrative Agent or any Lender against the Borrower.

 

4.9.          Requirements
of Law.  (a)  If any Lender
shall have determined that the adoption of or any change in any Requirement of
Law regarding capital adequacy or in the interpretation or application thereof
or compliance by such Lender or any Person controlling such Lender with any
request or directive regarding capital adequacy (whether or not having the force
of law) from any Governmental Authority made subsequent to the date hereof
shall have the effect of reducing the rate of return on such Lender’s or such
Person’s capital as a consequence of its obligations hereunder to a level below
that which such Lender or such Person could have achieved but for such
adoption, change or compliance (taking into consideration such Lender’s or such
Person’s policies with respect to capital adequacy) by an amount reasonably
deemed by such Lender to be material, then from time to time, within ten
Business Days after submission by such Lender to the Borrower (with a copy to
the Administrative Agent) of a written request therefor setting forth such
amount in reasonable detail, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender or such corporation for such
reduction.

 

(b)   A certificate as to any
additional amounts payable pursuant to this Section submitted by any
Lender to the Borrower (with a copy to the Administrative Agent) shall be
conclusive in the absence of manifest error. 
The obligations of the Borrower pursuant to this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

4.10.        Taxes.   (a)  All payments made by or on behalf
of the Borrower under this Agreement or any other Loan Document shall be made
free and clear of, and without deduction

 

27

 

or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding net
income taxes, branch profit taxes imposed by the United States and franchise
taxes (imposed in lieu of net income taxes) imposed on any Agent or any Lender
as a result of a present or former connection between such Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such Agent or such Lender having executed,
delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document).  If any such non-excluded taxes, levies,
imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded
Taxes”) or Other Taxes are required to be withheld from any amounts payable
to any Agent or any Lender hereunder, the amounts so payable to such Agent or
such Lender shall be increased to the extent necessary to yield to such Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement, provided, however, that the
Borrower shall not be required to increase any such amounts payable to any
Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (e) or (f) of
this Section or (ii) that are United States withholding taxes imposed
on amounts payable to such Lender at the time such Lender becomes a party to
this Agreement, except to the extent that such Lender’s assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to this
paragraph.  The Borrower shall make (or
cause to be made) any required deduction or withholding and pay (or cause to be
paid) the full amount deducted or withheld to the relevant Governmental
Authority in accordance with applicable law.

 

(b)   In addition, the Borrower shall
pay any Other Taxes to the relevant Governmental Authority in accordance with
applicable law.

 

(c)   Whenever any Non-Excluded Taxes
or Other Taxes are payable by the Borrower, as promptly as possible thereafter
the Borrower shall send to the Administrative Agent for its own account or for
the account of the relevant Agent or Lender, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof.  If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts
or other required documentary evidence, the Borrower shall indemnify the Agents
and the Lenders for any incremental taxes, interest or penalties that may
become payable by any Agent or any Lender as a result of any such failure.

 

(d)   The Borrower shall indemnify
the Administrative Agent and any Lender for the full amount of Non-Excluded
Taxes (to the extent the Borrower would be required to pay additional amounts
with respect to such Non-Excluded Taxes pursuant to Section 4.10(a)) or
Other Taxes arising in connection with payments made under this Agreement
(including, without limitation, any Non-Excluded Taxes or Other Taxes imposed
by any jurisdiction on amounts payable under this Section 4.10) or any
other Loan Document paid by such Agent or Lender or any of their respective
Affiliates and any liability (including penalties, additions to tax, interest 

 

28

 

and expenses) arising therefrom or with
respect thereto, whether or not such Non-Excluded Taxes or Other Taxes were
correctly or legally asserted.  Payment
under this indemnification shall be made within ten days from the date the
Administrative Agent or any Lender or any of their respective Affiliates makes
written demand therefor.  If any Lender
becomes entitled to claim any indemnification amounts pursuant to this
paragraph, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so
entitled.

 

(e)   Each Lender (or Transferee)
that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code
(a “Non-U.S. Lender”) shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form W-8BEN and/or Form W-8 IMY, as
applicable (claiming benefits of an applicable tax treaty) or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with
respect to payments of “portfolio interest”, a statement substantially in the
form of Exhibit D and a Form W-8BEN, or in each case any subsequent
versions thereof or successors thereto, properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement (or, in the case of any Participant,
on or before the date such Participant purchases the related
participation).  In addition, each Non-U.S.
Lender shall deliver such forms promptly upon the obsolescence or invalidity of
any form previously delivered by such Non-U.S. Lender including, but not
limited to, as a result of any change in applicable law, regulation or treaty,
or in any official application or interpretation thereof.  Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).  Notwithstanding any other provision of this
paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant
to this paragraph that such Non-U.S. Lender is not legally able to deliver.

 

(f)    A Lender that is entitled to
an exemption from or reduction of non-U.S. withholding tax under the law of the
jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall
deliver to the Borrower (with a copy to the Administrative Agent), at the time
or times prescribed by applicable law and as reasonably requested in writing by
the Borrower, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or
at a reduced rate, provided that such Lender is legally entitled to
complete, execute and deliver such documentation and in such Lender’s judgment
such completion, execution or submission would not materially prejudice the
legal position of such Lender.

 

(g)   If any Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by the Borrower or with respect to
which the Borrower has paid additional amounts pursuant to this Section 4.10,
it shall pay over such refund to the Borrower (but only to the extent 

 

29

 

of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 4.10 with
respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund),
net of all out-of-pocket expenses of such Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the
request of such Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to such Agent or such Lender in the event such
Agent or such Lender is required to repay such refund to such Governmental
Authority.  This paragraph shall not be
construed to require any Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.

 

(h)   For purposes of this Section 4.10,
in the case of any Lender that is treated as a partnership for U.S. federal
income tax purposes, any Non-Excluded Taxes or Other Taxes required to be
deducted and withheld by such Lender with respect to payments made by the
Borrower under any Loan Document shall be treated as Non-Excluded Taxes or
Other Taxes required to be deducted by the Borrower, but only to the extent
such Non-Excluded Taxes or Other Taxes would have been required to be deducted
and withheld by the Lender if the Lender were treated as a corporation for U.S.
federal income tax purposes making such payments under the Loan Documents on
behalf of the Borrower.

 

(i)    The agreements in this Section shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.

 

4.11.        [Reserved.]

 

4.12.        Change of Lending
Office.  Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of Section 4.9
or 4.10 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the reasonable judgment of such Lender,
cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and provided, further, that nothing in this Section shall
affect or postpone any of the obligations of the Borrower or the rights of any
Lender pursuant to Section 4.9 or 4.10.

 

4.13.        Replacement of Lenders.  The Borrower shall be permitted to replace
any Lender that (a) requests reimbursement for amounts owing pursuant to Section 4.9
or 4.10 or (b) declines to deliver any required consent to a proposed
waiver or modification of any provision of the Loan Documents as contemplated
by Section 11.1 that has been consented to by the Borrower, Administrative
Agent and Required Lenders, with a replacement financial institution (which
replacement institution in the case of clause (b) is willing to deliver
such consent); provided that (i) such replacement does not conflict with
any Requirement of Law, (ii) no Default or Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to
any such replacement, such Lender shall have taken no action under Section 4.12
so as to eliminate the continued need for payment of amounts owing pursuant to 

 

30

 

Section 4.9
or 4.10, (iv) the replacement financial institution shall purchase, at
par, all Loans and other amounts (other than the Make-Whole Premium) owing to
such replaced Lender on or prior to the date of replacement, (v) the
replacement financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vi) the replaced Lender shall
be obligated to make such replacement in accordance with the provisions of Section 11.6
(provided that the Borrower shall be obligated to pay the registration and
processing fee referred to therein), (vii) until such time as such
replacement shall be consummated, the Borrower shall pay all additional amounts
(if any) required pursuant to Section 4.9 or 4.10, as the case may be, (viii) if
such replacement occurs on or prior to the first anniversary of the Closing
Date, the Borrower shall pay to the replaced Lender an amount equal to the
Make-Whole Premium owing to such replaced Lender, and (ix) any such
replacement shall not be deemed to be a waiver of any rights that the Borrower,
the Administrative Agent or any other Lender shall have against the replaced
Lender.

 

4.14.        Evidence of Debt.   (a)  Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
Indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.

 

(b)   The Administrative Agent, on
behalf of the Borrower, shall maintain the Register pursuant to Section 11.6(b),
and a subaccount therein for each Lender, in which shall be recorded (i) the
amount of each Loan made hereunder and any Note evidencing such Loan, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the Borrower to each Lender hereunder and (iii) both the
amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender’s share thereof.

 

(c)   The entries made in the
Register and the accounts of each Lender maintained pursuant to Section 4.14(a) shall,
to the extent permitted by applicable law, be prima  facie
evidence of the existence and amounts of the obligations of the Borrower
therein recorded; provided, however, that the failure of any
Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Loans made to the Borrower
by such Lender in accordance with the terms of this Agreement.

 

(d)   The Borrower agrees that, upon
the request to the Administrative Agent by any Lender, the Borrower will
execute and deliver to such Lender a promissory note of the Borrower evidencing
any Loans of such Lender, substantially in the form of Exhibit E, with
appropriate insertions as to date and principal amount.

 

4.15.        [Reserved.]

 

4.16.        Repayment Offers.  In the event that, pursuant to Sections 4.17
or 8.5  hereof, the Borrower shall be
required to commence an offer to all Lenders to repay their respective Loans (a
“Repayment Offer”), it shall follow the procedures specified in such
Sections and, to the extent not inconsistent therewith, the procedures
specified below.

 

31

 

(a)           The Repayment Offer
shall remain open for a period of no less than 30 days and no more than 90 days
following its commencement (the “Offer Period”). No later than three
Business Days after the termination of the Offer Period (the “Repayment Date”),
the Borrower shall repay the principal amount of Loans required to be repaid
pursuant to Section 4.17 or 8.5 (the “Offer Amount”) or, if less
than the Offer Amount has been validly accepted and not withdrawn, all Loans of
the Lenders that accept the Repayment Offer, plus accrued and unpaid interest.

 

(b)           Upon the commencement
of a Repayment Offer, the Borrower shall send a notice to the Administrative
Agent and each of the Lenders.  The
notice shall contain all instructions and matters necessary to enable such
Lenders to accept the Repayment Offer. 
The Repayment Offer shall be made to all Lenders.  The notice, which shall govern the terms of
the Repayment Offer, shall state:

 

(i)    that the
Repayment Offer is being made pursuant to this Section 4.16 and Section 4.17
or Section 8.5, and the length of time the Repayment Offer shall remain
open;

 

(ii)   the Offer Amount,
the purchase price and the Repayment Date;

 

(iii)  that
any Loan as to which such offer is not properly accepted shall continue to
accrue interest;

 

(iv)  that, unless the
Borrower defaults in making such payment, any Loan accepted for payment
pursuant to the Repayment Offer shall cease to accrue interest on and after the
Repayment Date;

 

(v)   that Lenders shall
be entitled to withdraw their election if the Borrower receives, not later than
the expiration of the Offer Period, a telegram, telex, facsimile transmission
or letter setting forth the name of the Lender, the principal amount of the
Loan the Lender agreed to have repaid and a statement that such Lender is
withdrawing any previous election to have such Loan repaid; and

 

(vi)  that, if the
aggregate amount of Loans that the Lenders agree to be repaid pursuant to any
Repayment Offer exceeds the Offer Amount, the Administrative Agent shall, subject
in the case of a Repayment Offer made pursuant to Section 4.17 or Section 8.5,
select the Loans to be repaid on a pro rata basis.

 

(c)           On the Repayment Date,
the Borrower shall, to the extent lawful, subject in the case of a Repayment
Offer made pursuant to Section 4.17 or Section 8.5, repay on a pro
rata basis to the extent necessary, the Offer Amount of Loans from Lenders
accepting the Repayment offer, or if less than the Offer Amount has been
accepted by the Lenders, all Loans from Lenders accepting the Repayment Offer.

 

4.17.        Mandatory Offer to
Repay Upon Change of Control.   (a)  Upon the occurrence of a Change of
Control, each Lender shall have the right to require the Borrower to repay such
Lender’s Loans pursuant to the offer described below (the “Change of Control

 

32

 

Offer”) at a price
in cash equal to (i) 101% of the aggregate principal amount thereof plus (ii) accrued
and unpaid interest thereon, to the date of repayment (the “Change of
Control Payment”).  Within ten days
following any Change of Control, the Borrower shall send a notice to
Administrative Agent and each Lender describing the transaction or transactions
that constitute the Change of Control and offering to repay the Loans on the date
specified in such notice, which date shall be no earlier than 30 days and no
later than 60 days from the date such notice is mailed (the “Change of
Control Payment Date”), pursuant to the procedures required by this
Agreement and described in such notice.

 

(b)   On the Change of Control
Payment Date, the Borrower shall, to the extent lawful, repay all Loans of
Lenders who accept the Change of Control Offer.

 

(c)   Prior to the giving of the
notice referred to in Section 4.17(a), but in any event within 30 days
following the date on which Holdings becomes aware that a Change of Control has
occurred, if the repayment of the Loans pursuant to this Section 4.17
would violate or constitute a default under any other Indebtedness of Holdings
or its Subsidiaries, Holdings shall, or shall cause its Subsidiaries, to the
extent needed to permit such repayment of Loans pursuant to this Section 4.17,
either (i) repay all such Indebtedness and terminate all commitments
outstanding thereunder or (ii) obtain the requisite consents, if any,
under such Indebtedness to permit the repayment of the Loans pursuant to this Section 4.17.
Holdings will first comply with the covenant in this Section 4.17(c) before
it will be required to cause the Borrower to make the Change of Control Offer
or repay the Loans pursuant to this Section 4.17(a).

 

(d)   Notwithstanding anything to the
contrary in this Section 4.17, the Borrower shall not be required to make
a Change of Control Offer upon a Change of Control if a third party makes the
Change of Control Offer in the manner, at the times and otherwise in compliance
with the requirements set forth in this Section 4.17 and all other
provisions of this Agreement applicable to a Change of Control Offer made by
the Borrower and repays all Loans as to which offers for prepayment have been
validly accepted and not withdrawn pursuant to the terms of such Change of
Control Offer.

 

SECTION 5.  REPRESENTATIONS AND WARRANTIES

 

To induce the Agents and the Lenders to enter
into this Agreement and to make the Loans, Holdings and the Borrower hereby
jointly and severally represent and warrant to each Agent and each Lender that:

 

5.1.          Financial Condition.   (a)  The unaudited pro forma
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at December 31,
2007 (including the notes thereto) (the “Pro Forma Balance Sheet”),
copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
Loans to be made on the Closing Date and the use of proceeds thereof and (ii) the
payment of premiums, fees and expenses in connection with the foregoing.  The Pro Forma Balance Sheet presents fairly
in all material respects on a pro forma basis the estimated financial  position of Holdings and its consolidated
Subsidiaries as at December 31, 2007, assuming that the events specified
in the preceding sentence had actually occurred at such date.

 

33

 

(b)   The audited consolidated balance
sheets of Holdings as at December 31, 2006, December 31, 2005 and December 31,
2004, and the related consolidated statements of income and of cash flows for
the fiscal years ended on such dates (including any related schedules and notes
thereto), reported on by and accompanied by a report from Deloitte &
Touche LLP, present fairly in all material respects the consolidated financial
condition of Holdings as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended.  All such financial statements,
including any related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as disclosed therein). As of the Closing Date, no Group Member has any
material obligations under Guarantees, contingent liabilities and liabilities
for taxes, or any long-term leases or unusual forward or long-term commitments,
including any interest rate or foreign currency swap or exchange transaction or
other obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph.  During the period from December 31, 2006
to and including the date hereof there has been no Disposition by Holdings or
any of its Subsidiaries of any material part of its business or property.

 

5.2.          No Change.  As of the Closing Date, since December 31,
2006, there has been no development, event or circumstance that, individually
or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect.

 

5.3.          Corporate Existence;
Compliance with Law.  Each Group
Member (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such
qualification except in jurisdictions where the failure to be so qualified or
in good standing could not reasonably be expected to have a Material Adverse
Effect and (d) is in compliance with all Requirements of Law except to the
extent that the failure to comply therewith could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

5.4.          Power; Authorization;
Enforceable Obligations.  Each Loan
Party has the power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is a party and, in the case of the
Borrower, to obtain extensions of credit hereunder.  Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the extensions of credit on the terms and conditions of this
Agreement.  No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the extensions of
credit hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except (i) consents,
authorizations, filings and notices described in Schedule 5.4, which consents,
authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) those consents, authorizations, filings and
notices the failure of which to make or obtain, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.  Each Loan Document has been duly
executed

 

34

 

and delivered on
behalf of each Loan Party thereto.  This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party thereto,
enforceable against each such Loan Party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).

 

5.5.          No Legal Bar.  The execution, delivery and performance of
this Agreement and the other Loan Documents, the borrowings hereunder and the
use of the proceeds thereof will not violate any Requirement of Law or any
material Contractual Obligation of any Group Member and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation.  No Requirement
of Law or Contractual Obligation (assuming no defaults thereunder) applicable
to any Subsidiary of Holdings could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

5.6.          Litigation.  No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Holdings or the Borrower, threatened by or against any Group
Member or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby or (b) that, if adversely determined or settled, could
reasonably be expected to have a Material Adverse Effect.

 

5.7.          No Default.   (a)  No Group Member is in default
under or with respect to any of its Contractual Obligations in any respect that
could, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.

 

(b)   No default or event of default
exists and is continuing under the Existing Credit Agreement or the Existing
Secured Notes.

 

5.8.          Ownership
of Property; Liens.  Each Group Member
has good and marketable title in fee simple to, or a valid leasehold interest
in, all its real property, including the Properties, and good title to, or a
valid leasehold interest in, all its other material property, and none of such
property is subject to any Lien except Permitted Liens.

 

5.9.          Intellectual Property.  Except as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, each Group
Member owns, or is licensed to use, all Intellectual Property necessary for the
conduct of its business as currently conducted. No material claim has been
asserted and is pending by any Person challenging or questioning the use of any
Intellectual Property or the validity or effectiveness of any Intellectual
Property, nor does Holdings or the Borrower know of any valid basis for any
such claim.  The use of Intellectual
Property by each Group Member does not infringe on the rights of any Person in
any material respect.

 

5.10.        Taxes.  Each Group Member has filed or caused to be
filed all Federal and State income tax returns and all other material tax
returns that are required to be filed and has

 

35

 

paid all taxes
shown to be due and payable on said returns or on any assessments made against
it or any of its Property and all other taxes, fees or other charges imposed on
it or any of its property by any Governmental Authority (other than (a) any
the amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Holdings or its Subsidiaries, as the
case may be or (b) if the failure to pay would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect).

 

5.11.        Federal Regulations.  No part of the proceeds of any Loans, and no
other extensions of credit hereunder, will be used for “buying” or “carrying”
any “margin stock” within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board.  If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred
to in Regulation U.

 

5.12.        Labor Matters.  Except as, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:  (a) there are no strikes or other labor
disputes against any Group Member pending or, to the knowledge of Holdings or
the Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of
employee health and welfare insurance have been paid or accrued as a liability
on the books of the relevant Group Member.

 

5.13.        ERISA.  Neither a Reportable Event nor an “accumulated
funding deficiency” (within the meaning of Section 412 of the Code or Section 302
of ERISA) has occurred during the five-year period prior to the date on which
this representation is made or deemed made with respect to any Single Employer
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code except where failure to do so would cause a
liability which would not be material. 
No termination of a Single Employer Plan has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period.  The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount.  Neither the Borrower nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding
the date on which this representation is made or deemed made.  To the knowledge of the Borrower after due
inquiry, no such Multiemployer Plan is in Reorganization or Insolvent.

 

36

 

5.14.        Investment Company Act; Other
Regulations.  No Loan Party is an “investment
company”, or a company “controlled” by an “investment company”, required to be
registered as such within the meaning of the Investment Company Act of 1940, as
amended.  No Loan Party is subject to
regulation under any Requirement of Law (other than Regulation X of the Board)
that limits its ability to incur Indebtedness.

 

5.15.        Subsidiaries.  Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a) Schedule
5.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options and other equity awards granted to employees or directors and
directors’ qualifying shares) of any nature relating to any Capital Stock of
the Borrower or any Subsidiary, except as created by the Loan Documents.

 

5.16.        Use of Proceeds.  The proceeds of the Loans shall be used to
repay in full the Refinanced Indebtedness and to pay related premiums, fees and
expenses.

 

5.17.        Environmental Matters.  Except as, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect:

 

(a)   the facilities and properties owned, leased
or operated by any Group Member (the “Properties”) do not contain, and
have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under circumstances that constitute or constituted
a violation of, or could give rise to liability under, any Environmental Law;

 

(b)   no Group Member has received or is aware of
any actual or threatened notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the business operated by any Group Member (the “Business”),
nor does Holdings or the Borrower have knowledge or reason to believe that any
such notice will be received or is being threatened;

 

(c)   no judicial proceeding or governmental or
administrative action is pending or, to the knowledge of Holdings and the
Borrower, threatened, under any Environmental Law to which any Group Member is
or will be named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business;

 

(d)   the Properties and all operations at the
Properties are in compliance, and have in the last five years been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the Business; and

 

37

 

(e)   no Group Member has assumed any liability of
any other Person under Environmental Laws.

 

5.18.        Accuracy of Information, etc.  No statement or information contained in this
Agreement, any other Loan Document, the Company Presentation or any other
document, certificate or statement (excluding any projections, proforma
financial information or estimates) furnished by or on behalf of any Loan Party
to the Administrative Agent or the Lenders, or any of them, for use in connection
with the transactions contemplated by this Agreement or the other Loan
Documents, taken as a whole, contained as of the date such statement,
information, document or certificate was so furnished (or, in the case of the
Company Presentation, as of the Closing Date), any untrue statement of a
material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading.  The projections and pro forma financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of the Borrower to be reasonable at the
time made, it being recognized by the Lenders that such financial information
as it relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information may
differ from the projected results set forth therein by a material amount.  As of the Closing Date, there is no fact
known to any Loan Party that could, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Company
Presentation or in any other documents, certificates and statements furnished
to the Administrative Agent and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.

 

5.19.        Solvency.  The Loan Parties are, on a consolidated
basis, and after giving effect to the incurrence of all Indebtedness and
obligations being incurred in connection herewith will be and will continue to
be, Solvent.

 

SECTION 6.  CONDITIONS PRECEDENT

 

6.1.          Conditions to Closing Date.  The agreement of each Lender to make the
extension of credit requested to be made by it is subject to the satisfaction
or waiver (in accordance with Section 11.1), prior to or concurrently with
the making of such extension of credit on the Closing Date, of the following
conditions precedent:

 

(a)   Loan Documents.  All legal matters incident to this Agreement
and the other Loan Documents shall be satisfactory to the Lenders and to the
Administrative Agent, and the Administrative Agent shall have received (i) this
Agreement, or, in the case of the Lenders, an Addendum, executed and delivered
by each Agent, Holdings, the Borrower and each Person that is a Lender on the
Closing Date and (ii) an executed counterpart of each other Loan Document
required to be executed and delivered on the Closing Date.

 

(b)   Refinancing.  The amount necessary to discharge the
Existing Senior Subordinated Notes shall have been deposited into escrow with
the trustee therefor on terms reasonably satisfactory to the Administrative
Agent, a notice of redemption shall have been delivered to such trustee in accordance
with the terms of the indenture therefor (which shall have 

 

38

 

been acknowledged by the trustee as being
effective to discharge and call for redemption of all such notes in full), and
all other conditions to the defeasance of all Existing Senior Subordinated
Notes shall have been met.

 

(c)   Pro Forma Balance Sheet; Financial
Statements.  The Lenders shall have
received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of Holdings for the 2006, 2005 and 2004 fiscal years and (iii) unaudited
interim consolidated financial statements of Holdings for each quarterly period
ended subsequent to the date of the latest applicable financial statements
delivered pursuant to clause (ii) of this paragraph as to which such
financial statements are available and unaudited consolidated financial
statements of Holdings for the fiscal year ended December 31, 2007, and
such financial statements shall not reflect any material adverse change in the
consolidated financial condition of Holdings since December 31, 2006.

 

(d)   Approvals.  All governmental and material third party
approvals necessary, or in the discretion of the Administrative Agent,
advisable in connection with the Refinancing, the continuing operations of the
Group Members and the transactions contemplated hereby, shall have been
obtained and be in full force and effect, and all applicable waiting periods
shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on the Refinancing or the financing contemplated hereby.

 

(e)   Fees. 
The Lenders and the Agents shall have received all fees (including those
specified in Section 2.3(c)) required to be paid, and all expenses for
which invoices have been presented (including the reasonable fees and expenses
of legal counsel), on or before the Closing Date.  All such amounts will be paid with proceeds
of Loans made on the Closing Date and will be reflected in the funding
instructions given by the Borrower to the Administrative Agent on or before the
Closing Date.

 

(f)    Closing Date Certificate.  The Administrative Agent shall have received
a certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit A, with appropriate insertions and attachments including
the certificate of incorporation of each Loan Party that is a corporation
certified by the relevant authority of the jurisdiction of organization of such
Loan Party and a long form good standing certificate for each Loan Party from
its jurisdiction of organization.

 

(g)   Legal Opinions.  The Administrative Agent shall have received
the executed legal opinion of Kirkland & Ellis LLP, counsel to
Holdings and its Subsidiaries, substantially in the form of Exhibit C,
which legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent and the Lenders may
reasonably require.

 

(h)   Solvency Certificate.  The Administrative Agent shall have received
and shall be reasonably satisfied with a solvency certificate of the chief
financial officer of the Borrower substantially in the form of Exhibit G,
which shall document the solvency of the Loan Parties after giving effect to
the Refinancing and other transactions contemplated hereby.

 

39

 

(i)    Permitted Debt.  The chief financial officer of the Borrower
shall certify in writing to the Administrative Agent that the incurrence of
Indebtedness on the Closing Date under this Agreement is permitted under the
Existing Credit Agreement and the indenture governing the Existing Secured
Notes.

 

(j)    Notice of Borrowing.  The Administrative Agent shall have received
a fully executed and delivered notice of borrowing in form and substance
satisfactory to the Administrative Agent.

 

(k)   Miscellaneous.  The Administrative Agent shall have received
such other documents, agreements, certificates and information as it shall
reasonably request.

 

(l)    No Default.  No Default or Event of Default shall have
occurred and be continuing (both prior to, and after giving effect to such
extension of credit).

 

(m)  Representations and Warranties.  Each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents shall be true and
correct in all material respects on and as of such date as if made on and as of
such date, and after giving effect to the extensions of credit requested to be
made on such date, except for representations and warranties which specifically
relate to an earlier specific date, in which case such representations and
warranties shall be true and correct in all material respects as of such
earlier date.

 

(n)   No Change.  Since December 31, 2006, there has been
no development, event or circumstance that, individually or in the aggregate,
has had or could reasonably be expected to have a Material Adverse Effect.

 

(o)   “Know-Your-Customer” and Anti-Money
Laundering Rules and Regulations. 
The Lead Arrangers shall have received all documentation and other
information required by bank regulatory authorities under applicable “know-your-customer”
and anti-money laundering rules and regulations, including the Patriot
Act.

 

(p)   Subordinated Intercompany Note.  The Administrative Agent shall have received
a supplement, dated as of the Closing Date (the “Supplement”), to the
Subordinated Intercompany Note dated as of April 18, 2005, executed and
delivered by each party thereto providing that (i) the Indebtedness evidenced
by such Subordinated Intercompany Note is completely subordinated to the
Obligations and subject in right of payment to the prior payment in full of the
Obligations (other than contingent indemnity obligations for which no claim has
been made) and (ii) if an Event of Default has occurred and is continuing,
no payment on any such Indebtedness shall be made until the payment in full of
the Obligations.

 

SECTION 7.  AFFIRMATIVE COVENANTS

 

7.1.          Commission Reports.

 

(a)   Whether or not required by the SEC, so long
as any Loans are outstanding, the Borrower will furnish to the Administrative
Agent, within the time periods specified in the SEC’s rules and
regulations (including any permitted extensions): (i) all quarterly and
annual 

 

40

 

financial information that would be required
to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Borrower
were required to file such Forms, including a “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and, with respect to
the annual information only, a report on the annual financial statements by the
Borrower’s certified independent accountants; and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the
Borrower were required to file such reports, provided that the Borrower shall
not be required to deliver any such quarterly report or information or current
report if such report or information is filed with the SEC and made publicly
available on the SEC’s EDGAR website;

 

(b)   In addition, whether or not required by the
SEC, the Borrower will file a copy of all of the information and reports
referred to in clauses (a)(i) and (ii) above with the SEC for public
availability within the time periods specified in the SEC’s rules and
regulations (unless the SEC will not accept such a filing).  In addition, the Borrower and the Guarantors
have agreed that, for so long as any Loans remain outstanding, they will
furnish to the Administrative Agent and the Lenders, upon their request, the
information required to be delivered pursuant to Rule 144A(d)(4) under
the Securities Act; and

 

(c)   Notwithstanding the foregoing, so long as
Holdings is reporting consolidated financials with the SEC that are compliant
with the Exchange Act and the other reporting requirements of Section 7.1(a) and
Section 7.1(b), the Borrower shall not be obligated to comply with any of
the reporting requirements set forth in Section 7.1(a) and Section 7.1(b).

 

7.2.          Compliance Certificate; Default
Notice.

 

(a)   Borrower and each Guarantor shall deliver to
the Administrative Agent, within 90 days after the end of each fiscal year, an
Officers’ Certificate stating that a review of the activities of the Holdings
and its Subsidiaries during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to determining whether the
Holdings and the Borrower have kept, observed, performed and fulfilled their
obligations under this Agreement, and further stating, as to each such Officer
signing such certificate, that to the best of his or her knowledge, Holdings
and the Borrower have kept, observed, performed and fulfilled their obligations
under this Agreement and are not in default in the performance or observance of
any of the terms, provisions and conditions of this Agreement (or, if a Default
or Event of Default shall have occurred, describing all such Defaults or Events
of Default of which he or she may have knowledge and what action the Borrower
is taking or proposes to take with respect thereto) and that to the best of his
or her knowledge no event has occurred and remains in existence by reason of
which payments on account of the principal of or interest, if any, on the Loans
is prohibited or if such event has occurred, a description of the event and
what action Holdings and the Borrower is taking or proposes to take with
respect thereto;

 

(b)   So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 7.1(a) above
shall be accompanied by a written statement of the Borrower’s independent
public accountants (which shall be a firm of established national reputation)
that in making the examination necessary for certification of such financial
statements, nothing has come to their 

 

41

 

attention that would lead them to believe
that the Borrower has violated any provisions of Section 7 or Section 8
hereof relating to financial, accounting or reporting matters or, if any such
violation has occurred, specifying the nature and period of existence thereof,
it being understood that such accountants shall not be liable directly or
indirectly to any Person for any failure to obtain knowledge of any such
violation.  If such a certification is
contrary to the then current recommendations of the American Institute of
Certificate Public Accountants with respect to any year-end financial
statements being delivered to the Administrative Agent pursuant to Section 7.1(a),
the Borrower shall deliver an Officer’s Certificate to such effect to the
Administrative Agent at the time such year-end financial statements are so
delivered to the Administrative Agent; and

 

(c)   The Borrower shall, so long as any Loans are
outstanding, deliver to the Administrative Agent, forthwith upon any Officer
becoming aware of any Default or Event of Default, an Officer’s Certificate
specifying such Default or Event of Default and what action the Borrower is
taking or proposes to take with respect thereto.

 

7.3.          Payment of Obligations; Taxes.

 

(a)   Except as could not, individually or in the
aggregate, reasonably be expected to cause a Material Adverse Effect, Holdings
shall and shall cause each of its Subsidiaries to pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its contractual obligations of whatever nature, except where the amount
or validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the relevant Group Member.

 

(b)   Holdings shall and shall cause each of its
Subsidiaries to pay, prior to delinquency, any taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Lenders.

 

7.4.          Maintenance of Existence.  Holdings shall and shall cause each of its
Subsidiaries to (a)  preserve, renew and keep in full force and effect its
organizational existence and (b) take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business, except, in each case, as otherwise permitted by Section 8.4
and except, in the case of clause (b) above, to the extent that failure to
do so could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.

 

7.5.          Maintenance of Property; Insurance.  Holdings shall and shall cause each of its
Subsidiaries to (a) keep all property necessary in its business in good
working order and condition, ordinary wear and tear and casualty excepted and (b) maintain
with reputable insurance companies insurance on all its property in at least
such amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured against
in the same general area by similarly situated companies engaged in the same or
a similar business with respect to similar property.

 

42

 

7.6.          Inspection of Property; Books and
Records; Discussions.  Holdings shall
and shall cause each of its Subsidiaries to (a) keep proper books of
records and account in which entries that are full, true and correct in all
material respects in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its business and
activities and (b) at least once every fiscal year of the Borrower or at
any time while an Event of Default shall have occurred and be continuing,
permit representatives of any Lender (coordinated through the Administrative
Agent) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records during regular business hours  and to discuss the business, operations,
properties and financial and other condition of the Group Members with officers
and employees of the Group Members and with their independent certified public
accountants; provided that relevant officers and employees of the Group
Members shall have the right to be present during such discussions.  Nothing in this Section 7.6 shall be
construed to cause the Borrower to divulge any materials covered by an
attorney-client privilege that has not been waived.

 

7.7.          Notices.  The Borrower shall promptly give notice to
the Administrative Agent and each Lender of:

 

(a)   the occurrence of any default or event of default under the
Existing Credit Agreement or the Existing Secured Notes;

 

(b)   any (i) default or event of default
under any Contractual Obligation of any Group Member or (ii) litigation,
investigation or proceeding that may exist at any time between any Group Member
and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;

 

(c)   any litigation or proceeding affecting any
Group Member (i) in which the amount involved is $5,000,000 or more
(excluding amounts covered by insurance), (ii) in which injunctive or
similar relief is sought with respect to material operations or (iii) which
relates to any Loan Document;

 

(d)   the following events, as soon as possible and
in any event within 30 days after any Loan Party knows or has reason to know
thereof:  (i) the occurrence of any
Reportable Event with respect to any Multiemployer Plan, a failure to make any
required contribution to a Multiemployer Plan, the creation of any Lien in
favor of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the
institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan;

 

(e)   the creation or acquisition by any Loan Party
of any interest in a Subsidiary, the name and jurisdiction of incorporation or
organization of any such Subsidiary and, as to each such Subsidiary, the
percentage of each class of Capital Stock owned by any Loan Party; and

 

43

 

(f)    any development or event that, individually or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect.

 

Each notice pursuant to this Section 7.7
shall be accompanied by a statement of a Responsible Officer setting forth
details of the occurrence referred to therein and stating what action Holdings,
the Borrower or the relevant Subsidiary proposes to take with respect thereto.

 

7.8.          Environmental Laws. Except as
the failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, Holdings shall and shall cause each
of its Subsidiaries to:

 

(a)   Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if any,
with, all applicable Environmental Laws, and obtain and comply in all material
respects with and maintain, and ensure that all tenants and subtenants obtain
and comply in all material respects with and maintain, any and all licenses,
approvals, notifications, registrations or permits required by applicable
Environmental Laws.

 

(b)   Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all material respects
with all lawful orders and directives of all Governmental Authorities regarding
Environmental Laws.

 

7.9.          [Reserved.]

 

7.10.        Additional Subsidiaries.

 

(a)   If Holdings or any of its Subsidiaries shall
acquire or create another Subsidiary (other than a Foreign Subsidiary) then
such newly acquired or created Subsidiary shall execute a supplement to the
Guarantee Agreement becoming a Subsidiary Guarantor in accordance with the
terms of this Agreement.

 

(b)   A Subsidiary Guarantor may not sell or
otherwise dispose of all or substantially all of its assets to, or consolidate
with or merge with or into (whether or not such Subsidiary Guarantor is the
surviving Person), another Person, other than Holdings or another Subsidiary
Guarantor, unless (i) immediately after giving effect to that transaction,
no Default or Event of Default exists; and (ii) either (A) the Person
acquiring the property in any such sale or disposition or the Person formed by
or surviving any such consolidation or merger (if other than the Subsidiary
Guarantor) is a corporation, partnership, limited liability company or business
trust organized or existing under the laws of the United States, any state
thereof or the District of Columbia and assumes all the obligations of that
Subsidiary Guarantor under the Guarantee Agreement pursuant to a supplement
satisfactory to the Administrative Agent; or (B) such sale or other
disposition complies with Section 8.5, including the application of the
Net Proceeds therefrom.

 

7.11.        Further Assurances.  From time to time the Borrower shall execute
and deliver, or cause to be executed and delivered, such additional
instruments, certificates or 

 

44

 

documents, and
take all such actions, as the Administrative Agent may reasonably request for
the purposes of implementing or effectuating the provisions of this Agreement
and the other Loan Documents pursuant hereto or thereto.  Upon the exercise by the Administrative Agent
of any power, right, privilege or remedy pursuant to this Agreement or the
other Loan Documents which requires any consent, approval, recording
qualification or authorization of any Governmental Authority, the Borrower will
execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that
the Administrative Agent may be required to obtain from any Subsidiary of
Holdings for such governmental consent, approval, recording, qualification or
authorization.

 

7.12.        Stay, Extension
and Usury Laws.  Each of Holdings and
the Borrower covenants (to the extent that it may lawfully do so) that it and
each of its Subsidiaries shall not at any time insist upon, plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay,
extension or usury law wherever enacted, now or at any time hereafter in force,
that may affect the covenants or the performance of this Agreement; and each of
Holdings and the Borrower (to the extent that it may lawfully do so) hereby
expressly waives with respect to itself and each of its Subsidiaries all
benefit or advantage of any such law, and covenants that it and each of its
Subsidiaries shall not, by resort to any such law, hinder, delay or impede the
execution of any power herein granted to the Administrative Agent, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.

 

SECTION 8.  NEGATIVE COVENANTS

 

8.1.          [Reserved.]

 

8.2.          Indebtedness .  (a)  Holdings shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, (collectively, “Incur”), with respect to any
Indebtedness, and Holdings will not, and will not permit any of its
Subsidiaries to, issue any Disqualified Stock (other than to Holdings or a
Wholly Owned Subsidiary); provided, however, that Holdings and any of its
Subsidiaries may (i) incur unsecured Indebtedness that is subordinated in
right of payment to the Loans hereunder, and (ii) issue shares of
Disqualified Stock, if Holdings’ Consolidated Fixed Charge Coverage Ratio at
the time of the incurrence of such Indebtedness or issuance of such
Disqualified Stock, after giving pro forma effect thereto (including a pro
forma application of the use of proceeds therefrom), is greater than 2.25 to
1.0:

 

(b)   Section 8.2(a) shall not prohibit
the incurrence of any of the following items of Indebtedness or issuance of
Disqualified Stock (collectively, “Permitted Debt”) by Holdings and its
Subsidiaries:

 

(i)            the
incurrence of Indebtedness pursuant to the Existing Credit Agreement (including
letter of credit obligations) in an aggregate principal amount outstanding
under this clause (i) at any one time not to exceed $325,000,000, less the
aggregate amount of all Net Proceeds of Asset Sales applied by Holdings or any
of its Subsidiaries to repay any Indebtedness under the Existing Credit
Agreement (and, in the 

 

45

 

case of any revolving credit Indebtedness
under the Existing Credit Agreement, to effect a corresponding permanent
commitment reduction thereunder) pursuant to Section 8.5;

 

(ii)           the
incurrence of Existing Indebtedness;

 

(iii)          the
incurrence of any Indebtedness represented by the Obligations;

 

(iv)          the
incurrence of Permitted Refinancing Indebtedness in exchange for, or the net
proceeds of which are used to refund, refinance or replace Indebtedness (other
than intercompany Indebtedness) that was permitted by this Agreement to be
Incurred under Section 8.2(a) or clauses (ii), (iii), (iv), (viii), (x) or
(xi) of this Section 8.2(b), or the issuance by Holdings or any of its
Subsidiaries of Permitted Refinancing Disqualified Stock in exchange for, or
the net proceeds of which are used to refund, refinance or replace Disqualified
Stock (other than intercompany Disqualified Stock) that was permitted by this
Agreement to be issued;

 

(v)           the
incurrence of intercompany Indebtedness between or among Holdings and any of
its Subsidiaries; provided, however, that:

 

                (A)  if Holdings or
any Subsidiary Guarantor is the obligor, such Indebtedness must be unsecured,
evidenced by a promissory note and expressly subordinated to the prior payment
in full in cash of all Obligations, and

 

                (B)  (i) any
subsequent issuance or transfer of Equity Interests that results in any such
Indebtedness being held by a Person other than Holdings or a Subsidiary of
Holdings, and (ii) any sale or other transfer of any such Indebtedness to
a Person that is not either Holdings or a Subsidiary of Holdings shall be
deemed, in each case, to constitute an incurrence of such Indebtedness by
Holdings or such Subsidiary, as the case may be, that was not permitted by this
Section 8.2(b)(v);

 

(vi)          the
incurrence of Hedging Obligations, provided that such obligations are entered
into for bona fide hedging purposes and not for speculative purposes;

 

(vii)         the
incurrence of additional Indebtedness in an aggregate amount not to exceed at
any one time outstanding 100% of the net proceeds received by Holdings or any
of its Subsidiaries from the issue or sale after the Closing Date of Qualified
Capital Stock (including upon the conversion or exchange of any Indebtedness),
or net proceeds contributed to the capital of Holdings or any of its
Subsidiaries (other than in respect of Disqualified Capital Stock) as
determined in accordance with clauses (iii)(b) and (iii)(c) of Section 8.6(a) to
the extent such net proceeds have not been applied pursuant to such clause to
make Restricted Payments or to effect other transactions pursuant to Section 8.6(b) (it
being understood that any Indebtedness incurred under this clause (vii) shall
cease to be deemed incurred or outstanding for purposes of this clause (vii) from
and after the first date on which Holdings could have incurred such 

 

46

 

Indebtedness
under Section 8.2(a) without reliance upon this clause (vii), and
such Indebtedness shall thereupon be deemed to have been so incurred);

 

(viii)         the
incurrence of Indebtedness represented by Capital Lease Obligations, mortgage
financings or purchase money obligations, in each case incurred for the purpose
of financing all or any part of the purchase price or cost of construction or
improvement of property, plant or equipment used in the business of Holdings or
any of its Subsidiaries at the time of such incurrence (whether through a
direct purchase of assets or the Capital Stock of any Person owning solely
those assets) in an aggregate principal amount not to exceed $25,000,000 at any
time outstanding;

 

(ix)           the
guarantee by Holdings, the Borrower or any Subsidiary Guarantor of Indebtedness
of Holdings, the Borrower or a Subsidiary of Holdings that was permitted to be
incurred by another provision of this Section 8.2;

 

(x)            the
incurrence of Indebtedness (including but not limited to Capital Lease
Obligations, mortgage financings or purchase money obligations) for the purpose
of financing all or any part of the price or cost of the bona fide acquisition,
construction or improvement of property or assets (whether through direct
purchase of assets or the Capital Stock of any Person owning such assets) or
incurred to refinance any such purchase price or cost of acquisition,
construction or improvement; provided, however, that no Indebtedness may be
incurred under this clause (x) if the amount of Indebtedness outstanding
under this clause (x) exceeds 5% of the total consolidated assets of
Holdings and its Subsidiaries as set forth on its consolidated balance sheet as
of the most recently completed fiscal quarter prior to the Incurrence of
Indebtedness pursuant to this clause (x) for which financial statements
have been filed with the SEC or provided to the Administrative Agent; and

 

(xi)           the
incurrence of the Existing Secured Notes.

 

For purposes of determining compliance with
this Section 8.2, in the event that an item of Indebtedness meets the
criteria of more than one of the categories of Permitted Debt described in
Sections 8.2(b)(i) through (x) above or is entitled to be Incurred
pursuant to Section 8.2(a), Holdings may, in its sole discretion:

 

(A)  at the time the proposed Indebtedness is incurred, classify
all or a portion of that item of indebtedness on the date of its incurrence
under either Section 8.2(a) or under any category of Permitted Debt
described in clauses (i) through (x) of this Section 8.2(b); and

 

(B)  reclassify at any later date all or a portion of that or any
other item of Indebtedness as being or having been incurred in any manner that
complies with this Section 8.2;

 

provided,
that, in each case, Indebtedness under the Existing Credit Agreement
outstanding on the Closing Date is deemed to be incurred pursuant to Section 8.2(b)(i).

 

47

 

Accrual of interest, accretion or
amortization of original issue discount and the payment of interest on any
Indebtedness in the form of additional Indebtedness with the same terms shall
not be deemed to be an incurrence of Indebtedness for purposes of this Section 8.2.

 

8.3.          Liens.  Holdings shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or suffer
to exist any Lien securing Indebtedness on any asset now owned or hereafter
acquired, or any income or profits therefrom or assign or convey any right to
receive income therefrom, except Permitted Liens.

 

8.4.          Merger, Consolidation or Sale of
Assets.  (a)  Neither Holdings
nor the Borrower shall consolidate or merge with or into (whether or not
Holdings or the Borrower, as applicable, is the surviving corporation), or
sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its properties or assets in one or more related
transactions, to another Person unless:

 

(i)            Holdings
or the Borrower, as applicable, is the surviving corporation or the Person
formed by or surviving any such consolidation or merger (if other than Holdings
or the Borrower, as applicable) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation,
partnership, limited liability company or business trust organized or existing
under the laws of the United States, any state thereof or the District of
Columbia;

 

(ii)           the
Person formed by or surviving any such consolidation or merger (if other than
Holdings or the Borrower, as applicable) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of Holdings and the Borrower under the Loans
and this Agreement pursuant to an agreement in a form reasonably satisfactory
to the Administrative Agent;

 

(iii)          immediately
after such transaction no Default or Event of Default exists; and

 

(iv)          except
in the case of a merger of Holdings or the Borrower with or into a Wholly Owned
Subsidiary of Holdings or the Borrower, as applicable, immediately after giving
effect to such transaction on a pro forma basis, Holdings or the Borrower, as
applicable, or the Person formed by or surviving any such consolidation or
merger (if other than Holdings or the Borrower), or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made, will, on the date of such transaction after giving pro forma effect
thereto and any related financing transactions as if such transaction had
occurred at the beginning of the applicable latest full fiscal quarter, be permitted
to incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Fixed Charge Coverage Ratio test set forth in Section 8.2(a); provided,
however, that this Section 8.4(a)(iv) shall not apply if the
principal purpose of such transaction is to change the state of incorporation
of Holdings or the Borrower and any such transaction shall not have as one of
its purposes the evasion of the foregoing limitations.

 

48

 

(b)   Upon any consolidation or merger, or any
sale, assignment, transfer, lease, conveyance or other disposition of all or
substantially all of the assets of Holdings or the Borrower in accordance with Section 8.4(a),
the successor corporation formed by such consolidation or into or with which
Holdings or the Borrower, as applicable, is merged or to which such sale,
assignment, transfer, lease, conveyance or other disposition is made shall
succeed to, and be substituted for (so that from and after the date of such
consolidation, merger, sale, lease, conveyance or other disposition, the
provisions of this Agreement referring to “Holdings” or the “Borrower” shall
refer instead to the successor corporation and not to Holdings or the
Borrower), and may exercise every right and power of, Holdings or the Borrower
under this Agreement with the same effect as if such successor Person had been
named as Holdings or the Borrower herein; provided, however, that the
predecessor Holdings or the Borrower shall not be relieved from the obligation
to pay the principal of, premium, if any, and interest on the Loans and any
other Obligations except in the case of a sale, assignment, transfer,
conveyance or other disposition of all of Holdings’ or the Borrower’s assets
that meets the requirements of Section 8.4(a) hereof; provided,
further, that the predecessor Holdings or the Borrower shall not be relieved
from the obligation to pay the principal of, premium, if any, and interest on
the Loans and any other Obligations in the case of a lease of all or substantially
all of its property and assets.

 

8.5.          Disposition of Property.  Holdings shall not, and shall not permit any
of its Subsidiaries to, consummate any Asset Sale, unless:

 

(i)            the
consideration received by Holdings or such Subsidiary is at least equal to the
fair market value of the assets sold or disposed of as determined by the board
of directors of Holdings or such Subsidiary, as the case may be; and

 

(ii)           at
least 75% of the consideration received consists of cash or Cash Equivalents or
the assumption of Indebtedness of Holdings or any of its Subsidiaries, other
than Indebtedness to the Borrower or any Subsidiary of Holdings (provided,
however, that Holdings or such Subsidiary is irrevocably and unconditionally
released from all liability under such indebtedness, or notes or other
obligations that are promptly, but in no event more than 90 days after receipt,
converted by Holdings or such Subsidiary into cash or Cash Equivalents).

 

(b)   In the event and to the extent that the Net
Proceeds received by Holdings or any of its Subsidiaries from one or more Asset
Sales occurring after the Closing Date in any period of 12 consecutive months
exceed 10% of Adjusted Consolidated Net Tangible Assets, determined as of the
date closest to the commencement of such 12-month period for which a
consolidated balance sheet of Holdings has been filed with the SEC or provided
to the Administrative Agent, then Holdings shall or shall cause the relevant
Subsidiary to:

 

(i)            within
twelve months after the date Net Proceeds so received exceed 10% of Adjusted
Consolidated Net Tangible Assets, (A) apply an amount equal to the amount
of such Net Proceeds in excess of 10% of Adjusted Consolidated Net Tangible
Assets to permanently repay Senior Debt or any Indebtedness of any Subsidiary
of Holdings, other than a Subsidiary Guarantor, in each case owing to a Person
other than 

 

49

 

Holdings or
any of its Subsidiaries; or (B) invest, including by way of capital
expenditure or acquisition of Capital Stock or assets, an equal amount, or the
amount not so applied pursuant to clause (A) (or enter into a definitive
agreement committing to so invest within twelve months after the date of such
agreement), in property or assets (other than current assets) of a nature or
type or that are used in a business (or in a Person having property and assets
of a nature or type, or engaged in a business) related, ancillary, or
complementary to the business of Holdings and its Subsidiaries existing on the
date of such investment; and

 

(ii)           apply,
no later than the end of later of (x) the 12-month period referred to in
clause (i) above or (y) the additional period referred to in
paragraph (B) of clause (i), such Net Proceeds (to the extent not applied
pursuant to clause (i)) as provided in clause (c) of this Section 8.5.

 

(c)   If, as of the first day of any calendar
month, the aggregate amount of Excess Proceeds not theretofore subject to an
offer to repay pursuant to this Section 8.5 totals at least $10,000,000,
after making any mandatory prepayments or prepayments in connection with offers
to purchase required pursuant to the Existing Credit Agreement or Permitted
Refinancing Indebtedness in respect thereof or the Existing Secured Notes or
Permitted Refinancing Indebtedness in respect thereof, the Borrower must
commence an offer to repay (an “Asset Sale Offer”), no later than the
fifteenth Business Day of such month, and consummate such Asset Sale Offer with
the Lenders, and if required by the terms of any Indebtedness that is pari
passu with the Loans, including the Existing Secured Notes (“Pari Passu
Indebtedness”), with the holders of such Pari Passu Indebtedness on a pro
rata basis, an aggregate principal amount of Loans, and Pari Passu
Indebtedness, if any, equal to the Excess Proceeds on such date, at a price
equal to 100% of the principal amount thereof, plus, in each case, accrued and
unpaid interest, if any, to the payment date, plus, if such offer to repay
pursuant to this Section 8.5 occurs on or prior to the first anniversary
of the Closing Date, an amount equal to the Make-Whole Premium in respect of
such Loans.  If the aggregate principal
amount of Loans and any such Pari Passu Indebtedness validly accepted and not withdrawn
by holders thereof exceeds the amount of Excess Proceeds, the Loans and Pari
Passu Indebtedness shall be repaid on a pro rata basis.

 

(d)   Upon the completion of any such Asset Sale
Offer, the amount of Excess Proceeds shall be reset at zero.

 

8.6.          Restricted Payments.  (a)  Holdings will not, and will not
cause or permit its Subsidiaries, to, directly or indirectly, make any
Restricted Payment if at the time of such Restricted Payment and immediately
after giving effect thereto:

 

(i)            a
Default or Event of Default shall have occurred and be continuing;

 

(ii)           Holdings
is not able to incur $1.00 of additional Indebtedness pursuant to the
Consolidated Fixed Charge Coverage Ratio test set forth in Section 8.2(a);
or

 

50

 

(iii)          the aggregate amount of Restricted Payments
made subsequent to January 1, 2008 under this Section 8.6(a) (the
amount expended for such purposes, if other than in cash, being the fair market
value of such property as determined by the board of directors of Holdings in
good faith) exceeds the sum of (A) 100% of the aggregate net proceeds,
including the fair market value of property other than cash as determined by
the board of directors of Holdings in good faith, received subsequent to January 1,
2008 by Holdings or any of its Subsidiaries from any Person (other than a
Subsidiary of Holdings) from the issuance and sale subsequent to January 1,
2008 of Qualified Capital Stock of Holdings or any of its Subsidiaries
(excluding any net proceeds from issuances and sales financed directly or
indirectly using funds borrowed from Holdings or any of its Subsidiaries, until
and to the extent such borrowing is repaid, but including the proceeds from the
issuance and sale (whether before or after January 1, 2008) of any
securities convertible into or exchangeable for Qualified Capital Stock of
Holdings or any of its Subsidiaries to the extent such securities are so
converted or exchanged after January 1, 2008 and including any additional
proceeds received by Holdings or such Subsidiary upon such conversion or
exchange); plus (B) without duplication of any amount included in clause
(iii)(A) above, 100% of the aggregate net proceeds, including the fair
market value of property other than cash (valued as provided in clause (iii)(A) above),
received by Holdings as a capital contribution subsequent to January 1,
2008; plus (C) an amount equal to the return on Investments in an
Affiliate of Holdings that is not controlled, directly or indirectly, by
Holdings resulting from payments of interest on debt, dividends, or other
transfers of assets, in each case to Holdings or any of its Subsidiaries or
from the net proceeds (if other than cash, valued as provided in clause (iii)(A) above)
from the sale of any such Investment (except, in each case, to the extent any
such payment or proceeds are included in the calculation of Consolidated
EBITDA), net of, in each case, the amount of Investments previously made by
Holdings or any of its Subsidiaries in such Person.

 

(b)   Notwithstanding clause (a) of
this Section 8.6, this Section 8.6 shall not prohibit:

 

(i)            the payment of any dividend or the making
of any distribution within 60 days after the date of its declaration if such
dividend or distribution would have been permitted on the date of declaration;

 

(ii)           the purchase, redemption or other
acquisition or retirement of any Capital Stock of Holdings or any of its
Subsidiaries or any warrants, options or other rights to acquire shares of any
class of such Capital Stock either (A) solely in exchange for shares of
Qualified Capital Stock of Holdings or any of its Subsidiaries or other
warrants, options or rights to acquire such Capital Stock of Holdings or any of
its Subsidiaries or (B) through the application of the net proceeds of a
substantially concurrent sale for cash (other than to a Subsidiary) of shares
of Qualified Capital Stock of Holdings or any of its Subsidiaries or warrants,
options or other rights to acquire Qualified Capital Stock of Holdings or any
of its Subsidiaries or (C) in the case of Disqualified Capital Stock,
solely in exchange for, or through the application of the net 

 

51

 

proceeds of a substantially concurrent sale for cash (other than to a
Subsidiary) of, Disqualified Capital Stock;

 

(iii)          the making of any principal payment or the
redemption, repurchase, defeasance or other acquisition or retirement for value
of Indebtedness of Holdings, the Borrower or any Subsidiary Guarantor which is
subordinated in right of payment to the Obligations, in exchange for, or out of
the proceeds of, a substantially concurrent sale for cash (other than to a
Subsidiary) of (A) shares of Qualified Capital Stock of Holdings or any of
its Subsidiaries (or options, warrants or other rights to acquire such Capital
Stock) or (B) Permitted Refinancing Indebtedness;

 

(iv)          payments or distributions to dissenting
stockholders pursuant to applicable law, pursuant to or in connection with a
consolidation, merger or transfer of assets;

 

(v)           repurchases of warrants, options or rights
to acquire Capital Stock deemed to occur upon exercise of warrants, options or
rights to acquire Capital Stock when such warrants, options or rights represent
a portion of the exercise price of such warrants, options or rights;

 

(vi)          dividends on Qualified Capital Stock in an
annual amount not to exceed 6.0% of the net cash proceeds received from shares
of Qualified Capital Stock sold (other than to a Subsidiary) for the account of
Holdings or any of its Subsidiaries; and

 

(vii)         Investments, not to exceed more than
$25,000,000 at any time outstanding, in Affiliates of Holdings not controlled,
directly or indirectly, by Holdings;

 

provided, however, that in the case of
clauses other than clauses (i), (ii) and (vii) of this Section 8.6(b),
no Event of Default shall have occurred or be continuing at the time of such
payment or as a result thereof.

 

(c)   To the extent the issuance of
Capital Stock and the receipt of capital contributions are applied to permit
the issuance of Indebtedness pursuant to clause (vii) of the definition of
Permitted Indebtedness, the issuance of such Capital Stock and the receipt of
such capital contributions shall not be applied to permit payments under this Section 8.6.

 

8.7.          [Reserved.]

 

8.8.          [Reserved.]

 

8.9.          [Reserved.].

 

8.10.        Transactions with
Affiliates.  (a)  Holdings shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
make any payment to, or sell, lease, transfer or otherwise dispose of any of
its properties or assets to, or purchase any property or assets from, or enter
into, make, amend, renew or extend any transaction, contract, agreement,
understanding, 

 

52

 

loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an “Affiliate Transaction”),
unless:

 

(i)            such Affiliate Transaction is on terms that
are no less favorable to Holdings or such Subsidiary than those that might
reasonably have been obtained in a comparable arm’s-length transaction by
Holdings or Restricted Subsidiary with an unrelated Person; and

 

(ii)           if such Affiliate Transaction or series of
related Affiliate Transactions involves aggregate consideration in excess of
$5,000,000, the board of directors of Holdings (including a majority of the
disinterested members of the board of directors) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clause (i) of this paragraph as evidenced by a
resolution of the board of directors promptly delivered to the Administrative
Agent.

 

(b)   The following items shall not
be deemed to be Affiliate Transactions and, therefore, will not be subject to
the provisions of Section 8.10(a):

 

(i)            any employment agreement, employee benefit
plan or stock option plan entered into by Holdings or any of its Subsidiaries
or the issuance of securities or other payments, awards or grants in cash,
securities or otherwise pursuant thereto in the ordinary course of business
that has been approved by a majority of the disinterested members of the board
of directors of Holdings;

 

(ii)           transactions between or among Holdings and
its Wholly Owned Subsidiaries;

 

(iii)          Restricted Payments that are permitted by the
provisions of Section 8.6;

 

(iv)          reasonable and customary directors’ fees,
indemnification and similar arrangements and payments thereunder by Holdings or
any of its Subsidiaries;

 

(v)           loans or advances to employees of Holdings
or any of its Subsidiaries in the ordinary course of business, provided that
the aggregate amount of all such loans and advances at any time outstanding
shall not exceed $1,000,000;

 

(vi)          any agreement set forth on Schedule 8.10 as
in effect as of the date of this Agreement or any amendment thereto (so long as
any such amendment, taken as a whole, is not disadvantageous to the Lenders in
any material respect) or any transaction contemplated thereby;

 

(vii)         the issuance of Capital Stock or other Equity
Interests of Holdings (other than Disqualified Stock) or the making of other
capital contributions to Holdings; and

 

53

 

(viii)        payments by the Borrower to its Affiliates of
principal, interest, fees, indemnities and expense reimbursements under this
Agreement and the entering into of any amendments, restatements or
modifications of this Agreement or any other Loan Document in accordance with Section 11.1.

 

8.11.        [Reserved.]

 

8.12.        [Reserved.]

 

8.13.        Changes in Fiscal
Periods.  Holdings shall not permit
the fiscal year of the Borrower to end on a day other than December 31 or
change Holdings’ method of determining fiscal quarters.

 

8.14.        [Reserved.]

 

8.15.        Clauses Restricting
Subsidiary Distributions.   (a) 
Holdings shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the right of any Subsidiary to:

 

(i)            pay dividends or make any other
distributions on its Capital Stock to the Borrower or any of Subsidiary of
Holdings other than the Borrower or pay any indebtedness owed to the Borrower
or any Subsidiary of Holdings other than the Borrower;

 

(ii)           make loans or advances to the Borrower or
any Subsidiary of Holdings other than the Borrower; or

 

(iii)          transfer any of its properties or assets to
the Borrower or any Subsidiary of Holdings other than the Borrower.

 

(b)   The preceding restrictions set
forth in Section 8.15(a) above shall not apply to encumbrances or
restrictions existing under or by reason of:

 

(i)            Existing Indebtedness as in effect on the
date of this Agreement;

 

(ii)           agreements existing on the date of this
Agreement, and any amendments, modifications, restatements, renewals,
extensions, supplements, refundings, replacements or refinancings thereof,
provided that such amendments, modifications, restatements, renewals,
extensions, supplements, refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to dividend and other payment
restrictions than those contained in agreements as in effect on the date of
this Agreement, as determined in good faith by the board of directors of
Holdings;

 

(iii)          this Agreement;

 

54

 

(iv)          the Existing Credit Agreement, the Existing
Secured Notes and/or the documentation for the Liens securing the obligations
thereunder; provided that the restrictions contained in any such agreement are
no more restrictive, taken as a whole (as determined in good faith by the board
of directors of Holdings), than those contained in such agreement as of the
date hereof;

 

(v)           applicable law;

 

(vi)          any instrument governing Indebtedness or
Capital Stock of a Person acquired by the Borrower or any Subsidiary of
Holdings other than the Borrower as in effect at the time of such acquisition
(except to the extent such Indebtedness or Capital Stock was incurred in
connection with or in contemplation of such acquisition), which encumbrance or
restriction is not applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of the Person, so
acquired, provided that, in the case of Indebtedness, such Indebtedness was
permitted by the terms of this Agreement to be incurred;

 

(vii)         customary non-assignment provisions in leases,
licenses and other agreements entered into in the ordinary course of business;

 

(viii)        purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in Section 8.15(a)(iii) on the property so acquired;

 

(ix)           any agreement for the sale of a Subsidiary
(whether by stock sale, asset sale, merger, consolidation or otherwise) that
restricts distributions by such Subsidiary pending its sale;

 

(x)            Permitted Refinancing Indebtedness,
provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are no more restrictive, taken as a whole
(as determined in good faith by the board of directors of Holdings), than those
contained in the agreements governing the Indebtedness being refinanced (it
being understood that any Permitted Refinancing Indebtedness incurred to
refinance the Existing Secured Notes (or any permitted refinancing thereof)
shall not be deemed to have more restrictive restrictions than those in the
agreements governing Indebtedness being refinanced solely due to the fact that (A) any
Lien securing such Permitted Refinancing Indebtedness may be higher in priority
than the Liens securing the Indebtedness being refinanced or (B) such
restrictions are substantially identical to those contained in the Existing
Credit Agreement);

 

(xi)           secured Indebtedness otherwise permitted to
be incurred pursuant to the provisions under Section 8.3 that limits the
right of the debtor to dispose of the assets securing such Indebtedness;

 

55

 

(xii)          customary provisions with respect to the
disposition or distribution of assets or property in joint venture agreements
and other similar agreements entered into in the ordinary course of business;
or

 

(xiii)         restrictions on cash or other deposits or net
worth imposed by customers under contracts entered into in the ordinary course
of business.

 

8.16.        Business Activities.  Holdings shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than Permitted Businesses,
except to such extent as would not be material to Holdings and its Subsidiaries
taken as a whole.

 

8.17.        Payments for Consent.  Neither Holdings nor any of its Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Lender for or as an
inducement to any consent, waiver or amendment of any of the terms or
provisions of this Agreement unless such consideration is offered to be paid or
is paid to all Lenders that consent, waive or agree to amend in the time frame
set forth in the amendments documents relating to such consent, waiver or
agreement.

 

8.18.        Issuance and Sales of
Equity Interests in Subsidiaries. 
Holdings shall not transfer, convey, sell, lease or otherwise dispose
of, and shall not permit any of its Subsidiaries to issue, transfer, convey,
sell, lease or otherwise dispose of, any Equity Interests in any Subsidiary of
Holdings (other than the issuance of directors’ qualifying shares or an
immaterial number of shares required by applicable law to be held by a Person
other than Holdings or a Subsidiary and excluding any pledge of Equity
Interests of any Subsidiary) to any Person (other than Holdings or a Wholly
Owned Subsidiary of Holdings), except:

 

(a)   if, immediately after giving effect to such
issuance, transfer, conveyance, sale, lease or other disposition, such
Subsidiary would no longer constitute a Subsidiary and any Investment in such
Person remaining after giving effect to such issuance or sale would have been
permitted to be made under Section 8.2 hereof if made on the date of such
issuance or sale;

 

(b)   sales of
common stock of a Subsidiary by Holdings or a Subsidiary, provided that
Holdings or such Subsidiary complies with Section 8.5; or

 

(c)   sales of
Disqualified Stock or Preferred Stock of a Subsidiary Guarantor by Holdings or
a Subsidiary Guarantor that are otherwise permitted under Section 8.2,
provided that Holdings or such Subsidiary Guarantor complies with Section 8.5.

 

SECTION 9.  EVENTS OF DEFAULT

 

If any of the following events shall occur
and be continuing:

 

(a)   the Borrower shall fail to pay
any principal of any Loan when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan, or any other amount
payable hereunder or under any other Loan Document, within five Business 

 

56

 

Days after any such interest or other amount
becomes due in accordance with the terms hereof; or

 

(b)   any representation or warranty
made or deemed made by any Loan Party herein or in any other Loan Document or
that is contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been inaccurate in any material
respect on or as of the date made or deemed made except for representations and
warranties which specifically relate to an earlier specific date, in which case
such representations and warranties shall have been inaccurate in any material
respect as of such earlier date; or

 

(c)   any Loan Party shall default in
the observance or performance of any agreement contained in Section 7.4
(with respect to Holdings and the Borrower only), Section 7.2(c) or Section 8;
or

 

(d)   any Loan Party shall default in
the observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs (a) through
(c) of this Section), and such default shall continue for a period of 30
days after the earlier of (i) an officer of such Loan Party becoming aware
of such default or (ii) receipt by the Borrower of notice from the Administrative
Agent or any Lender of such default; or

 

(e)   any Group Member shall (i) default
in making any payment of any principal of any Indebtedness (including any
Guarantees, but excluding the Loans) on the scheduled or original due date with
respect thereto; or (ii) default in making any payment of any interest on
any such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii) default
in the observance or performance of any other agreement or condition relating
to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a
trustee or agent on behalf of such holder or beneficiary) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or to become subject to a mandatory offer to purchase by the
obligor thereunder or (in the case of any such Indebtedness constituting a
Guarantee) to become payable, and such Indebtedness does become so due or
payable or subject to mandatory offer to purchase; provided, that a
default, event or condition described in any of clauses (i), (ii) or (iii) of
this paragraph (e) shall not at any time constitute an Event of Default
unless, at such time, one or more defaults, events or conditions of the type
described in clauses (i), (ii) and (iii) this paragraph (e) shall
have occurred and be continuing with respect to Indebtedness the outstanding
principal amount of which exceeds in the aggregate $15,000,000; or

 

(f)    (i) any Group Member
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, administration or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, 

 

57

 

composition, receivership or other relief
with respect to it or its debts, or (B) seeking appointment of a receiver,
trustee, custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Group Member any case, proceeding or other action of a
nature referred to in clause (i) above that (A) results in the entry
of an order for relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii) there
shall be commenced against any Group Member any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets that results
in the entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) any Group Member shall take any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (i), (ii), or (iii) above; or (v) any Group
Member shall generally not, or shall be unable to, or shall admit in writing
its inability to generally, pay its debts as they become due; or

 

(g)   (i) any Person shall
engage in any “prohibited transaction” (as defined in Section 406 of ERISA
or Section 4975 of the Code) involving any Plan, (ii) any “accumulated
funding deficiency” (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of the PBGC
or a Plan shall arise on the assets of any Group Member or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to,
or proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (v) any
Group Member or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i), (iii), (iv), (v) and (vi) above,
such event or condition, together with all other such events or conditions, if
any, could, in the sole judgment of the Required Lenders, reasonably be
expected to have a Material Adverse Effect; or

 

(h)   one or more judgments or
decrees shall be entered against any Group Member involving in the aggregate a
liability (excluding amounts covered by insurance as to which the relevant
insurance company has not denied coverage, after reaching a final decision
regarding such coverage) of $15,000,000 or more, and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 45 days from the entry thereof; or

 

(i)    the guarantee contained in Section 2
of the Guarantee Agreement shall cease, for any reason other than in accordance
with its terms, to be in full force and effect or any Loan Party or any
Affiliate of any Loan Party shall so assert;

 

then, and in any such event, (A) if
such event is an Event of Default specified in clause (i) or (ii) of
paragraph (f) above with respect to the Borrower, automatically the
Commitments shall 

 

58

 

immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents shall immediately become due
and payable, and (B) if such event is any other Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents to be
due and payable forthwith, whereupon the same shall immediately become due and
payable.  Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.

 

SECTION 10.  THE AGENTS

 

10.1.        Appointment.  Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent,
in such capacity, to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to such Agent by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto.  
Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.

 

10.2.        Delegation of Duties.  Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties.  No
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.

 

10.3.        Exculpatory Provisions.  Neither any Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this Agreement or any other Loan
Document (except to the extent that any of the foregoing are found by a final
and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person’s own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder.  The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.

 

59

 

10.4.        Reliance by Agents.  Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including
counsel to Holdings or the Borrower), independent accountants and other experts
selected by such Agent.  The
Administrative Agent may deem and treat the payee of any Note as the owner thereof
for all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have been filed with the Administrative Agent.  Each Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Agents shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
other Loan Documents in accordance with a request of the Required Lenders (or,
if so specified by this Agreement, all Lenders), and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.

 

10.5.        Notice of Default.  No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrower
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a “notice of default”.  In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give notice thereof to
the Lenders.  The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders (or, if so specified by
this Agreement, all Lenders or any other instructing group of Lenders specified
by this Agreement); provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders.

 

10.6.        Non-Reliance on Agents
and Other Lenders.  Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or Affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
Affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. 
Each Lender represents to the Agents that it has, independently and
without reliance upon any Agent or any other Lender, and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, financial and
other condition and creditworthiness of the Loan Parties and their Affiliates
and made its own decision to make its Loans hereunder and enter into this
Agreement.  Each Lender also represents
that it will, independently and without reliance upon any Agent or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions 

 

60

 

in taking or not
taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their Affiliates. 
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business,
operations, property, condition (financial or otherwise), prospects or
creditworthiness of any Loan Party or any Affiliate of a Loan Party that may
come into the possession of the Administrative Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or Affiliates.

 

10.7.        Indemnification.  The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by Holdings or the Borrower
and without limiting the obligation of Holdings or the Borrower to do so),
ratably according to their respective Aggregate Exposure Percentages in effect
on the date on which indemnification is sought under this Section (or, if
indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance
with such Aggregate Exposure Percentages immediately prior to such date), from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever that may at any time (whether before or after the payment of the
Loans) be imposed on, incurred by or asserted against such Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements that are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from such Agent’s gross negligence or willful misconduct.  The agreements in this Section shall
survive the payment of the Loans and all other amounts payable hereunder.

 

10.8.        Agent in Its Individual
Capacity.  Each Agent and its
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with any Loan Party as though such Agent were not an
Agent.  With respect to its Loans made or
renewed by it, each Agent shall have the same rights and powers under this
Agreement and the other Loan Documents as any Lender and may exercise the same
as though it were not an Agent, and the terms “Lender” and “Lenders” shall
include each Agent in its individual capacity.

 

10.9.        Successor
Administrative Agent.  The
Administrative Agent may resign as Administrative Agent upon 10 Business Days’
notice to the Lenders and the Borrower. 
If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or
Section 9(f) with respect to the Borrower shall have occurred and be
continuing) be subject to approval by the Borrower (which approval shall not be
unreasonably withheld or delayed), whereupon such successor agent shall succeed
to the rights, powers and duties of the 

 

61

 

Administrative
Agent, and the term “Administrative Agent” shall mean such successor agent
effective upon such appointment and approval, and the former Administrative
Agent’s rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Loans.  If no successor agent has
accepted appointment as Administrative Agent by the date that is 10 Business
Days following a retiring Administrative Agent’s notice of resignation, the
retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective and the Lenders shall assume and perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above.  The Syndication Agent may, at any time, by
notice to the Lenders and the Administrative Agent, resign as Syndication Agent
hereunder, whereupon the duties, rights, obligations and responsibilities of
the Syndication Agent hereunder, shall automatically be assumed by, and inure
to the benefit of, the Administrative Agent, without any further act by the
Syndication Agent, the Administrative Agent or any Lender.  After any retiring Administrative Agent’s
resignation as Administrative Agent, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents.

 

10.10.      Agents Generally.  Except as expressly set forth herein, no
Agent shall have any duties or responsibilities hereunder in its capacity as
such.

 

10.11.      The Bookrunners and the
Lead Arrangers.  Each Bookrunner and
each Lead Arranger, in its capacity as such, shall have no duties or
responsibilities, and shall incur no liability, under this Agreement and other
Loan Documents.

 

10.12.      Withholding Tax.  To the extent required by any applicable law,
the Administrative Agent may withhold from any interest payment to any Lender
an amount equivalent to any applicable withholding tax.  If any Governmental Authority asserts a claim
that the Administrative Agent did not properly withhold tax from amounts paid
to or for the account of any Lender because the appropriate form was not
delivered or was not properly executed or because such Lender failed to notify
the Administrative Agent of a change in circumstance which rendered the
exemption from, or reduction of, withholding tax ineffective or for any other
reason, such Lender shall indemnify the Administrative Agent fully for all
amounts paid, directly or indirectly, by the Administrative Agent as tax or
otherwise, including any penalties or interest and together with all expenses
(including legal expenses, allocated internal costs and out-of-pocket expenses)
incurred.

 

SECTION 11.  MISCELLANEOUS

 

11.1.        Amendments and
Waivers.  Neither this Agreement, any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 11.1.  The Required Lenders and each Loan Party
party to the relevant Loan Document may, or, with the written consent of the
Required Lenders, the Administrative Agent and each Loan Party party to the
relevant Loan Document may, from time to time, (a) enter into written
amendments, supplements or modifications hereto and to the other Loan Documents
for the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions
as the Required Lenders or the Administrative Agent, as the case may be, may
specify in such instrument, any of the requirements of this Agreement or 

 

62

 

the other Loan
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or
modification shall (i) forgive any principal amount or extend the final
scheduled date of maturity of any Loan, reduce the stated rate of any interest
or fee payable hereunder (except in connection with the waiver of applicability
of any post-default increase in interest rates, which waiver shall be effective
with the consent of the Required Lenders) or extend the scheduled date of any
payment thereof, in each case without the written consent of each Lender
directly affected thereby; (ii) eliminate or reduce the voting rights of
any Lender under this Section 11.1 without the written consent of such
Lender; (iii) reduce any percentage specified in the definition of
Required Lenders, consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement and the other Loan Documents
or release any Guarantor from its obligations under the Guarantee Agreement
(except as otherwise expressly permitted hereunder or under the other Loan
Documents), in each case without the written consent of all Lenders; (v) amend,
modify or waive any provision of Section 4.8(a) or Section 4.8(b) without
the written consent of all Lenders; (vi) amend, modify or waive any
provision of Section 10 without the written consent of each Agent adversely
affected thereby or (vii) amend, modify or waive any provision of Section 11.6
without the written consent of all Lenders if the effect thereof would be to
further restrict the ability of the Lenders to make assignment or sell
participations.  Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the
Lenders and shall be binding upon the Loan Parties, the Lenders, the Agents and
all future holders of the Loans.  In the case
of any waiver, the Loan Parties, the Lenders and the Agents shall be restored
to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other Default or Event of Default, or impair any right consequent thereon.

 

In addition,
notwithstanding the foregoing, this Agreement may be amended with the written
consent of the Administrative Agent, the Borrower and the Lenders providing the
relevant Replacement Loans (as defined below) to permit the refinancing of all
outstanding Loans (“Refinanced Loans”) with a replacement term loan
tranche hereunder (“Replacement Loans”), provided that (a) the
aggregate principal amount of such Replacement Loans shall not exceed the
aggregate principal amount of such Refinanced Loans, (b) the Applicable
Margin for such Replacement Loans shall not be higher than the Applicable
Margin for such Refinanced Loans, (c) the Weighted Average Life to
Maturity of such Replacement Loans shall not be shorter than the Weighted
Average Life to Maturity of such Refinanced Loans at the time of such
refinancing and (d) all other terms applicable to such Replacement Loans
shall be substantially identical to, or less favorable to the Lenders providing
such Replacement Loans than, those applicable to such Refinanced Loans, except
to the extent necessary to provide for covenants and other terms applicable to
any period after the latest final maturity of the Loans in effect immediately
prior to such refinancing.

 

63

 

11.2.        Notices.  All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice,
when received, addressed as follows in the case of Holdings, the Borrower and
the Agents, and as set forth in an administrative questionnaire delivered to
the Administrative Agent in the case of the Lenders, or to such other address
as may be hereafter notified by the respective parties hereto:

 

	
  Holdings:

  	
   

  	
  Protection
  One, Inc.

  
	
   

  	
   

  	
  1035 N. 3rd
  Street, Suite 101

  
	
   

  	
   

  	
  Lawrence, KS
  66044

  
	
   

  	
   

  	
  Attention:
  Darius Nevin

  
	
   

  	
   

  	
  Telecopy:
  (877) 299-0111

  
	
   

  	
   

  	
  Telephone:
  (305) 594-0231

  
	
   

  	
   

  	
   

  
	
  The Borrower:

  	
   

  	
  Protection
  One Alarm Monitoring, Inc.

  
	
   

  	
   

  	
  1035 N. 3rd
  Street, Suite 101

  
	
   

  	
   

  	
  Lawrence, KS
  66044

  
	
   

  	
   

  	
  Attention:
  Darius Nevin

  
	
   

  	
   

  	
  Telecopy:
  (877) 299-0111

  
	
   

  	
   

  	
  Telephone:
  (305) 594-0231

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy
  to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Kirkland &
  Ellis LLP

  
	
   

  	
   

  	
  Attention:
  Louis R. Hernandez

  
	
   

  	
   

  	
  200 East
  Randolph Drive

  
	
   

  	
   

  	
  Chicago,
  Illinois 60601-6636

  
	
   

  	
   

  	
  Telecopy:
  (312)861-2200

  
	
   

  	
   

  	
  Telephone:
  (312)-861-2029

  
	
   

  	
   

  	
   

  
	
  The Administrative Agent:

  	
   

  	
  Bear Stearns
  Corporate Lending Inc.

  
	
   

  	
   

  	
  383 Madison
  Avenue

  
	
   

  	
   

  	
  New York, NY
  10179

  
	
   

  	
   

  	
  Attention:
  Stephen O’Keefe

  
	
   

  	
   

  	
  Telecopy:
  (212) 272-9743

  
	
   

  	
   

  	
  Telephone:
  (212) 272-9430

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy
  to:

  

 

64

 

	
   

  	
   

  	
  Latham &
  Watkins LLP

  Attention: Michele O. Penzer

  885 Third Avenue, Suite 1000

  New York, New York 10022

  Telecopy: (212) 751-4864

  Telephone: (212)-906-1200

  

 

provided
that any notice, request or demand to or upon any Agent or the Lenders shall
not be effective until received.

 

Notices and other
communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative
Agent; provided that the foregoing shall not apply to notices pursuant
to Section 2 unless otherwise agreed by the Administrative Agent and the
applicable Lender.  The Administrative
Agent or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.

 

11.3.        No Waiver; Cumulative
Remedies.  No failure to exercise and
no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers
and privileges herein provided are cumulative and not exclusive of any rights,
remedies, powers and privileges provided by law.

 

11.4.        Survival of
Representations and Warranties.  All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement and
the making of the Loans and other extensions of credit hereunder.

 

11.5.        Payment of Expenses and
Taxes.  The Borrower agrees (a) to
pay or reimburse each Agent for all its reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including the reasonable fees and
disbursements of one counsel to such Agents (together with such other special
or local counsel as such Agents may deem appropriate) and filing and recording
fees and expenses (if any), with statements with respect to the foregoing to be
submitted to the Borrower prior to the Closing Date (in the case of amounts to
be paid on the Closing Date) and from time to time thereafter on a monthly
basis or such other periodic basis as such Agent shall deem appropriate, provided,
however, that the Borrower shall have received an invoice or similar writing
setting forth such charges in reasonable detail prior to the date such amounts
are due, (b) to pay or reimburse each Lender and Agent for all its
out-of-pocket costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other 

 

65

 

documents,
including the fees and disbursements of counsel to each Lender and of counsel
to such Agent, (c) to pay, indemnify, and hold each Lender and Agent
harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes, if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d) to
pay, indemnify, and hold each Lender and Agent and their respective officers,
directors, employees, Affiliates, agents and controlling persons (each, an “Indemnitee”)
harmless from and against any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Loan
Documents and any such other documents, including any of the foregoing relating
to the use of proceeds of the Loans or the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of any
Group Member or any of the Properties or the unauthorized use by Persons of
information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such Persons and
the reasonable fees and expenses of one legal counsel (in addition to such
local and special counsel as the Indemnitees shall deem appropriate) in
connection with claims, actions or proceedings by any Indemnitee against any
Loan Party under any Loan Document (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”); provided, that the
Borrower shall have no obligation hereunder to any Indemnitee with respect to (i) Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee (or any of
its officers, directors, or employees acting within the scope of their duties),
(ii) claims brought solely by one Indemnitee against another, or (iii) special,
exemplary, consequential or punitive damages arising out of the transactions
contemplated hereunder; provided  further, that it is understood
the provisions of clause (d) as to each Lender are not intended to grant
additional rights to Lenders similar to those granted to the Agents under
clause (a) above, the reimbursement of which is intended to be controlled
solely by such clause.  Without limiting
the foregoing, and to the extent permitted by applicable law, the Borrower
agrees not to assert and to cause its Subsidiaries not to assert, and hereby
waives and agrees to cause its Subsidiaries to waive, all rights for
contribution or any other rights of recovery with respect to all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, under or related to Environmental Laws,
that any of them might have by statute or otherwise against any
Indemnitee.  All amounts due under this Section 11.5
shall be payable not later than 10 days after written demand therefor.  Statements payable by the Borrower pursuant
to this Section 11.5 shall be submitted to Darius Nevin (Telephone No. (305)
599-0231) (Telecopy No. (877) 299-0111), at the address of the Borrower
set forth in Section 11.2, or to such other Person or address as may be
hereafter designated by the Borrower in a written notice to the Administrative Agent.  The agreements in this Section 11.5
shall survive repayment of the Loans and all other amounts payable hereunder.

 

66

 

11.6.        Successors and Assigns;
Participations and Assignments.  (a) 
The provisions of this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns permitted
hereby, except that (i) the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender (and any attempted assignment or transfer by the Borrower without
such consent shall be null and void) and (ii) no Lender may assign or
otherwise transfer its rights or obligations hereunder except in accordance
with this Section.

 

(b)   (i)  Subject to the conditions set forth in
paragraph (b)(ii) below, any Lender may assign to one or more Eligible
Assignees (each, an “Assignee”) all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not to be unreasonably withheld) of the Administrative Agent, provided
that no consent of the Administrative Agent shall be required for an assignment
to an Assignee that is an Affiliate of the assigning Lender (other than any
such Affiliate that is a Group Member, a Subsidiary of a Group Member, is
controlled by a Group Member or in which any Equity Interests are beneficially
owned, directly or indirectly, by a Group Member) or that is a Lender, in each
case, immediately prior to giving effect to such assignment.

 

(ii) Assignments shall be subject to the following additional
conditions:

 

(A) except
in the case of an assignment to a Lender, an Affiliate of a Lender or an
Approved Fund or an assignment of the entire remaining amount of the assigning
Lender’s Commitments or Loans, the amount of the Commitments or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $1,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, provided that (1) no
such consent of the Borrower shall be required if an Event of Default has
occurred and is continuing and (2) such amounts shall be aggregated in
respect of each Lender and its Affiliates or Approved Funds, if any;

 

(B) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation
fee of $3,500;

 

(C) the
Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an administrative questionnaire and all appropriate tax forms required
under Section 4.10; and

 

(D) in
the case of an assignment to a CLO, the assigning Lender shall retain the sole
right to approve any amendment, modification or waiver of any provision of this
Agreement and the other Loan Documents, provided that the Assignment and
Assumption between such Lender and such CLO may provide that such Lender will
not, without the consent of such CLO, agree to any amendment, modification or
waiver that 

 

67

 

(1) requires
the consent of each Lender directly affected thereby pursuant to the proviso to
the second sentence of Section 10.1 and (2) directly affects such
CLO.

 

(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified
in each Assignment and Assumption the Assignee thereunder shall be a party
hereto and, to the extent of the interest assigned by such Assignment and
Assumption, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Assumption, be released from its obligations
under this Agreement (and, in the case of an Assignment and Assumption covering
all of the assigning Lender’s rights and obligations under this Agreement, such
Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 4.9, 4.10 and 11.5).  Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 10.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)  The Administrative Agent, acting for this
purpose as an agent of the Borrower, shall maintain at one of its offices a
register for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary. 
The Register shall be available for inspection by the Borrower and any
Lender (with respect to any entry relating to such Lender’s Loans or Commitments),
at any reasonable time and from time to time upon reasonable prior notice.

 

(v)  Upon its receipt of a duly completed
Assignment and Assumption executed by an assigning Lender and an Assignee, the
Assignee’s completed administrative questionnaire (unless the Assignee shall
already be a Lender hereunder), and any written consent to such assignment
required by paragraph (b) of this Section, the Administrative Agent shall
accept such Assignment and Assumption and record the information contained therein
in the Register.  No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.

 

(c)   (i)  Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a “Participant”) in all or a portion of such Lender’s
rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender’s
obligations under this Agreement shall remain unchanged, (B) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations and (C) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in 

 

68

 

connection
with such Lender’s rights and obligations under this Agreement.  Any agreement pursuant to which a Lender
sells such a participation shall provide that such Lender shall retain the sole
right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement
may provide that such Lender will not, without the consent of the Participant,
agree to any amendment, modification or waiver that (1) requires the
consent of each Lender directly affected thereby or requires the consent of
each Lender, in each case pursuant to the proviso to the second sentence of Section 11.1
and (2) directly affects such Participant. 
Subject to paragraph (c)(ii) of this Section, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 4.9 or 4.10
to the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.7(b) as
though it were a Lender, provided such Participant shall be subject to Section 11.7(a) as
though it were a Lender.

 

(ii)  A Participant shall not be
entitled to receive any greater payment under Section 4.9 or 4.10 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower’s prior written consent.  Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 4.10 unless such
Participant complies with Section 4.10(e).

 

(d)  Any Lender may at any time pledge
or assign a security interest in all or any portion of its rights under this
Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall
not apply to any such pledge or assignment of a security interest; provided
that no such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.

 

(e)  The Borrower, upon receipt of
written notice from the relevant Lender, agrees to issue Notes to any Lender
requiring Notes to facilitate transactions of the type described in paragraph (d) above.

 

(f)  Notwithstanding the foregoing, any
Conduit Lender may assign any or all of the Loans it may have funded hereunder
to its designating Lender without the consent of the Borrower or the
Administrative Agent and without regard to the limitations set forth in Section 11.6(b).  Each of Holdings, the Borrower, each Lender
and the Administrative Agent hereby confirms that it will not institute against
a Conduit Lender or join any other Person in instituting against a Conduit
Lender any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding under any state bankruptcy or similar law, for one year and one day
after the payment in full of the latest maturing commercial paper note issued
by such Conduit Lender; provided, however, that each Lender designating
any Conduit Lender hereby agrees to indemnify, save and hold harmless each
other party hereto for any loss, cost, damage or expense arising out of its
inability to institute such a proceeding against such Conduit Lender during
such period of forbearance.

 

69

 

11.7.        Adjustments; Set-off.  (a)  Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular
Lender, if any Lender (a “Benefited Lender”) shall receive any payment
of all or part of the Obligations owing to it, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 9(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits
of any such collateral, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such Benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.

 

(b)   Upon the occurrence and during
the continuance of any Event of Default, in addition to any rights and remedies
of the Lenders provided by law, each Lender shall have the right, without prior
notice to Holdings or the Borrower, any such notice being expressly waived by
Holdings and the Borrower to the extent permitted by applicable law, upon any
amount becoming due and payable by Holdings or the Borrower hereunder (whether
at the stated maturity, by acceleration or otherwise), to set off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final, other than payroll accounts, tax
withholding accounts and trust accounts), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency thereof to or for the credit or
the account of Holdings or the Borrower, as the case may be.  Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.

 

11.8.        Counterparts.  This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument.  Delivery of an
executed signature page of this Agreement by facsimile transmission shall
be effective as delivery of a manually executed counterpart hereof.  A set of the copies of this Agreement signed
by all the parties shall be lodged with the Borrower and the Administrative
Agent.

 

11.9.        Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

11.10.      Integration.  This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrower, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or

 

70

 

warranties by any
Agent or any Lender relative to subject matter hereof not expressly set forth
or referred to herein or in the other Loan Documents.

 

11.11.      GOVERNING
LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

11.12.      Submission To
Jurisdiction; Waivers.  Each of
Holdings and the Borrower hereby irrevocably and unconditionally:

 

(a)   submits for itself and its
property in any legal action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for recognition and enforcement
of any judgment in respect thereof, to the non-exclusive general jurisdiction
of the courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;

 

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

 

(c)   agrees that service of process
in any such action or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to Holdings or the Borrower, as the case may be at its address
set forth in Section 11.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

(d)   agrees that nothing herein
shall affect the right to effect service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction; and

 

(e)   waives, to the maximum extent
not prohibited by law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any special, exemplary,
punitive or consequential damages.

 

11.13.      Acknowledgments.  Each of Holdings and the Borrower hereby
acknowledges that:

 

(a)   it has been advised by counsel
in the negotiation, execution and delivery of this Agreement and the other Loan
Documents;

 

(b)   no Agent or Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising out of
or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Agents and Lenders, on the one hand, and Holdings
and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and

 

71

 

(c)   no joint venture is created
hereby or by the other Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among Holdings, the
Borrower and the Lenders.

 

11.14.      Releases of Guarantees
(a) . 
(a)  Notwithstanding anything to the contrary contained herein or
in any other Loan Document, the Administrative Agent is hereby irrevocably
authorized by each Lender (without requirement of notice to or consent of any
Lender except as expressly required by Section 11.1) to take any action
requested by the Borrower having the effect of releasing any guarantee
obligations (i) to the extent necessary to permit consummation of any
transaction not prohibited by any Loan Document or that has been consented to
in accordance with Section 11.1 or (ii) under the circumstances
described in paragraph (b) below.

 

(b)   At such time as the Loans and
the other obligations under the Loan Documents (excluding contingent
indemnification obligations for which no claims have been made) shall have been
paid in full and the Commitments have been terminated, the Guarantee Agreement
and all obligations (other than those expressly stated to survive such
termination) of the Administrative Agent and each Loan Party under the
Guarantee Agreement shall terminate, all without delivery of any instrument or
performance of any act by any Person.

 

11.15.      Confidentiality.  Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party or the
Sponsor pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or
any Lender from disclosing any such information (a) to any Agent, any
other Lender or any Affiliate of any of them, (b) subject to an agreement
to comply with the provisions of this Section, to any actual or prospective
Transferee or any direct or indirect counterparty to any agreement with respect
to Hedging Obligations (or any professional advisor to such counterparty), (c) to
its employees, directors, agents, attorneys, accountants and other professional
advisors or those of any of its Affiliates, (d) upon the request or demand
of any Governmental Authority, (e) in response to any order of any court
or other Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (f) if requested or required to do so in connection
with any litigation or similar proceeding, (g) that has been publicly
disclosed (except pursuant to a breach of the confidentiality obligations of
this Section 11.15), (h) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender’s investment
portfolio in connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any other Loan
Document;  provided, unless
specifically prohibited by applicable law or court order, each Lender shall
make reasonable efforts to notify the Borrower of any request by any
Governmental Authority or representative thereof (other than any such request
in connection with any examination of the financial condition or other routine
examination of such Lender by such Governmental Authority) for disclosure of
any such non-public information prior to disclosure of such information.

 

72

 

11.16.      WAIVERS
OF JURY TRIAL.  HOLDINGS, THE BORROWER, THE AGENTS AND THE
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND
FOR ANY COUNTERCLAIM THEREIN.

 

11.17.      Delivery of Addenda.  Each initial Lender shall become a party to
this Agreement by delivering to the Administrative Agent an Addendum duly
executed by such Lender.

 

11.18.      USA PATRIOT Act.  Each Lender hereby notifies the Borrower that
pursuant to the requirements of the USA PATRIOT Act (Title III of Publ. L.
107-56 (signed into law October 26, 2001)), (the “Patriot Act”),
and the Lenders’ policies and practices, it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
name and address of the Borrower and other information that will allow such
Lender to identify the Borrower in accordance with the Patriot Act.

 

73

 

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

 

	
   

  	
  PROTECTION
  ONE, INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Eric Griffin

  
	
   

  	
    Name: J. Eric Griffin

  
	
   

  	
    Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PROTECTION
  ONE ALARM MONITORING, 

  INC.,

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ J. Eric Griffin

  
	
   

  	
    Name: J. Eric Griffin

  
	
   

  	
    Title: Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR, STEARNS & CO. INC., as a
  Lead Arranger 

  and as a Bookrunner

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence B. Alletto

  
	
   

  	
    Name: Lawrence B. Alletto

  
	
   

  	
    Title: Senior Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LEHMAN BROTHERS INC., as a Lead Arranger, 

  a Bookrunner and as Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Ogden

  
	
   

  	
    Name: Jeff Ogden

  
	
   

  	
    Title: Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEAR STEARNS CORPORATE LENDING INC.,

  as Administrative Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Lawrence B. Alletto

  
	
   

  	
    Name: Lawrence B. Alletto

  
	
   

  	
    Title: Senior Managing Director

  

 

74Exhibit 10.1

 

LEASE, DEED OF TRUST AND 

SECURITY AGREEMENT

Dated as of MARCH 14, 2008

among

SILICON LABORATORIES INC.,

as Lessee

and

BA LEASING BSC, LLC,

as Lessor

and

GARY S. FARMER,

as the Deed of Trust Trustee pursuant to Section 24.2 hereof

 

This Lease, Deed of Trust and Security Agreement has
been executed in multiple counterparts. 
To the extent, if any, that this Lease, Deed of Trust and Security
Agreement constitutes chattel paper (as such term is defined in the Uniform
Commercial Code as in effect in any applicable jurisdiction), no lien on this
Lease, Deed of Trust and Security Agreement may be created through the transfer
or possession of any counterpart hereof other than counterpart “Number 1,”
which shall be identified as the counterpart containing the receipt therefor
executed by Wells Fargo Bank Northwest, National Association, as Collateral
Agent, on or following the signature page thereof.

 

This counterpart is [not]
the original counterpart.

 

 

TABLE
OF CONTENTS

 

	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  LEASE OF LEASED PROPERTY; LEASE TERM

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Leased Property

  	
   

  	
  2

  
	
  Section 2.2.

  	
   

  	
  Term

  	
   

  	
  2

  
	
  Section 2.3.

  	
   

  	
  Title

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  PAYMENT OF RENT

  	
   

  	
  2

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Rent

  	
   

  	
  2

  
	
  Section 3.2.

  	
   

  	
  Payment of Basic Rent

  	
   

  	
  2

  
	
  Section 3.3.

  	
   

  	
  Supplemental Rent

  	
   

  	
  3

  
	
  Section 3.4.

  	
   

  	
  Method of Payment

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  QUIET ENJOYMENT; RIGHT TO INSPECT

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Non-Interference

  	
   

  	
  4

  
	
  Section 4.2.

  	
   

  	
  Inspection and Reports

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  NET LEASE, ETC.

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1.

  	
   

  	
  Net Lease, Etc.

  	
   

  	
  5

  
	
  Section 5.2.

  	
   

  	
  No Termination or Abatement

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VI

  	
   

  	
  ASSIGNMENTS, SUBLEASES AND DELEGATIONS

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1.

  	
   

  	
  Assignment and Subletting

  	
   

  	
  6

  
	
  Section 6.2.

  	
   

  	
  Assignment of Related Agreements

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII

  	
   

  	
  LESSEE ACKNOWLEDGEMENTS

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1.

  	
   

  	
  CONDITION OF THE LEASED PROPERTY

  	
   

  	
  8

  
	
  Section 7.2.

  	
   

  	
  Risk of Loss

  	
   

  	
  9

  
	
  Section 7.3.

  	
   

  	
  Certain Duties and Responsibilities of Lessor

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII

  	
   

  	
  POSSESSION AND USE OF THE PROPERTY, ETC.

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1.

  	
   

  	
  Possession and Use of the Leased Property

  	
   

  	
  9

  
	
  Section 8.2.

  	
   

  	
  Compliance with Requirements of Law and Insurance
  Requirements

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IX

  	
   

  	
  MAINTENANCE AND REPAIR; REPORTS

  	
   

  	
  10

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 9.1.

  	
   

  	
  Maintenance

  	
   

  	
  10

  
	
  Section 9.2.

  	
   

  	
  Maintenance Costs and Warranties

  	
   

  	
  11

  

 

 

	
  Section 9.3.

  	
   

  	
  Lessor Not Obligated to Maintain or Repair

  	
   

  	
  11

  
	
  Section 9.4.

  	
   

  	
  Maintenance and Repair Reports

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE X

  	
   

  	
  MODIFICATIONS, ETC.

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XI

  	
   

  	
  COVENANTS WITH RESPECT TO LIENS AND EASEMENTS

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 11.1.

  	
   

  	
  Covenants with Respect to Liens

  	
   

  	
  14

  
	
  Section 11.2.

  	
   

  	
  Lessee’s Grants and Releases of Easements; Lessor’s
  Waivers

  	
   

  	
  15

  
	
  Section 11.3.

  	
   

  	
  Permitted Contests in Respect of Applicable Laws

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XII

  	
   

  	
  PERMITTED CONTESTS

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 12.1.

  	
   

  	
  Permitted Contests in Respect of Applicable Laws

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIII

  	
   

  	
  INSURANCE

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 13.1.

  	
   

  	
  Required Coverages

  	
   

  	
  17

  
	
  Section 13.2.

  	
   

  	
  Insurance Coverage

  	
   

  	
  17

  
	
  Section 13.3.

  	
   

  	
  Delivery of Insurance Certificates

  	
   

  	
  18

  
	
  Section 13.4.

  	
   

  	
  Insurance by Lessor, Collateral Agent or any Lender

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIV

  	
   

  	
  CASUALTY AND CONDEMNATION

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 14.1.

  	
   

  	
  Casualty and Condemnation

  	
   

  	
  18

  
	
  Section 14.2.

  	
   

  	
  Environmental Matters

  	
   

  	
  20

  
	
  Section 14.3.

  	
   

  	
  Notice of Environmental Matters

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XV

  	
   

  	
  TERMINATION OF LEASE

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 15.1.

  	
   

  	
  Termination upon Certain Events; Lessee Assumption
  of Related Agreements

  	
   

  	
  21

  
	
  Section 15.2.

  	
   

  	
  Termination Procedures

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVI

  	
   

  	
  EVENTS OF DEFAULT

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 16.1.

  	
   

  	
  Events of Default

  	
   

  	
  22

  
	
  Section 16.2.

  	
   

  	
  Remedies

  	
   

  	
  25

  
	
  Section 16.3.

  	
   

  	
  Waiver of Certain Rights

  	
   

  	
  28

  
	
  Section 16.4.

  	
   

  	
  Deed of Trust Remedies

  	
   

  	
  28

  
	
  Section 16.5.

  	
   

  	
  Limitation on Recourse

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVII

  	
   

  	
  LESSOR’S RIGHT TO CURE

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 17.1.

  	
   

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

  	
   

  	
  29

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XVIII

  	
   

  	
  PURCHASE PROVISIONS

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 18.1.

  	
   

  	
  Early Termination Options

  	
   

  	
  30

  

 

ii

 

	
  Section 18.2.

  	
   

  	
  Acceleration of Subject Property Purchase

  	
   

  	
  30

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XIX

  	
   

  	
  END OF TERM OPTIONS

  	
   

  	
  31

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 19.1.

  	
   

  	
  End of Term Options

  	
   

  	
  31

  
	
  Section 19.2.

  	
   

  	
  Election of Options

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XX

  	
   

  	
  SALE OPTION

  	
   

  	
  32

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 20.1.

  	
   

  	
  Sale Option Procedures

  	
   

  	
  32

  
	
  Section 20.2.

  	
   

  	
  Certain Obligations Continue

  	
   

  	
  35

  
	
  Section 20.3.

  	
   

  	
  Failure to Sell Subject Property

  	
   

  	
  35

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXI

  	
   

  	
  PROCEDURES RELATING TO PURCHASE OR SALE OPTION

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 21.1.

  	
   

  	
  Provisions Relating to Conveyance of the Subject
  Property Upon Purchase by the Lessee, Sales or Certain Other Events

  	
   

  	
  37

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXII

  	
   

  	
  ACCEPTANCE OF SURRENDER

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 22.1.

  	
   

  	
  Acceptance of Surrender

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXIII

  	
   

  	
  NO MERGER OF TITLE

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 23.1.

  	
   

  	
  No Merger of Title

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXIV

  	
   

  	
  INTENT OF THE PARTIES

  	
   

  	
  40

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 24.1.

  	
   

  	
  Nature of Transaction

  	
   

  	
  40

  
	
  Section 24.2.

  	
   

  	
  Liens and Security Interests

  	
   

  	
  42

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE XXV

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  46

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 25.1.

  	
   

  	
  Survival; Severability; Etc.

  	
   

  	
  46

  
	
  Section 25.2.

  	
   

  	
  Amendments and Modifications

  	
   

  	
  46

  
	
  Section 25.3.

  	
   

  	
  No Waiver

  	
   

  	
  47

  
	
  Section 25.4.

  	
   

  	
  Notices

  	
   

  	
  47

  
	
  Section 25.5.

  	
   

  	
  Successors and Assigns

  	
   

  	
  47

  
	
  Section 25.6.

  	
   

  	
  Headings and Table of Contents

  	
   

  	
  47

  
	
  Section 25.7.

  	
   

  	
  Counterparts

  	
   

  	
  47

  
	
  Section 25.8.

  	
   

  	
  Governing Law

  	
   

  	
  47

  
	
  Section 25.9.

  	
   

  	
  Original Lease

  	
   

  	
  47

  
	
  Section 25.10.

  	
   

  	
  The Deed of Trust Trustee

  	
   

  	
  47

  
	
  Section 25.11.

  	
   

  	
  Limitations on Recourse

  	
   

  	
  48

  
	
  Section 25.12.

  	
   

  	
  Recordation of Memorandum of Lease

  	
   

  	
  48

  

 

 

iii

 

	
  SCHEDULES

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE 10.1

  	
   

  	
  —

  	
   

  	
  Modifications

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  —

  	
   

  	
  Legal Description of Land

  
	
  EXHIBIT B

  	
   

  	
  —

  	
   

  	
  Memorandum of Lease, Deed of Trust and Security
  Agreement

  
	
  Exhibit C

  	
   

  	
  —

  	
   

  	
  Form of Subordination, Non-Disturbance and
  Attornment Agreement

  
	
  Exhibit D

  	
   

  	
  —

  	
   

  	
  CSC Sublease

  

 

iv

 

 

 

LEASE,
DEED OF TRUST AND SECURITY AGREEMENT

 

This Lease, Deed of Trust and Security Agreement dated
as of March 14, 2008 (as amended, supplemented, or otherwise modified from
time to time, this “Lease”), among
BA LEASING BSC, LLC, a Delaware limited liability company, having its principal
office at One Financial Plaza, 2nd Floor, Mail Code:  RI1-537-02-02,
Providence, Rhode Island  02903, as Lessor (“Lessor”)
and SILICON LABORATORIES INC., a Delaware corporation, having its principal
office at 400 West Cesar Chavez Street, Suite 600, Austin, Texas 78701, as
Lessee (“Lessee”), and GARY S. FARMER, a
resident of Travis County, Texas, as the Deed of Trust Trustee for the use and
benefit of the Lessor, whose office is located at 401 Congress Avenue, Suite 1500,
Austin, Texas  78701 (the “Deed of Trust Trustee”).

 

W
I T N E S S E T H:

 

                A.            The
parties are entering into the Operative Documents pursuant to which the
Participants agree to provide financing for the acquisition of the Leased
Property.

 

                B.            On
the Closing Date, Lessor, solely using the Lessor Amount and the Advance funded
by the Lenders, will, inter alia, (i) purchase
the Facility from the Seller and (ii) assume all of the Seller’s right,
title and interest in and to (A) the Ground Lease pursuant to the Assignment
of Ground Lease, (B) the Related Agreements which constitute leases
pursuant to the Assignment of Subleases, and (C) the other Related
Agreements pursuant to the Assignment of Related Agreements.

 

                C.            Pursuant
to this Lease, Lessor will lease the Leased Property to Lessee and Lessee will
lease the Leased Property from Lessor.

 

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

 

ARTICLE I

DEFINITIONS

 

For all purposes hereof, the capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in
Appendix 1 to that certain Participation Agreement dated as of even date herewith,
among Lessee, as Lessee; Lessor; Wells Fargo Bank Northwest, National
Association, not in its individual capacity except as expressly stated therein,
but solely as Collateral Agent; and the financial institutions listed on
Schedule II thereto, as Lenders (as amended, supplemented or otherwise
modified from time to time pursuant thereto, the “Participation
Agreement”); and the rules of interpretation set forth in
Appendix 1 to the Participation Agreement shall apply to this Lease.  Except as otherwise expressly provided in Section 16.5
hereof, all obligations imposed on the Lessee under this Lease shall be the
full recourse liability of Lessee.

 

 

ARTICLE II

LEASE OF LEASED PROPERTY; LEASE TERM

 

                Section 2.1.       Leased
Property.  (a) Lessor
hereby agrees to lease all of Lessor’s interest in the Leased Property to
Lessee hereunder, and Lessee hereby agrees, expressly for the direct benefit of
Lessor, to lease all of the Leased Property from Lessor for the Term.  The Lessor and the Lessee acknowledge that the
Lessee shall be purchasing certain equipment directly from the Seller and none
of such equipment purchased by Lessee shall be deemed part of the Leased
Property.

 

                (b)       In the event that the Retail Sublease is
terminated for any reason whatsoever, Lessee and Lessor hereby agree that this
Lease and the Memorandum thereof and the Participation Agreement shall be
amended by the parties hereto, at the expense of the Lessee, to include within
the definition of “Leased Property” all Improvements under the Retail Sublease.

 

                Section 2.2.       Term.  Unless earlier terminated, the term of the
Lease shall consist of a term (the “Term”)
commencing on the Closing Date and ending on but not including the earlier of (a) the
date which is sixty months immediately following the Closing Date or (b) any
Termination Date.

 

                Section 2.3.       Title.  The Leased Property is leased to the Lessee
without any representation or warranty, express or implied, by the Lessor and
subject to the rights of parties in possession, the existing state of title
with respect thereto (including, without limitation, all Liens other than
Lessor Liens) and all Applicable Laws and any violations thereof.  The Lessee shall in no event have any
recourse against the Lessor for any defect in or exception to title to the
Leased Property other than resulting from Lessor Liens created by Lessor.

 

ARTICLE III

PAYMENT OF RENT

 

                Section 3.1.       Rent.  (a) During the Term, the Lessee shall
pay to Lessor Basic Rent (i) on each Payment Date and (ii) on the
date required under Section 20.1(i) in connection with the Lessee’s
exercise of the Sale Option.

 

                (b)       The Lessee’s inability or failure to take
possession of all or any portion of the Leased Property when accepted or deemed
accepted hereunder, whether or not attributable to any act or omission of the
Lessee or any act or omission of the Lessor, shall not delay or otherwise
affect the Lessee’s obligation to pay Rent in accordance with the terms of this
Lease.

 

                Section 3.2.       Payment of
Basic Rent.  Basic Rent shall
be paid absolutely net to the Lessor so that this Lease shall yield to the
Lessor the full amount thereof, without setoff, deduction or reduction.

 

2

 

                Section 3.3.       Supplemental
Rent.  The Lessee shall pay to
the Lessor or the Person entitled thereto any and all Supplemental Rent
promptly as the same shall become due and payable, and if the Lessee fails to
pay any Supplemental Rent, the Lessor shall have all rights, powers and
remedies provided for herein or by law or equity or otherwise in the case of
nonpayment of Basic Rent; provided that
Supplemental Rent (other than Supplemental Rent payable to the Lessor, any
Lender, the Collateral Agent or the Person entitled thereto consisting of any
of the Lease Balance, the Sale Option Recourse Amount, the Purchase Amount,
Break Costs and any amounts payable at the Overdue Rate and any amounts payable
under Article XIII of the Participation Agreement) shall not be deemed due
and payable by Lessee to the Person entitled thereto unless such amount is not
paid within 30 days after Lessee has received written notice of such
Supplemental Rent from Lessor, any Lender or the Collateral Agent or the Person
entitled thereto.  Lessee shall pay to the
Lessor, as Supplemental Rent, among other things, on demand, to the extent
permitted by Applicable Laws, interest at the applicable Overdue Rate on any
installment of Basic Rent not paid when due for the period for which the same
shall be overdue and on any payment of Supplemental Rent payable to the Lessor
or any Indemnitee not paid when due and payable as provided above for the
period from the due date until the same shall be paid.  The expiration or other termination of the
Lessee’s obligations to pay Basic Rent hereunder shall not limit or modify the
obligations of the Lessee with respect to Supplemental Rent.  Unless expressly provided otherwise in this
Lease, in the event of any failure on the part of the Lessee to pay and
discharge any Supplemental Rent as and when due, the Lessee shall also promptly
pay and discharge any fine, penalty, interest or cost which may be assessed or
added under any agreement with a third party for nonpayment or late payment of
such Supplemental Rent, all of which shall also constitute Supplemental Rent.

 

                Section 3.4.       Method of
Payment.  Subject to Section 3.1(b) hereof,
each payment of Rent shall be paid by wire transfer by the Lessee to the
Collateral Agent (or in the case of Excepted Payments directly to the Person
entitled thereto) prior to 1:00 P.M., New York City time, to the account
of the Collateral Agent designated on Schedule III to the Participation
Agreement in funds consisting of lawful currency of the United States of
America which shall be immediately available on the scheduled date when such
payment shall be due, unless such scheduled date shall not be a Business Day,
in which case such payment shall be made on the next succeeding Business Day
unless the result of such extension would be to carry into another calendar
month, in which case such payment shall be made on the immediately preceding
Business Day.  Payments received after
1:00 P.M., New York City time, on the date due shall, for the purpose of Section 16.1
hereof, be deemed received on such day; provided, however, that
for the purposes of the second sentence of Section 3.3 hereof, such
payments shall be deemed received on the next succeeding Business Day and
subject to interest at the Overdue Rate as provided in such Section 3.3.

 

3

 

ARTICLE IV

QUIET ENJOYMENT; RIGHT TO INSPECT

 

                Section 4.1.       Non-Interference.  Subject to Section 4.2 hereof and
subject to Lessor’s cure rights, as provided for in Section 17.1 and the
rights of Ground Lessor under the Ground Lease and the parties under the other
Related Agreements, the CSC Sublease and any Fifth Floor Sublease, Lessor
covenants that it will not interfere in Lessee’s use or possession of the
Leased Property during the Term, so long as no Event of Default has occurred
and is continuing, it being agreed that Lessee’s remedies for breach of the
foregoing covenant shall be limited to a claim for damages or the commencement
of proceedings to enjoin such breach, as applicable.  Such right is independent of and shall not
affect Lessee’s obligations hereunder and under the other Operative Documents
or Lessor’s rights otherwise to initiate legal action to enforce the
obligations of Lessee under this Lease. 
The foregoing covenant shall not require Lessor to take any action
contrary to, or which would permit Lessee to use the Leased Property for a use
not permitted under the provisions of this Lease.

 

                Section 4.2.       Inspection
and Reports.  (a) Upon
three (3) Business Days prior notice (such notice being waived by Lessee
during the existence of an Event of Default) to Lessee and subject to the
provisions of Section 16.15 of the Participation Agreement, Lessor or the
Collateral Agent (collectively, the “Inspecting Parties”)
at any time during the Term may inspect (i) the Leased Property and (ii) the
Leased Property Records and make copies and abstracts therefrom and may discuss
the affairs, finances and accounts with respect to the Leased Property with
Lessee’s officers.  All such inspections
shall be during Lessee’s normal business hours, shall be subject to Lessee’s
customary safety and security provisions and shall be at the expense and risk
of the Inspecting Parties, except that if an Event of Default or Default has
occurred and is continuing and, subject to Section 16.5 hereof, Lessee
shall reimburse the Inspecting Parties for the reasonable costs of such
inspections and, except for the Inspecting Party’s gross negligence or willful
misconduct, such inspection shall be at Lessee’s risk.  No inspection shall unreasonably interfere
with Lessee’s operations.  None of the
Inspecting Parties shall have any duty to make any such inspection or
inquiry.  None of the Inspecting Parties
shall incur any liability or obligation by reason of making any such inspection
or inquiry unless and to the extent such Inspecting Party causes damage to the
Leased Property or any property of Lessee or any other Person during the course
of such inspection.

 

                (b)       To the extent permissible under
Applicable Laws, during the Term Lessee shall prepare and file, or cause to be
prepared and filed, in a timely fashion, or, where Lessor shall be required to
file, Lessee shall prepare, or cause to be prepared, and make available to
Lessor within a reasonable time period prior to the date for filing and Lessor
shall file, any reports with respect to the condition or operation of the
Leased Property that shall be required to be filed with any Governmental
Authority.

 

4

 

ARTICLE V

NET LEASE, ETC.

 

                Section 5.1.       Net Lease,
Etc.  This Lease shall
constitute a net lease and Lessee’s obligations hereunder to pay Rent shall be
absolute and unconditional under any and all circumstances.  Any present or future law to the contrary
notwithstanding, this Lease shall not terminate, nor shall the Lessee be
entitled to any abatement, suspension, deferment, reduction, setoff,
counterclaim, or defense with respect to the Rent, nor shall the obligations of
the Lessee hereunder be affected (except as expressly herein permitted and by
performance of the obligations in connection herewith) by reason of: (i) any
defect in the condition, merchantability, design, construction, quality or
fitness for use of the Subject Property or any part thereof, or the failure of
the Subject Property or any part thereof to comply with all Applicable Laws,
including any inability to use the Subject Property or any part thereof by
reason of such non-compliance; (ii) any damage to, removal, abandonment,
salvage, loss, contamination of, or Release from, scrapping or destruction of
or any requisition or taking of the Subject Property or any part thereof; (iii) any
restriction, prevention or curtailment of or interference with any use of the
Subject Property or any part thereof or any termination of the Ground Lease; (iv) any
defect in title to or rights to the Subject Property or any part thereof or any
Lien on such title or rights or on the Subject Property, the CSC Sublease, any
Fifth Floor Sublease or any part thereof (provided, that the foregoing shall
not relieve any Person from its responsibility to remove Lessor Liens
attributable to it); (v) any change, waiver, extension, indulgence or
other action or omission or breach in respect of any obligation or liability of
or by the Lessor, the Collateral Agent or any Lender; (vi) to the fullest
extent permitted by Applicable Laws, any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to the Lessee, the Lessor, the Collateral Agent, any
Lender or any other Person, or any action taken with respect to this Lease by
any trustee or receiver of the Lessee, the Lessor, the Collateral Agent, any
Lender or any other Person, or by any court, in any such proceeding; (vii) any
claim that the Lessee has or might have against any Person, including without
limitation any Participant, or any sublessee, vendor, manufacturer, contractor
of or for the Subject Property or any part thereof; (viii) any failure on
the part of the Lessor to perform or comply with any of the terms of this
Lease, of any other Operative Document or of any other agreement; (ix) any
invalidity or unenforceability or illegality or disaffirmance of this Lease
against or by the Lessee or any provision hereof or any of the other Operative
Documents or any provision of any thereof; (x) the impossibility or
illegality of performance by the Lessee, the Lessor or both; (xi) any action by
any court, administrative agency or other Governmental Authority;
(xii) any restriction, prevention or curtailment of or interference with
the use of the Subject Property or any part thereof; (xiii) the failure of
Lessee or any of its Affiliates to achieve any accounting or tax benefits or
the characterization of the transaction intended by the parties as set forth at
Section 24.1 hereof and Section 5.1 of the Participation Agreement;
(xiv) any act or omission of any sublessee under any sublease entered into by
Lessee or the assertion of any claims or liens or the exercise of any rights or
remedies of any such sublessee; or (xv) any other cause or circumstances
whether similar or dissimilar to the foregoing and whether or not the Lessee
shall have notice or knowledge of any of the foregoing.  The Lessee’s agreement in the preceding
sentence shall not affect any claim, action or right the Lessee may have against
any Person.  The parties intend that the
obligations of the Lessee hereunder shall be covenants and agreements that are
separate and independent from any obligations of the Lessor hereunder or under
any other Operative Documents and the obligations of the Lessee shall continue
unaffected unless such obligations shall have been modified or terminated in
accordance with an express provision of this Lease.

 

5

 

                Section 5.2.       No
Termination or Abatement.  The
Lessee shall remain obligated under this Lease in accordance with its terms and
the terms of the other Operative Documents and shall not take any action to
terminate, rescind or avoid this Lease (except as provided herein) to the
fullest extent permitted by Applicable Laws, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting the Lessor, the Collateral Agent or any Lender, or any
action with respect to this Lease which may be taken by any trustee, receiver
or liquidator of the Lessor, the Collateral Agent or any Lender or by any court
with respect to the Lessor, the Collateral Agent or any Lender.  The Lessee hereby waives all right to
terminate or surrender this Lease (except as provided herein) or to avail
itself of any abatement, suspension, deferment, reduction, setoff, counterclaim
or defense with respect to any Rent.  The
Lessee shall remain obligated under this Lease in accordance with its terms and
the terms of the other Operative Documents and the Lessee hereby waives any and
all rights now or hereafter conferred by statute or otherwise to modify or to
avoid strict compliance with its obligations under this Lease.  Notwithstanding any such statute or
otherwise, the Lessee shall be bound by all of the terms and conditions
contained in this Lease.

 

ARTICLE VI

ASSIGNMENTS, SUBLEASES AND DELEGATIONS

 

                Section 6.1.       Assignment
and Subletting.  Except for
assignments and subleases permitted by this Article VI, Lessee, during the
Term, may not assign, sublease, mortgage, pledge or otherwise transfer to any
Person, at any time, in whole or in part, any of its right, title or interest
in, or obligations to or under this Lease, any other Operative Document or to
any portion of the Leased Property; provided that
so long as no Event of Default has occurred and is continuing, Lessee may,
without the consent of the Collateral Agent, the Lessor or the Lenders, (i) assign
all, but not less than all, of its rights in the Operative Documents to any
Affiliate of Lessee and (ii) sublease all or any part of its rights, title
and interest in the Leased Property to any Person; provided
further that:  (a) no
sublease or assignment shall in any way discharge or diminish any of the
obligations of Lessee to Lessor, the Collateral Agent or any Lender under any
Operative Document; (b) Lessee shall remain directly and primarily liable
under this Lease and any Operative Documents to which Lessee is a party with
respect to all the Leased Property; (c) each such sublease and assignment
of the Leased Property shall be made expressly subject to and subordinated to
this Lease and to the rights of Lessor, the Collateral Agent and the Lenders (provided that (1) the limitation in clause (c) above
shall not apply to the CSC Sublease or any Fifth Floor Sublease with an
Eligible Sublessee and (2) with respect to the CSC Sublease and any Fifth
Floor Sublease with an Eligible Sublessee, the Lessor and Collateral Agent
shall enter into a Subordination, Non-Disturbance and Attornment Agreement (“SNDA”) in form and substance as set forth in Exhibit C
hereto; and (d) except with respect to one floor of  the CSC Sublease which may extend for a term
ending on March 14, 2016, each such sublease and assignment shall
expressly provide for the termination prior to the last day of the Term (unless
otherwise agreed and consented to by the Lessor); provided
further that Lessee shall not assign or sublease any portion of the
Leased Property to, or permit the assignment or the sublease of any portion of
the Leased Property by, any Person who at the time of such sublease or
assignment shall then be the subject of any proceeding for relief under any
bankruptcy or insolvency  law or laws
relating to the relief of debtors provided, further,
that Lessee may not exercise and enforce any rights or remedies under the CSC
Sublease or any Fifth Floor Sublease, against any Person or related party under
the CSC Sublease or the Fifth Floor Sublease or amend, supplement, waive,
extend, restate or otherwise modify any CSC Sublease or any Fifth Floor
Sublease if such exercise or enforcement of rights or remedies or amendment,
supplement, waiver, restatement or modification (i) would cause a
violation of any of Lessee’s obligations under this Lease or the other Operative
Documents, (ii) would increase any of the Lessor’s obligations under any
Operative Document, (iii) would have a Material Adverse Effect, or (iv) would
reduce the rent under the CSC Sublease or the Fifth Floor Sublease.

 

6

 

Notwithstanding the
foregoing or any provision of this Lease or any of the Operative Documents to
the contrary, (A) Lessee shall have the right to sublease any portion of
the Leased Premises (including the fifth floor of the Facility) to any Person
without the consent of Lessor, Collateral Agent or the Participants provided
that such sublease complies with the preceding provisions of clause (ii) of
this Section 6.1 and (B) if Lessor does not enter into an SNDA in
connection with any such sublease, such sublease shall be excluded from the
definition of “Fifth Floor Sublease” as such term is used in the Operative
Documents.

 

Lessee shall give Lessor prompt written notice of any
assignment or sublease permitted under this Article VI, and shall promptly
provide Lessor with a fully executed copy of each document evidencing such
assignment or sublease.

 

Unless (a) an Event of Default has occurred and
is continuing and Lessee receives written notice from Lessor or the Collateral
Agent directing Lessee to pay to Collateral Agent any rents, issues, revenues,
profits or other income (including all deposits of money as advanced rent or
for security) received by Lessee under any sublease or (b) an Event of
Default set forth in Section 16.1(g) has occurred, Lessee shall have
the right to retain, use and enjoy such income, and upon the cure of any such
Event of Default, Lessee shall resume the right to receive, retain, use and
enjoy such income.

 

Section 6.2.           Assignment
of Related Agreements.  Lessor and Lessee acknowledge
that effective as of the Closing Date, Seller has assigned to Lessor and
delegated to Lessor, and Lessor has assumed, all obligations on the part of
Seller under the Related Agreements, or the Related Agreements have been
assigned to Lessor by operation of law upon its acquisition of title to the
Land.  Additionally, during the Term, to
the extent permitted by the Related Agreements, Lessor hereby assigns to Lessee
all rights and benefits conferred to Lessor under the Related Agreements,
including without limitation all rights to receive rent or other payments by
any sublessees or to enforce any rights and remedies against each Person that
is a party to the Related Agreements. 
Lessee hereby assumes and agrees to perform all obligations of the
Lessor under the Related Agreements pursuant to Section 9.1(h) of the
Participation Agreement and to diligently enforce any rights and remedies
against each Person or related party under the Related Agreements.  Lessor further grants to Lessee the right to
grant or withhold any consents, waivers, extensions, and indulgences under the
Related Agreements and to amend, supplement, restate, and otherwise make
modifications to the Related Agreements as Lessee may determine to be necessary
or appropriate in Lessee’s sole discretion. 
Notwithstanding the foregoing, Lessee may not exercise and enforce any
such rights or remedies against such Person or related party under the Related
Agreements or amend, supplement, waive, extend, restate or otherwise modify the
Related Agreements if such exercise or enforcement of rights or remedies or
amendment, supplement, waiver, extension, restatement or modification (i) would
cause a violation of any of Lessee’s obligations under this Lease or the other
Operative Documents, (ii) would increase any of the Lessor’s obligations
under any Operative Document, or (iii) would have a Material Adverse
Effect.  

 

 

7

 

Lessor hereby constitutes
Lessee as the agent and attorney-in-fact of Lessor for the purpose of
exercising and enforcing, and with full right, power and authority to perform
the obligations of Lessor and to exercise and to enforce, all of the right,
title, interest and remedies of the Lessor in, under and to the Related Agreements
and any other agreements and arrangements concerning the use, operation, and
repair of the Leased Property.  Lessor
agrees, at Lessee’s expense, to execute and deliver or to join in the execution
of such further instruments as may be necessary to enable the Lessee to perform
Lessor’s obligations under the Related Agreements during the Term and to
exercise and enforce the rights, remedies and obligations conferred to or
delegated to Lessee pursuant to this paragraph. 
Upon termination of the Lease and delivery of possession of the Subject
Property to Lessor pursuant to Article XVI (as a result of a Limited
Recourse Event of Default only) or Article XX of the Lease or to a third
party, the Lessee shall have no further obligation to perform obligations under
the Related Agreements pursuant to this paragraph.  Lessee consents to Lessor’s execution and
delivery of the transfer and assignment documents to which Lessor is a party,
delivered pursuant to the Purchase Agreement on the Closing Date.

 

Notwithstanding the foregoing, the Lessor may, at any
time that an Event of Default has occurred and is continuing, revoke the rights
of Lessee granted in this Section 6.2 (i) to exercise or enforce any
rights or remedies under the Related Agreements, (ii) to grant or withhold
any consents, waivers, extensions, and indulgences under the Related Agreements
or (iii) to amend, supplement, waive, extend, restate or otherwise modify
the Related Agreements; provided that
such revocation shall not affect Lessee’s obligations under Section 9.1(h) of
the Participation Agreement.

 

ARTICLE VII

LESSEE ACKNOWLEDGEMENTS

 

                Section 7.1.       CONDITION
OF THE LEASED PROPERTY.  THE
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE LEASED PROPERTY “AS IS”
WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE
LESSOR, THE COLLATERAL AGENT OR THE LENDERS AND IN EACH CASE SUBJECT TO (a) THE
EXISTING STATE OF TITLE (EXCLUDING LESSOR LIENS), (b) THE RIGHTS OF ANY
PARTIES IN POSSESSION THEREOF, (c) ANY STATE OF FACTS WHICH AN ACCURATE
SURVEY OR A PHYSICAL INSPECTION MIGHT SHOW, (d) VIOLATIONS OF REQUIREMENTS
OF LAW WHICH MAY EXIST ON THE DATE HEREOF ON OR AT ANY TIME HEREAFTER AND (e) THE
RIGHTS OF GROUND LESSOR UNDER THE GROUND LEASE AND THE OTHER PARTIES UNDER THE
RELATED AGREEMENTS, THE CSC SUBLEASE, AND ANY FIFTH FLOOR SUBLEASE.  NONE OF THE LESSOR, THE COLLATERAL AGENT OR
ANY OF THE LENDERS HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION,
WARRANTY OR COVENANT (OTHER THAN AS IN SECTION 4.1 HEREOF) (EXPRESS OR IMPLIED)
OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE (OTHER THAN
FOR LESSOR LIENS), VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR
FITNESS FOR USE OF THE LEASED PROPERTY (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO THE LEASED PROPERTY (OR ANY PART THEREOF) AND NONE OF THE
LESSOR, THE COLLATERAL AGENT OR THE LENDERS SHALL BE LIABLE FOR ANY LATENT,
HIDDEN, OR PATENT DEFECT THEREIN (OTHER THAN FOR LESSOR LIENS) OR THE FAILURE
OF THE LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE
LAWS. 

 

8

 

All risks incident to the matters discussed in the
preceding sentences, as between the Lessor, the Collateral Agent and the
Lenders, on the one hand, and Lessee, on the other, are to be borne by
Lessee.  The provisions of this Section 7.1
have been negotiated, and, except to the extent otherwise expressly stated, the
foregoing provisions are intended to be a complete exclusion and negation of
any representations or warranties by any of the Lessor, the Collateral Agent or
the Lenders, express or implied, with respect to the Leased Property (or any
interest therein), other than the obligation to remove Lessor Liens
attributable to it, that may arise pursuant to any law now or hereafter in
effect or otherwise.

 

                Section 7.2.       Risk of
Loss.  During the Term, as
between Lessee and Lessor, the risk of loss of or decrease in the enjoyment and
beneficial use of the Leased Property as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
assumed by the Lessee, and the Lessor shall in no event be answerable or
accountable therefor.

 

                Section 7.3.       Certain
Duties and Responsibilities of Lessor.  Lessor undertakes to perform such duties and
only such duties as are specifically set forth herein and in the other
Operative Documents (other than the Related Agreements, the CSC Sublease and
any Fifth Floor Sublease with respect to any time prior to the termination of
the Lease and the transfer of possession of the Leased Property to Lessor
pursuant to Article XVI (as a result of a Limited Recourse Event of
Default only) or Article XX of the Lease, or a third party), and no
implied covenants or obligations shall be read into this Lease against Lessor,
and Lessor agrees that it shall not, nor shall it have a duty to, manage,
control, use, sell, maintain, insure, register, lease, operate, modify, dispose
of or otherwise deal with the Subject Property, the CSC Sublease and any Fifth
Floor Sublease in any manner whatsoever, except as required by the terms of the
Operative Documents and as otherwise provided herein.  Lessee hereby agrees that none of Lessor, the
Collateral Agent or any Lender shall be obligated to perform any covenant or
agreement set forth herein or in the other Operative Documents or permit the
exercise by Lessee of any right set forth herein or in the other Operative
Documents if such agreement or covenant or the exercise of such right is
prohibited by or conflicts with the terms of any Related Agreement, the CSC
Sublease or any Fifth Floor Sublease.

 

ARTICLE VIII

POSSESSION AND USE OF THE PROPERTY, ETC.

 

                Section 8.1.       Possession
and Use of the Leased Property. 
Lessee agrees that the Leased Property will be used as a Class “A”
office building in a manner consistent with this Lease and the other Operative
Documents and applying standards of use no lower than the standards applied by
the Lessee for other comparable properties owned or leased by the Lessee.  At all times during the Term, the Leased
Property shall remain in the possession and control of Lessee or its permitted
assignees or sublessees; Lessee warrants that the Leased Property will at all
times be used and operated under and in compliance in all material respects
with the terms of the Ground Lease, the other Related Agreements to the extent
that they relate to the Leased Property, the CSC Sublease, and any Fifth Floor
Sublease (as and when any such Fifth Floor Sublease becomes effective).  

 

9

 

Lessee shall not use the Leased Property or any part
thereof for any purpose or in any manner that would materially adversely affect
the Fair Market Value, utility, remaining useful life or residual value of the
Leased Property, ordinary wear and tear excepted.  Lessee assumes and agrees to pay all fees,
charges, costs, assessments, impositions, utilities and other amounts which
relate to or arise in connection with the purchase, disposition, ownership,
lease or use of any real or personal property, Governmental Actions and other
rights, privileges or entitlements required to be paid in connection with the
Leased Property.  All such charges for
utilities imposed with respect to the Leased Property for a billing period
during which this Lease expires or terminates (except when Lessee purchases the
Subject Property in accordance with the terms of this Lease, in which case
Lessee shall be solely responsible for all such charges) shall be adjusted and
prorated on a daily basis between Lessee, Lessor (but solely as a result of the
return of the Subject Property, the CSC Sublease and any Fifth Floor Sublease
in connection with the exercise by Lessee of the Sale Option pursuant to Article XX
hereof or as a result of a Limited Recourse Event of Default under Section 16.5
hereof) and any purchaser of the Subject Property, the CSC Sublease and any
Fifth Floor Sublease, and each party shall pay or reimburse the other for each
party’s pro rata share thereof; provided, that in no event shall Lessor have any liability
therefor.  Lessee shall be entitled to
receive any credit or refund received by the Lessor on account of any utility
charges paid by Lessee, net of the costs and expenses reasonably incurred by
the Lessor in obtaining such credit or refund, and the amount of such credit or
refund shall be promptly paid over to Lessee.

 

                Section 8.2.       Compliance
with Requirements of Law and Insurance Requirements.  Subject to the terms of Article XII
relating to permitted contests, the Lessee, at its sole cost and expense, shall
or shall cause the applicable sublessee to (a) comply with all Applicable
Laws (including all Environmental Laws) and Insurance Requirements relating to
the Leased Property, including the use, operation, maintenance, repair and
restoration thereof and any sale thereof pursuant to Section 19.1(b),
whether or not compliance therewith shall require structural or extraordinary
changes in the Facility or interfere with the use and enjoyment of the Leased
Property, and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the use,
operation, maintenance, repair and restoration of the Leased Property and for
the use, operation, maintenance, repair and restoration of the Facility.

 

ARTICLE IX

MAINTENANCE AND REPAIR; REPORTS

 

                Section 9.1.       Maintenance.  Lessee, at its sole cost and expense, shall
maintain, service and repair (a) the Leased Property to keep it (i) in
good working order and (ii) in such condition as the Lessee would, in the
prudent management of its own properties, maintain, service and repair similar
property owned or leased by the Lessee and, in any event, to the extent
required to maintain the Leased Property in good condition and repair (which
shall include, without limitation, repairs required to any structural element
of the Leased Property and replacement of any component or mechanical system of
the Leased Property) and in compliance with the Ground Lease, any other Related
Agreements, the CSC Sublease, any Fifth Floor Sublease, all Applicable Laws,
Industry Standards and Insurance Requirements, noncompliance with which might
result in the imposition of a penalty on any Indemnified Party or materially
adversely affect the Leased Property or the operation thereof and, in any event
in accordance with prudent industry practice, and (b) the Leased Property
to keep it maintained as a Class “A” office building.  

 

10

 

In the event of any damage or destruction other than a
Significant Casualty with respect to the Leased Property, the Lessee shall, at
its own expense, with reasonable promptness, repair or restore the same so that
upon the completion of such repair or restoration the Leased Property shall be
in the condition required by the provisions of this Section 9.1 and so
that the value, utility and useful life of the Property shall be at least equal
to the value, utility and useful life of the Leased Property immediately prior
to the occurrence of such damage or destruction.

 

                Section 9.2.       Maintenance
Costs and Warranties.  The
Lessee agrees to pay all costs, expenses, fees and charges incurred in
connection with (i) the use and operation of the Leased Property by the
Lessee during the Term, including but not limited to repairs, maintenance,
storage and servicing as provided in Article X and this Article IX
and (ii) the preserving and protecting of the Leased Property, and the
repairing, maintaining and servicing of the Leased Property as provided in Article X
and this Article IX, during the period after a termination of the Lessee’s
right of possession of the Leased Property pursuant to Section 16.2  (subject to Section 16.5)  and
prior to the interest of the Lessor in the Leased Property being sold to a
third person by the Lessor.  So long as
no Event of Default has occurred and is continuing, the Lessor hereby
constitutes the Lessee as the agent and attorney-in-fact of the Lessor for the
purpose of exercising and enforcing, and with full right, power and authority
to exercise and to enforce, all of the right, title and interest of the Lessor
in, under and to the warranties and obligations of any supplier of goods or
services in respect of the Leased Property and agrees to execute and deliver
such further instruments as may be necessary to enable the Lessee to obtain
goods or services furnished for the Leased Property by said suppliers.  The Lessor shall have no other obligation or
duty with respect to any of such matters. 
So long as no Event of Default has occurred and is continuing, any
proceeds obtained by the Lessee from the enforcement of the warranties and
obligations of any supplier of goods or services in respect of the Leased
Property shall be held by the Lessee and applied from time to time to the
repair and maintenance of the Leased Property, and any balance thereof
remaining at the expiration of the Term shall be paid over to the Lessor or as
it may direct, subject to Section 5.2 of the Participation Agreement.

 

                Section 9.3.       Lessor Not
Obligated to Maintain or Repair. 
The Lessor shall not under any circumstances be required to build any
improvements on the Leased Property, make any repairs, replacements,
Modifications or renewals of any nature or description to the Leased Property,
make any expenditure whatsoever in connection with this Lease or maintain the
Leased Property in any way.  The Lessee
waives any right to (i) require the Lessor to maintain or repair all or
any part of the Leased Property or (ii) make repairs at the expense of the
Lessor pursuant to any Applicable Laws, contract, agreement, or covenant,
condition or restriction in effect at any time during the Term.

 

11

 

             Section 9.4.    Maintenance
and Repair Reports.  Lessee
shall keep maintenance and repair records in sufficient detail, at least on the
same basis as records are kept for similar properties owned or leased by
Lessee, to indicate the nature and date of major work done at or to the Leased
Property.  Such records shall be kept on
file by Lessee and shall be made available to Lessor upon reasonable
request.  Lessee shall give written
notice to Lessor of any Event of Loss promptly after Lessee has knowledge thereof.

 

ARTICLE X

MODIFICATIONS, ETC.

 

             Section 10.1.    Modifications
and Lessee Improvements.  (a)(i) Lessee,
at Lessee’s own cost and expense, shall make alterations, renovations,
improvements and additions to the Leased Property or any part thereof and
substitutions and replacements therefor (collectively, “Modifications”)
which are (A) necessary to repair or maintain the Leased Property in the
condition required by Section 9.1; (B) necessary in order for the
Leased Property to be in compliance with Applicable Laws in all material
respects; (C) necessary for the Leased Property to constitute a Class “A”
office building; and (D) necessary or advisable to restore the Leased
Property to its condition existing prior to a Casualty or Condemnation to the
extent required pursuant to Article XIV (collectively, the “Required Modifications”); and (ii) so long as no Event
of Default or Default has occurred and is continuing, Lessee or its subtenants,
at Lessee’s or its subtenant’s, as applicable, sole discretion and cost and
expense, may undertake Modifications to the Leased Property so long as such
Modifications comply with Applicable Laws in all material respects and with Section 9.1
and subsection (b) of this Section 10.1 (collectively, the “Permitted Modifications”).

 

                (b)       The making of any Modifications must be
in compliance with the following requirements:

 

                    (i)        No such Modification (other than Lessee
Improvements or Modifications described in Schedule 10.1 hereof) with a
cost exceeding $2,500,000 for any such Modification, shall be made or
undertaken without the prior written consent of Lessor and the Collateral Agent
(which consent shall not unreasonably be withheld).

 

                   (ii)        No Modifications shall be undertaken in
violation in any material respect of the terms of the Ground Lease, any other
Related Agreement, the CSC Sublease, the Fifth Floor Sublease or any
restriction, easement, condition, covenant or other similar matter affecting
title to or binding on the Leased Property unless Lessee shall have obtained, so
far as the same may be required from time to time, all material permits,
consents, waivers or other authorizations relating to such Modifications from
the applicable Governmental Authorities or third Persons.  Lessor, at Lessee’s expense, shall join in the
application for any such permit or authorization and execute and deliver any
document in connection therewith, whenever such joinder is necessary or
advisable.

 

12

 

                  (iii)        All Modifications (other than Lessee
Improvements) shall be completed in a good and workmanlike manner and in
compliance in all material respects with the Ground Lease, the Related
Agreements, the CSC Sublease, any Fifth Floor Sublease, all Applicable Laws and
Insurance Requirements and all Modifications (other than Lessee Improvements)
must be located solely on the Land or Lessee or Lessor must have obtained by no
later than the commencement of such Modifications (other than Lessee
Improvements) access rights reasonably satisfactory to the Collateral Agent.

 

                  (iv)        All Modifications shall, when completed,
be of such a character as to not materially adversely affect the Fair Market
Value, utility, remaining economic useful life or residual value of the Leased
Property from the Fair Market Value, utility, remaining economic useful life or
residual value thereof immediately prior to the making thereof (assuming the
Leased Property was then in the condition required by this Lease) or, in the
case of Modifications being made by virtue of a Casualty or Condemnation,
immediately prior to the occurrence of such Casualty or Condemnation (assuming
the Leased Property was then in the condition required by this Lease).

 

             Section 10.2.    Title
to Modifications.  (a) Title
to the following described Modifications shall, without further act, vest in
Lessor and shall be deemed to constitute a part of the Leased Property and be
subject to this Lease:

 

                    (i)        Modifications that are in replacement of
or in substitution for a portion of any item of Leased Property;

 

                   (ii)        Required Modifications; or

 

                  (iii)        Modifications that are Nonseverable.

 

If requested by Lessor, Lessee shall execute and
deliver any deeds, bills of sale, assignments, lease supplements or other
documents of conveyance reasonably necessary to evidence the vesting of title
in and to such Modifications to Lessor.

 

                (b)       If Modifications are not within any of
the categories set forth in clauses (i) through (iii) of Section 10.2(a) (each,
a “Lessee Improvement”), then title to
such Lessee Improvements shall vest in Lessee and such Lessee Improvements
shall not be deemed to be Modifications which are part of the Leased Property.

 

                (c)       All Lessee Improvements may, so long as (i) removal
thereof shall not result in the violation of any Applicable Laws, (ii) removal
thereof shall not adversely affect the Lessee’s ability to comply with its
obligations under this Lease or any other Operative Document, and (iii) no
Event of Default is continuing, be removed at any time by Lessee.  Lessee agrees to notify Lessor in writing at
least 30 days before it removes any Lessee Improvement or Lessee Improvements
which individually or in the aggregate had an original cost exceeding
$2,500,000, and Lessee shall at its expense repair any damage to the Leased
Property caused by the removal of such Lessee Improvement.  

 

13

 

Lessor (or the purchaser of the Leased Property) may
purchase from Lessee any such Lessee Improvement (if not already owned by
Lessor) that Lessee intends to remove from the Leased Property prior to the
return of the Leased Property to Lessor pursuant to Section 20.3 hereof or
sale of the Leased Property to a third party, which purchase shall be at the
Fair Market Value of such Lessee Improvement as determined by the Appraiser at
the time of such purchase.  Title to any
such Lessee Improvement shall vest in Lessor (or the purchaser of the
applicable Leased Property) if not removed from the Leased Property by Lessee
prior to the return of the Leased Property to Lessor or sale of the Leased
Property to a third party.

 

ARTICLE XI

COVENANTS WITH RESPECT TO LIENS AND EASEMENTS

 

             Section 11.1.    Covenants
with Respect to Liens.  (a) During
the Term, Lessee will not directly or indirectly create, incur, assume or
suffer to exist any Lien (other than Permitted Liens) on or with respect to any
portion of the Lessee’s interest in the Subject Property, the CSC Sublease, any
Fifth Floor Sublease, Lessor’s title thereto or other interest therein, or any
interest of Lessor, Collateral Agent or the Lenders therein.  Lessee, at its own expense, will promptly
pay, satisfy and otherwise take such actions as may be necessary to keep the
Leased Property free and clear of, and duly to discharge, eliminate or bond in
a manner reasonably satisfactory to Lessor and the Collateral Agent, any such
Lien (other than Permitted Liens or Lessor Liens) if the same shall arise at
any time.

 

                (b)       Nothing contained in this Lease shall be
construed as constituting the consent or request of the Lessor, express or
implied, to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the furnishing
of any materials for any construction, alteration, addition, repair,
restoration or demolition of or to the Leased Property or any part
thereof.  NOTICE IS HEREBY GIVEN THAT
NONE OF THE LESSOR, THE COLLATERAL AGENT OR ANY OF THE LENDERS IS OR SHALL BE
LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO THE
LESSEE, OR TO ANYONE HOLDING THE LEASED PROPERTY OR ANY PART THEREOF
THROUGH OR UNDER THE LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY SUCH
LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF THE
LESSOR, THE COLLATERAL AGENT OR ANY LENDER IN AND TO THE LEASED PROPERTY.

 

14

 

             Section 11.2.    Lessee’s
Grants and Releases of Easements; Lessor’s Waivers.  Provided that no Event of Default shall have
occurred and be continuing, and subject to the provisions of Articles VII, IX
and X and Section 8.2, the Lessor hereby consents in each instance to the
following actions by the Lessee in the name and stead of the Lessor and the
Lessor hereby appoints the Lessee as the true and lawful attorney-in-fact of
the Lessor with full power and authority to execute documents on behalf of the
Lessor for the following purposes, but at the Lessee’s sole cost and
expense:  (a) the granting of, or
entry into agreements in connection with, easements, licenses, rights-of-way,
building and use restrictions and covenants and other rights and privileges in
the nature of easements or similar interests and burdens reasonably necessary
or desirable for the use, repair, maintenance or protection of the Leased
Property as herein provided; (b) the release of existing easements or
other rights in the nature of easements which are for the benefit of, or burden
to, the Leased Property; (c) the execution of amendments to, or waivers or
releases of, any easements, licenses or covenants and restrictions affecting
the Leased Property; and  (d) the
filing and processing of any and all permit applications, authorizations,
entitlements, agreements with any Governmental Authority or amendments thereof,
or other documents reasonably required or beneficial for construction or
installation of Modifications which could not reasonably be expected to
adversely affect the rights of the Lessor, the Collateral Agent or any Lender
under the Operative Documents; provided, however,
that in each case (i) such grant, release, dedication, transfer,
amendment, agreement or other action does not materially impair the value,
utility, residual value or remaining useful life of the Subject Property, (ii) such
grant, release, transfer, amendment, agreement or, other action in the Lessee’s
judgment is, subject to Articles VIII, IX and X hereof, reasonably
necessary or desirable in connection with the use, operation, repair,
maintenance, alteration or improvement of the Leased Property, (iii) such
grant, release, dedication, transfer, amendment, agreement or other action will
not cause the Subject Property or any portion thereof to fail to comply with
the provisions of this Lease or any other Operative Documents and all
Applicable Laws (including, without limitation, all applicable zoning,
planning, building and subdivision ordinances, all applicable restrictive
covenants and all applicable architectural approval requirements); (iv) all
governmental consents or approvals required prior to such grant, release,
dedication, transfer, amendment, agreement or other action have been obtained,
and all filings with any Governmental Authorities required prior to such action
have been made; (v) the Lessee shall remain obligated under this Lease and
under any instrument executed by the Lessee consenting to the assignment of the
Lessor’s interest in this Lease as security for indebtedness, in each such case
in accordance with their terms, as though such grant, release, dedication,
transfer, amendment, agreement or other action had not been effected; (vi) during
the Term, the Lessee shall timely pay and perform any obligations of the Lessor
under such grant, release, dedication, transfer, amendment, agreement or other
action; and (vii) with respect to any action described in Section 11.2(a) through
Section 11.2(d), inclusive, no such action described in such sections
could reasonably be expected to have a Material Adverse Effect.  Without limiting the effectiveness of the
foregoing, provided, that no Default or Event of
Default shall have occurred and be continuing, the Lessor shall, upon the
request of the Lessee, and at the Lessee’s sole cost and expense, execute and
deliver any instruments delivered to it that are necessary or appropriate to
confirm any such grant, release, dedication, transfer, amendment, agreement or
other action to any Person permitted under this Section.

 

             Section 11.3.    Compliance with Texas Voluntary Cleanup Program.  During the Term, Lessee shall comply with all
applicable laws, rules, regulations and institutional controls applicable to
the Leased Property, including without limitation the Permanent Institutional
Controls affecting the Leased Property described on Exhibit “C” of the
Voluntary Cleanup Program Final Certificate of Completion recorded under Document
No. 2000011292 of the Official Public Records of Travis County,
Texas.  This obligation binds any Person
to whom Lessee assigns or subleases the Leased Property.

 

15

 

ARTICLE XII

PERMITTED CONTESTS

 

             Section 12.1.    Permitted
Contests in Respect of Applicable Laws.  Except to the extent otherwise provided in Section 12.4(b) of
the Participation Agreement with respect to Taxes and Impositions, if, to the
extent and for so long as (x) a test, challenge, contest, appeal or
proceeding for review, as applicable, of (A) any Applicable Law relating
to the Leased Property or any part thereof or the obligation to comply
therewith or (B) any Supplemental Rent payable to any Person other than
Lessor, Collateral Agent or any Lender, shall be prosecuted diligently and in
good faith in appropriate proceedings by the Lessee or (y) compliance with
such Applicable Law or payment shall have been excused or exempted by a valid
nonconforming use, variance, permit, waiver, extension or forbearance, Lessee
shall not be required to comply with such Applicable Law or to make such
payment but only if and so long as any such test, challenge, contest, appeal,
proceeding, waiver, extension, forbearance or noncompliance shall not, in the
reasonable opinion of the Lessor and the Collateral Agent, involve (A) any
risk of criminal liability being imposed on the Lessor, the Collateral Agent,
or any Lender, or (B) any material risk of (1) foreclosure,
forfeiture or loss of the Subject Property, or any material part thereof, (2) the
nonpayment of Rent to Lessor, Collateral Agent or any Lender, (3) any sale
of, or the creation of any Lien (other than a Permitted Lien) on, any part of
the Subject Property, the Lessee’s interest in the CSC Sublease or any Fifth
Floor Sublease (provided, however, nothing herein
shall be deemed to reduce or diminish Lessee’s obligations at Section 11.1),
(4) civil or criminal liability being imposed on the Lessor, the
Collateral Agent, any Lender for which the Lessee is not obligated to indemnify
such parties under the Operative Documents or (5) enjoinment of, or
interference with, the use, possession or disposition of the Subject Property,
the Lessee’s interest in the CSC Sublease or any Fifth Floor Sublease in any material
respect.  Subject to Article XIII of
the Participation Agreement, Lessee shall also have a right to contest and
appeal any Taxes or Impositions.

 

None of the Lessor, the Collateral Agent or any Lender
will be required to join in any proceedings pursuant to this Section 12.1
unless a provision of any Applicable Law requires that such proceedings be
brought by or in the name of such party; and in that event such party will join
in the proceedings or permit them or any part thereof to be brought in its name
if and so long as (i) the Lessee has not elected the Sale Option and (ii) the
Lessee agrees in writing to pay, and pays, all related expenses (including
attorneys’ fees) and agrees in writing to indemnify the Lessor, the Collateral
Agent and the Lenders, in form and substance reasonably satisfactory to each of
the respective Indemnitees, in respect of any claim relating thereto.

 

16

 

ARTICLE XIII

INSURANCE

 

             Section 13.1.    Required
Coverages.  During the Term,
Lessee will maintain at all times:

 

                (a)       General Liability
Insurance.  Combined single
limit insurance against claims for third-party bodily injury, including death,
and third-party property damage occurring as a result of the ownership, use, maintenance
or operation of the Subject Property, in an amount at least equal to $5,000,000
per occurrence.  Such coverage may be
subject to deductibles or self-insured retentions up to an amount that is
consistent with Lessee’s insurance program for similar property owned or leased
by Lessee and in keeping with prudent industry practice.

 

                (b)       Property Insurance.  Insurance against loss of or damage to the
Leased Property, or any portion thereof by reason of any insurable peril in an
amount consistent with Lessee’s insurance program for similar property owned or
leased by Lessee, in keeping with prudent industry practice (subject to such
deductibles and/or self-insurance in such minimum amounts as is consistent with
Lessee’s insurance program for similar property owned or leased by Lessee, in
keeping with prudent industry practice); provided, however,
that at no time shall the amount of such coverage be less than the replacement
cost of the Leased Property, including any costs that may be required to cause
the Leased Property to be restored in accordance with then current Applicable
Laws.

 

                (c)       Other Insurance.  Such other insurance, in each case as is
generally carried by Lessee for similar properties owned or leased by it in
such amounts and against such risks as are then customary for Lessee.  Lessee shall also cause to be in place in the
amounts and at the times required the insurance required to be carried (i) by
Lessor under the Ground Lease and the other Related Agreements to the extent
such Related Agreements relate to the Subject Property and impose insurance
requirements in excess of those required by this Article XIII and (ii) by
Lessee under the CSC Sublease and any Fifth Floor Sublease.

 

             Section 13.2.    Insurance
Coverage.  The insurance
coverage required in Section 13.1 shall be written by reputable insurance
companies that are financially sound and solvent and otherwise reasonably
appropriate considering the amount and type of insurance being provided by such
companies.  Any insurance company selected
by Lessee shall be rated in A.M. Best’s Insurance Guide or any successor
thereto (or if there be none, an organization having a similar national
reputation) and shall have a general policyholder rating of “A” (or comparable
rating for a rating by an organization other than A.M. Best) and a
financial rating of at least “X” (or comparable rating for a rating by an
organization other than A.M. Best) or be otherwise acceptable to the
Participants.  In the case of liability
insurance maintained by Lessee, it shall name the Collateral Agent and each of
the Participants as additional insureds and, in the case of property insurance
maintained by Lessee covering the Leased Property, it shall name the Collateral
Agent as mortgagee and sole loss payee. 
Each policy referred to in Section 13.1 shall provide that:  (i) it will not be canceled or amended
with regard to reduction of limits, reduction or elimination of coverages, or
increase in the amount of any deductible, retained limit, or self-insured
retention, or allowed to lapse without renewal, except after not less than 30
days prior written notice (10 days for nonpayment of premium) to Lessor and
Collateral Agent; (ii) the interests of Lessor, Collateral Agent and any
Lender shall not be invalidated by any act or negligence of or breach of
warranty or representation by Lessee or any other Person having an interest in
the Leased Property; (iii) such insurance is primary with respect to any
other insurance carried by or available to Lessor, Collateral Agent or any
Lender; (iv) with respect to such other insurance the insurer shall waive
any right of subrogation, setoff, counterclaim, or other deduction, whether by
attachment or otherwise, against Lessor; and (v) any such liability policy
shall contain a cross-liability clause providing for coverage of Collateral
Agent and each Participant, as if separate policies had been issued to each of
them.  Lessee will notify Lessor and
Collateral Agent promptly of any policy cancellation, reduction in policy
limits, modification or amendment which has or could have an adverse effect on,
or in any way impair, any insurance coverage provided for herein or in Section 13.1.

 

17

 

             Section 13.3.    Delivery
of Insurance Certificates.  On
or before the Closing Date, Lessee shall deliver to Collateral Agent and Lessor
certificates of insurance satisfactory to Collateral Agent and Lessor
evidencing the existence of all insurance required to be maintained hereunder
and setting forth the respective coverages, limits of liability, carrier,
policy number and period of coverage. 
Thereafter, throughout the Term, at the time each of Lessee’s insurance
policies is renewed (but in no event less frequently than once each year) or
upon written request by Lessor following an Event of Default, Lessee shall
deliver to Collateral Agent and Lessor certificates of insurance evidencing
that all insurance required by Sections 13.1 and 13.2 to be maintained by
Lessee is in effect.

 

             Section 13.4.    Insurance
by Lessor, Collateral  Agent or any Lender.  Each of the Lessor, the Collateral Agent or
any Lender may at its own expense carry insurance with respect to its interest
in the Leased Property, and any insurance payments received from policies
maintained by the Collateral Agent or any Participant shall be retained by
Lessor, such Collateral Agent or such Lender, as the case may be, without
reducing or otherwise affecting Lessee’s obligations hereunder.

 

ARTICLE XIV

CASUALTY AND CONDEMNATION

 

             Section 14.1.    Casualty
and Condemnation.  (a) Subject
to the provisions of this Article XIV, if all or any portion of the Leased
Property suffers a Casualty (other than a Significant Casualty as to which a
Termination Notice has been given), Lessee shall control the negotiations with
the relevant insurer and, except as otherwise provided in this Section 14.1,
any insurance proceeds payable with respect to such Casualty shall be paid
directly to the Lessee, or if received by the Collateral Agent or any
Participant, shall be paid over to the Lessee and shall be used by Lessee
solely for the reconstruction, restoration and repair of such Leased Property,
and if the use of, access to, occupancy of or title to the Leased Property or
any part thereof is the subject of a Condemnation (other than a Significant
Condemnation as to which a Termination Notice has been given), then any award
or compensation relating thereto shall be paid, except as otherwise provided in
the Ground Lease and the other Related Agreements, and this Section 14.1,
to the Lessee and shall be used by Lessee solely for the restoration of the
Leased Property.  Any insurance proceeds
or condemnation award or compensation in excess of $2,000,000 for any single
Casualty or Condemnation which are payable with respect to a Casualty or
Condemnation (whether or not a Significant Casualty or a Significant
Condemnation, respectively) shall be held in trust by the Collateral Agent in a
segregated account (the “Proceeds Account”)
for reimbursement to the Lessee from time to time during the course of the
Lessee’s restoration of the Leased Property and compliance with the provisions
of Article IX hereof.  

 

18

 

Any such amounts held by the Collateral Agent shall be
invested by the Collateral Agent in Permitted Investments at the direction of
the Lessee from time to time, with all interest and earnings on such
investments being payable to the Lessee promptly upon receipt thereof by the
Collateral Agent from time to time.  All
amounts held by the Lessor, the Collateral Agent or any of the Lenders on
account of any award, compensation or insurance proceeds paid directly to or
otherwise received by the Lessor, the Collateral Agent or any of the Lenders
shall promptly be remitted to the Lessee (or if the immediately preceding
sentence is applicable, the Collateral Agent) to be applied in accordance with
this Section 14.1.  Each of the
Lessee and the Lessor shall, prior to any deposit contemplated by this Section 14.1
in the Proceeds Account, and thereafter from time to time as reasonably
requested by the Collateral Agent, take any and all actions (including, without
limitation, the execution of such security and other agreements and UCC
financing statements as the Collateral Agent shall reasonably request)
reasonably requested by the Collateral Agent in order to grant to the
Collateral Agent (on behalf of the Participants) a first priority perfected
Lien on and security interest in the Proceeds Account and any and all amounts
and other property from time to time on deposit therein.  To the extent that Lessor has Funded amounts
for the repair, rebuilding and reconstruction of the Leased Property, and
insurance proceeds or condemnation awards are received thereafter, such
proceeds and awards in amounts equal to such Fundings by Lessor shall be paid
to the Collateral Agent and applied in accordance with Section 5.3(d)(iii) of
the Participation Agreement. 
Notwithstanding the foregoing, if any Event of Default shall have
occurred and be continuing, all awards, compensations or insurance proceeds
shall be paid directly to the Collateral Agent or, if received by the Lessee,
shall be held in trust for the Participants and shall be paid over by the
Lessee to the Collateral Agent.  All
amounts held by the Lessor or the Collateral Agent on account of any award,
compensation or insurance proceeds either paid directly to the Lessor or the
Collateral Agent or turned over to the Lessor or the Collateral Agent, in each
case after the occurrence and during the continuance of an Event of Default,
shall at the option of the Lessor (at the direction of the Participants) either
be (A) paid to the Lessee for the repair of damage caused by such Casualty
or Condemnation in accordance with this clause (a), or (B) applied
pursuant to Section 5.3 of the Participation Agreement to the Lease
Balance and any other amounts owed by Lessee under the Operative Documents in
accordance with Article XVI hereof and Section 5.3(j) of the
Participation Agreement.

 

                (b)       In the event any part of the Leased
Property becomes subject to condemnation or requisition proceedings during the
Term, Lessee shall give notice thereof to Lessor promptly after Lessee has
knowledge thereof and, to the extent permitted by Applicable Laws, Lessee shall
control the negotiations with the relevant Governmental Authority unless an
Event of Default exists or such condemnation or requisition could result in a
Significant Condemnation in which case Lessor shall be entitled to control such
negotiations; provided, that in any event,
Lessor may participate at Lessor’s expense (if an Event of Default exists
Lessor may control or participate at Lessee’s expense, subject to Section 16.5
hereof) in such negotiations; and provided in all
cases, that no settlement will be made without Lessor’s prior written consent
(which consent shall not be unreasonably withheld, conditioned or
delayed).  Lessee shall give to Lessor
such information, and copies of such documents, which relate to such
proceedings, or which relate to the settlement of amounts due under insurance
policies required by Article XIII, and are in the possession of Lessee, as
are reasonably requested by Lessor.  If
the proceedings relate to a Significant Condemnation, Lessee shall act
diligently in connection therewith. 
Nothing contained in this Section 14.1(b) shall diminish
Lessor’s rights with respect to condemnation awards and property insurance
proceeds under Articles XIII or XIV.

 

19

 

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

 

                (d)       If, pursuant to this Article XIV,
this Lease shall continue in full force and effect following a Casualty or
Condemnation, the Lessee shall, at its sole cost and expense (and, without
limitation, if any award, compensation or insurance payment is not sufficient
to restore the Leased Property in accordance with this clause (d), pay the
shortfall) and promptly and diligently repair any damage to the Leased Property
caused by such Casualty or Condemnation in conformity with the requirements of
Sections 9.1 and 10.1 so as to restore the Leased Property to at least the same
condition and value as existed immediately prior to such Casualty or, in the
case of Condemnation, to as close to the same condition as possible.  In such event, title to the Leased Property shall
remain with the Lessor subject to the terms of this Lease.  Upon completion of such restoration, the
Lessee shall, if the actual cost of such restoration exceeds $2,000,000,
furnish to Lessor a Responsible Officer’s Certificate confirming that such
restoration has been completed pursuant to this Lease.

 

             Section 14.2.    Environmental
Matters.  At Lessee’s sole cost and expense, Lessee
shall in a reasonably prompt and diligent manner undertake or cause to be
undertaken any response, clean up, remedial or other action necessary to
remove, clean up or remediate any Environmental Violation to the extent
required by Applicable Laws with respect to the Leased Property (a “Remediation”).

 

             Section 14.3.    Notice
of Environmental Matters. 
Lessee shall promptly provide to Lessor written notice of any pending or
threatened claim, action or proceeding involving any Environmental Violation of
which Lessee has knowledge or any Release of which Lessee has knowledge on, at,
under or from the Land, which violation or Release could, in Lessee’s
reasonable judgment, require in excess of $500,000 in costs for Remediation, or
which could result in the imposition of criminal penalties upon Lessor,
Collateral Agent or any Lender (any such violation, claim, action, proceeding
or Release, a “Material Environmental Violation”).  All such notices shall describe the nature of
the Material Environmental Violation, including any claims, actions or
proceedings in respect thereof, and Lessee’s proposed response thereto.  In addition, Lessee shall provide to Lessor,
within ten (10) Business Days of receipt, copies of all significant
written communications with any Governmental Authority relating to any such
Material Environmental Violation.  Lessee
shall also promptly provide such detailed reports of any such Material Environmental
Violations as may reasonably be requested by Lessor or the Collateral
Agent.  Upon completion of the
Remediation of such Material Environmental Violation by Lessee, Lessee shall
cause to be prepared by an environmental consultant reasonably acceptable to
Lessor and Collateral Agent a report describing the Material Environmental
Violation and the actions taken by Lessee (or its agents) in response to such
Material Environmental Violation, and a statement by the consultant that in
such consultant’s opinion after due inquiry, the Material Environmental
Violation has been remediated in compliance in all material respects with
applicable Environmental Law.  The
Remediation of each such Material Environmental Violation shall be completed
prior to the Expiration Date unless the Subject Property has been purchased by
Lessee in accordance with Article XV or Article XVIII.  Nothing in this Article XIV shall reduce
or limit Lessee’s obligations elsewhere in this Lease or under the
Participation Agreement.

 

20

 

ARTICLE XV

TERMINATION OF LEASE

 

             Section 15.1.    Termination
upon Certain Events; Lessee Assumption of Related Agreements.  (a) If an Event of Loss with respect to
the Leased Property or Significant Environmental Event with respect to the
Subject Property occurs during the Term with respect to the Subject Property,
then the Lessor may elect to terminate the Lease by giving written notice (a “Termination Notice”) to the Lessee, but in any event no
later than sixty (60) days following Lessee’s written notice to Lessor and
Collateral Agent of the occurrence of such Event of Loss or Significant
Environmental Event as a consequence of such Event of Loss or Significant
Environmental Event, the Lease is to be terminated on the Payment Date
specified in Section 15.1(b).

 

                (b)       Following the Lessee’s receipt of the
Termination Notice, the Lessee shall be obligated to purchase the Lessor’s
interest in all, but not less than all, of the Subject Property on or prior to
the next occurring Payment Date (but in no event any earlier than sixty (60)
days from the date the Lessee receives the applicable Termination Notice) by
paying the Lessor an amount equal to the Purchase Amount.

 

             Section 15.2.    Termination
Procedures.  In connection
with the purchase of the Subject Property in accordance with Section 15.1(b),
this Lease shall terminate and, concurrent with the Lessor’s receipt of the
Purchase Amount:

 

                   (a)        the Lessor and Lessee shall comply with
the provisions of Sections 21.1(i) through 21.1(v); and

 

                   (b)        the Lessor shall convey to the Lessee
any net proceeds (that is, after deducting all costs and expenses incurred by
the Lessor, the Collateral Agent or any Lender(s) incident to collecting
any such proceeds of the Event of Loss or Significant Environmental Event,
including, without limitation, reasonable fees and expenses for counsel) with
respect to the Event of Loss or Significant Environmental Event giving rise to
the termination of this Lease theretofore received by the Lessor or, at the
request of the Lessee, to the extent actually received and if acceptable to
Lessor in its sole judgment, Lessor shall apply such amounts against sums due
hereunder.

 

                   (c)        Lessee hereby agrees that upon a
termination of this Lease pursuant to this Article XV, Article XVIII
or Section 19.1(a) hereof, Lessee shall enter into an assignment and
assumption agreement with Lessor in form and substance satisfactory to Lessor,
pursuant to which Lessor shall assign to Lessee, and Lessee shall so assume,
any and all obligations of the Lessor under the Related Agreements.

 

21

 

ARTICLE XVI

EVENTS OF DEFAULT

 

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

 

                   (a)        the occurrence of a Payment Default; or

 

                   (b)        the Lessee shall fail to make payment of
any Supplemental Rent (other than Supplemental Rent referred to in clause (a) of
this Section 16.1) within five (5) Business Days after such
Supplemental Rent is due and payable; or

 

                   (c)        the Lessee shall fail to maintain
insurance as required by Article XIII of this Lease (but not including the
requirement set forth in Section 13.3 of this Lease); or

 

                   (d)        the Lessee shall fail to observe,
perform or comply with (i) Section 9.1(h) (after giving effect
to any applicable notice or grace period in the applicable Related Agreement,
the CSC Sublease or any Fifth Floor Sublease), Section 9.1(o), Section 9.1(p) or
Section 9.1(q) of the Participation Agreement or (ii) Section 11.1
or Article XVIII, XIX or XX hereof; or

 

                   (e)        the Lessee shall fail to observe or
perform any term, covenant or condition applicable to it under any Operative
Document to which it is party (other than those described in Section 16.1(a),
(b), (c) or (d) hereof) and, in each such case, such failure shall
have continued unremedied for thirty (30) days after the earlier of Lessee’s
knowledge thereof or written notice thereof has been given to the Lessee by the
Lessor, the Collateral Agent or any Lender; provided however
that if such failure is capable of cure but cannot be cured by diligent efforts
within such thirty (30) day period but such diligent efforts shall be properly
commenced within such thirty (30) day cure period and the Lessee is diligently
pursuing, and shall continue to pursue diligently, remedy of such failure, the
cure period shall be extended for an additional one hundred twenty (120) days,
but not to extend beyond the Expiration Date; or

 

                    (f)        any representation or warranty made by
the Lessee in any Operative Document to which it is a party or which is
contained in any certificate, document or financial statement or other
statement furnished at any time under or in connection with any Operative Document
shall prove to have been incorrect, false or misleading in any material respect
on or as of the date made; or

 

22

 

 

 

                   (g)        (i) the Lessee or any of its
Material Subsidiaries shall commence any case, proceeding or other action (A) under
any existing or future law of any jurisdiction, domestic or foreign, relating
to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have
an order for relief entered with respect to it, or seeking to adjudicate it
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Lessee or any of its Material
Subsidiaries shall make a general assignment for the benefit of its creditors;
or (ii) there shall be commenced against the Lessee or any of its Material
Subsidiaries in any case, proceeding or other action of a nature referred to in
clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
undischarged or unbonded for a period of sixty (60) days; or (iii) there
shall be commenced against the Lessee or any of its Material Subsidiaries in
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, restraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within sixty (60) days from the entry thereof; or (iv) the
Lessee or any of its Material Subsidiaries shall in writing consent to,
approve, or acquiesce to, any of the acts set forth in clause (i), (ii) or
(iii) above; or (v) the Lessee or any of its Material Subsidiaries
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or

 

                   (h)        any Operative Document of the type
described in clause (a), (b), (c), (d), (e), (f), (g), (h), (k), (m), (n),
(o), (q) or (t) of the definition thereof or the security interest or
Lien granted under this Lease or any other Operative Document shall, in whole
or in material part, terminate, cease in whole or in material part to be
effective or (other than as expressly provided therein) cease to be the legal,
valid and binding enforceable obligation of the parties thereunder; or Lessee,
directly or indirectly, contests in any manner in any court the effectiveness,
validity, binding nature or enforceability thereof; or any security interest or
Lien securing Lessee’s or Lessor’s obligations under the Operative Documents,
in whole or in part, ceases to be a perfected first priority security interest
and Lien (subject only to Permitted Liens); or

 

                    (i)        the Lessee shall contest the
effectiveness, validity, binding nature or enforceability of any Operative
Document of the type described in clause (a), (b), (c), (d), (e), (f),
(g), (h), (k), (m), (n), (o), (q) or (t) of the definition thereof or
any Lien granted under any Operative Document which secures the Lessee’s
obligations under the Operative Documents; or

 

                    (j)        (i) the Lessee or any Material
Subsidiary shall fail to make any scheduled payment of principal, interest or
rent (whether as primary obligor or as guarantor or other surety) under any
agreement under which Funded Debt having a principal amount in excess of
$20,000,000 is outstanding, when due (after giving effect to any applicable
notice or grace period), or (ii) except as otherwise provided in
clause (i) above, Funded Debt of Lessee or any Material Subsidiary
with a principal amount in excess of $20,000,000 has been accelerated for any
reason whatsoever; or

 

23

 

                   (k)        (i) any member of the ERISA Group
shall fail to pay when due an amount or amounts aggregating in excess of
$20,000,000 which it shall have become liable to pay under Title IV of
ERISA; or (ii) notice of intent to terminate a Material Plan shall be
filed under Title IV of ERISA by any member of the ERISA Group, any plan
administrator or any combination of the foregoing; or (iii) any member of
the ERISA Group has been notified in writing that the PBGC has instituted
proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any Material Plan; or (iv) a
condition shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or (v) any
of the events described in clause (iii) above shall occur with
respect to any Plan or Plans (other than a multiemployer plan within the
meaning of Section 4001(a)(3) of ERISA) (A) that have aggregate
Unfunded Liabilities in excess of $20,000,000 and (B) with respect to
which either (1) one or more members of the ERISA Group have engaged in a
transaction or transactions described in Section 4069 of ERISA or (2) one
or more members of the ERISA Group is a member of the “controlled group” under Section 412(c)(11)
of the Code or Section 4001(a)(14) of ERISA; or (vi) there shall
occur a complete or partial withdrawal from, or a default, within the meaning
of Section 4219(c)(5) of ERISA, with respect to, one or more (A) multiemployer
plans, within the meaning of Section 4001(a)(3) of ERISA, with
respect to which a member of the ERISA Group shall have engaged, within the
previous five plan years, in a transaction described in Section 4212(c) of
ERISA, or (B) Multiemployer Plans, which could reasonably be expected to
result in the incurrence by one or more members of the ERISA Group of a current
payment obligation in excess of $20,000,000; provided
that no Event of Default shall occur under clause (v) or (vi) if
(A) the Unfunded Liabilities of the Other Plans in respect of which events
described in clause (v) have occurred, together with the current
payment obligations that could reasonably be expected to result from complete
or partial withdrawals or defaults described in clause (vi), shall not
exceed $20,000,000 and (B) each member of the ERISA Group that could
reasonably be expected to be liable for such Unfunded Liabilities or current
payment obligations is diligently contesting, in good faith, by appropriate
proceedings, the imposition of such liabilities or obligations; or

 

                    (l)        (i) one or more judgments or orders
for the payment, in the aggregate, of money in excess of $20,000,000 shall be
rendered against the Lessee or any of its Material Subsidiaries and such judgments
or orders shall continue unsatisfied and unstayed for a period of thirty (30)
days or (ii) one or more judgments or orders shall be rendered against the
Lessee or any Material Subsidiary, which judgments or orders shall be stayed on
condition that a bond or collateral equal to or greater than,  in the aggregate, $20,000,000 be posted or provided, and
such judgments or orders shall not be bonded, overturned or lifted within a
period of thirty (30) days.

 

24

 

              Section 16.2.       Remedies.  Upon the occurrence of any Event of Default
and at any time thereafter, the Lessor may, so long as such Event of Default is
continuing, do one or more of the following as the Lessor in its sole
discretion shall determine, without limiting any other right or remedy the
Lessor may have on account of such Event of Default, including, without
limitation, the right to compel the Lessee to purchase the Subject Property as
set forth in Section 18.2, but subject to the rights of the Lessee to
purchase the Subject Property pursuant to the terms and within the time periods
as set forth in Section 18.1 and Section 18.2:

 

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

 

                   (b)        The Lessor may (i) demand that the
Lessee, and the Lessee shall upon the written demand of the Lessor, return the
Leased Property promptly to the Lessor in the manner and condition required by,
and otherwise in accordance with all of the provisions of the Participation
Agreement and Article IX and Sections 8.2 and 14.2 hereof, and Lessee
shall comply with the requirements at Section 15.2(c) to the extent
requested by Lessor, as if the Leased Property were being returned at the end
of the Term, and the Lessor shall not be liable for the reimbursement of the
Lessee for any costs and expenses incurred by the Lessee in connection
therewith and (ii) without prejudice to any other remedy which the Lessor
may have for possession of the Leased Property, and to the extent and in the
manner permitted by Applicable Laws, enter upon the Leased Property in
accordance with all Applicable Laws and take immediate possession of (to the
exclusion of the Lessee) the Leased Property or any part thereof and expel or
remove the Lessee, by summary proceedings or otherwise, all without liability
to the Lessee for or by reason of such entry or taking of possession (provided, however, Lessor shall remain liable for actual
damages caused by its gross negligence or willful misconduct), whether for the
restoration of damage to property caused by such taking or otherwise and, in
addition to the Lessor’s other damages, the Lessee shall be responsible for all
costs and expenses incurred by the Lessor and the Lenders in connection with
any reletting, including, without limitation, reasonable brokers’ fees and all
costs of any alterations or repairs made by the Lessor;

 

25

 

                   (c)        The Lessor may (i) sell all or any
part of the Subject Property, at public or private sale, as the Lessor may
determine, free and clear of any rights of the Lessee (except that Excess Sales
Proceeds are payable to and shall be paid to the Lessee) with respect thereto
(except to the extent required by clause (ii) below if the Lessor shall
elect to exercise its rights thereunder) in which event the Lessee’s obligation
to pay Basic Rent hereunder for periods commencing after the date of such sale
shall be terminated; and (ii) if the Lessor shall so elect, demand that
the Lessee pay to the Lessor, and the Lessee shall pay to the Lessor, on the
date of such sale, as damages for loss of a bargain and not as a penalty (in
lieu of Basic Rent due for periods commencing on or after the Payment Date
coinciding with such date of sale (or, if the sale date is not a Payment Date,
the Payment Date next preceding the date of such sale)), an amount equal to (A) the
excess, if any, of (1) the Purchase Amount calculated as of such Payment
Date (including all Rent due and unpaid to and including such Payment Date),
over (2) the net proceeds of such sale (that is, after deducting all costs
and expenses incurred by the Lessor or any Lender incident to such conveyance,
including, without limitation, repossession costs, brokerage commissions,
prorations, transfer taxes, fees and expenses for counsel, title insurance
fees, survey costs, recording fees and any repair costs); plus (B) interest
at the Overdue Rate on the foregoing amount from such Payment Date until the
date of payment;

 

                   (d)        The Lessor may, at its option, (i) elect
not to terminate this Lease with respect to the Leased Property and continue to
collect all Basic Rent, Supplemental Rent and all other amounts due the Lessor
(together with all costs of collection) and enforce the Lessee’s obligations
under this Lease as and when the same become due, or are to be performed, and (ii) upon
any abandonment of the Leased Property by the Lessee, elect not to terminate
this Lease and may make the necessary repairs (and the Lessee shall pay the
reasonable costs of such repairs) in order to relet the Subject Property, and
relet the Subject Property or any part thereof (in place, if so elected by
Lessor) for such term or terms (which may be for a term extending beyond the
Term of this Lease) and at such rental or rentals and upon such other terms and
conditions as the Lessor in its reasonable discretion may deem advisable; and
upon each such reletting all rentals actually received by the Lessor from such
reletting shall be applied to the Lessee’s obligations hereunder and the other
Operative Documents in such order, proportion and priority as the Lessor may
elect in the Lessor’s sole and absolute discretion.  If the rentals received from the reletting
pursuant to this Section 16.2(d) during any period are less than the
Rent with respect to the Leased Property to be paid during that period by the
Lessee hereunder, the Lessee shall pay any deficiency, as calculated by the
Lessor on the next Payment Date;

 

                   (e)        Unless the Subject Property has been
sold in its entirety, the Lessor may, whether or not the Lessor shall have
exercised or shall thereafter at any time (subject to the Lessee’s prior
performance in full under this clause) exercise any of its rights under clause
(b), (c) or (d) with respect to the Leased Property or any portions
thereof, demand, by written notice to the Lessee specifying the Termination
Date (which shall be a date not earlier than ten (10) Business Days after
the date of such notice) that the Lessee purchase, on or before such
Termination Date, the Subject Property (or any remaining portion thereof) in
the manner provided in Section 18.2 and in accordance with the provisions
of Article XXI;

 

                    (f)        By written notice to Lessee, the Lessor
may declare the aggregate outstanding Lease Balance to be immediately due and
payable (such declaration shall be deemed to have occurred upon an Event of
Default under Section 16.1(g));

 

26

 

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

 

                   (h)        The Lessor may retain and apply against
the Lease Balance and all other amounts due and owing by the Lessee under the
Operative Documents, in accordance with Section 5.3 of the Participation
Agreement, all sums which the Lessor would, absent such Event of Default, be
required to pay to, or turn over to, the Lessee pursuant to the terms of this
Lease and upon payment in full of the Lease Balance and all such amounts
described above in this clause (h), the Subject Property shall be conveyed to
Lessee in accordance with Section 21.1 of this Lease; or

 

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

 

To the maximum extent permitted by law, the Lessee
hereby waives (x) the benefit of any appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshaling in the event of any sale of the Subject Property, the CSC
Sublease and any Fifth Floor Sublease or any interest therein and (y) any
rights now or in the future conferred by statute or otherwise which may require
the Lessor to sell, lease or otherwise use the Subject Property, the CSC
Sublease and any Fifth Floor Sublease in mitigation of the Lessor’s damages or
which may otherwise limit or modify any remedy of damages.

 

The Lessor shall be entitled to enforce payment of the
Loans and Lessor Amount and the performance of the obligations secured hereby
and to exercise all rights and powers under this instrument or under any of the
other Operative Documents or other agreement or any laws now or hereafter in
force, notwithstanding some or all of the obligations secured hereby may now or
hereafter be otherwise secured, whether by mortgage, security agreement, pledge,
lien, assignment or otherwise. Neither the acceptance of this instrument nor
its enforcement, shall prejudice or in any manner affect the Lessor’s right to
realize upon or enforce any other security now or hereafter held by the Lessor,
it being agreed that the Lessor shall be entitled to enforce this instrument
and any other security now or hereafter held by the Lessor in such order and
manner as the Lessor may determine in its absolute discretion. 

 

27

 

No remedy herein
conferred upon or reserved to the Lessor is intended to be exclusive of any
other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute. Every power or
remedy given by any of the Operative Documents to the Lessor or to which it may
otherwise be entitled, may be exercised, concurrently or independently, from
time to time and as often as may be deemed expedient by the Lessor.  Without limiting the foregoing, each of the
powers, rights and remedies as set forth or otherwise permitted pursuant to
this Article XVI are independent of the provisions of Article XIII of
the Participation Agreement and shall not be affected by any exclusion set
forth at Section 13.1(b) of the Participation Agreement.

 

The proceeds derived from any sale of Subject
Property, the CSC Sublease and any Fifth Floor Sublease and other amounts
recovered pursuant to the foregoing remedies after an Event of Default shall be
distributed pursuant to Section 5.3(g) of the Participation
Agreement.  The amount realized by the
Lessor upon a sale of the Subject Property, the CSC Sublease and any Fifth
Floor Sublease shall be net of Lessor’s and Lessee’s sale expenses  (including reasonable attorneys’ fees and
expenses) and other expenses reasonably and customarily incurred by the Lessor
or Lessee in connection with the Lessor holding and owning such Subject
Property, the CSC Sublease and any Fifth Floor Sublease until such time as the
Subject Property, the CSC Sublease and any Fifth Floor Sublease are sold.  The obligation to deliver to the Lessee, in
accordance with Section 5.3(g) of the Participation Agreement, any
Excess Sales Proceeds in connection with any sale of the Subject Property, the
CSC Sublease and any Fifth Floor Sublease shall survive this Lease.

 

              Section 16.3.       Waiver of
Certain Rights.  (a) To
the maximum extent permitted by law, the Lessee hereby waives the benefit of
any appraisement, valuation, stay, extension, reinstatement and redemption laws
now or hereafter in force and all rights of marshalling in the event of any
sale of the Subject Property, the CSC Sublease, any Fifth Floor Sublease or any
interest therein, and (b) if this Lease shall be terminated pursuant to Section 16.2,
the Lessee waives, to the fullest extent permitted by law, (i) any notice
of re-entry or the institution of legal proceedings to obtain re-entry or
possession; (ii) any right of redemption, re-entry or repossession; (iii) the
benefit of any laws now or hereafter in force exempting property from liability
for rent or for debt or limiting the Lessor with respect to the election of
remedies; and (iv) any other rights which might otherwise limit or modify
any of the Lessor’s rights or remedies under this Article XVI.

 

              Section 16.4.       Deed of
Trust Remedies.  Without
limiting any other remedies set forth in this Lease, and also, without limiting
the generality of Article XXIV hereof, the Deed of Trust Trustee, for the
benefit and at the direction of the Lessor, may proceed by a suit or suits in
equity or at law, whether for a foreclosure hereunder, or (to the extent
permitted by law) for the sale of the Subject Property, or against the Lessee
on a recourse basis for the Lease Balance, or for the specific performance of
any covenant or agreement contained herein or in aid of the execution of any
power granted herein, or for the appointment of a receiver pending any
foreclosure hereunder or the sale of the Subject Property, or for the
enforcement of any other appropriate legal or equitable remedy.  The Deed of Trust Trustee and the Lessor
shall have all rights available to a deed of trust trustee or a beneficiary of
a deed of trust under the laws of the State of Texas, including, without
limitation, all rights granted a mortgage holder or deed of trust beneficiary
under applicable Texas law.  

 

28

 

In the event that any provisions of this Lease shall
be inconsistent with Texas law, the provisions of such Texas law shall take
precedence over such provision of this Lease, but shall not invalidate or
render unenforceable any other provision of this Lease that can be construed in
a manner consistent with such Texas law. 
If any provision of this Lease shall grant the Deed of Trust Trustee and
the Lessor any rights or remedies upon default of the Lessee which are more
limited than the rights that would otherwise be vested in the Deed of Trust
Trustee and the Lessor under such Texas law in the absence of such provision,
the Deed of Trust Trustee and the Lessor shall be vested with the rights
granted in such Texas law to the full extent permitted by law.

 

              Section 16.5.       Limitation
on Recourse.  (a) 
Notwithstanding anything to the contrary contained in this Lease or any other
Operative Document, in the event and only in the event a Limited Recourse Event
of Default occurs and is continuing and no other Event of Default has occurred
and is continuing and the Lessee has returned possession of the Subject
Property to Lessor in accordance with, and otherwise in the condition required
by, this Lease, Lessee’s recourse liability under the Operative Documents
(except as set forth in clause (b) below) will not exceed the sum of
the Sale Option Recourse Amount, plus any overdue amounts accruing thereon if
such amount is not paid when due.

 

                (b)       The limitation on Lessee’s recourse
liability set forth in Section 16.5(a) shall not apply with respect
to the rights of Lessor, Collateral Agent or any Lender (A) to seek (i) the
recovery of all damages, (ii) the recovery of any portion of the Lease
Balance in excess of the Sale Option Recourse Amount and (iii) the
recovery of any other amounts due and payable by Lessee under the Operative
Documents, in each case, from the proceeds of the sale, lease, foreclosure,
repossession or other disposition of the Subject Property or any other Lessee
Collateral or (B) to any claim for indemnity under Article XII of the
Participation Agreement,  except in the
case of this clause (B), any claim under such Article XII of the
Participation Agreement for the Lease Balance in excess of the Sale Option
Recourse Amount.

 

ARTICLE XVII

LESSOR’S RIGHT TO CURE

 

              Section 17.1.       The
Lessor’s Right to Cure the Lessee’s Defaults.  The Lessor, without waiving or releasing any
obligation or Event of Default, may (but shall be under no obligation to), upon
five (5) Business Days’ prior notice to the Lessee in the case of any
Event of Default, remedy any Event of Default or default by Lessee under Section 9.1(h) of
the Participation Agreement that has occurred and is continuing for the account
and at the sole cost and expense of the Lessee, including (i) the failure
by the Lessee to maintain the insurance required by Article XIII and (ii) the
failure by Lessee to perform the obligations 
under the Related Agreements, the CSC Sublease or any Fifth Floor
Sublease pursuant to and in accordance with Section 9.1(h) of the
Participation Agreement, and may, to the fullest extent permitted by law,  the CSC Sublease, any Fifth Floor Sublease
and the Related Agreements, and notwithstanding any right of quiet enjoyment in
favor of the Lessee, enter upon the Subject Property for such purpose and take
all such action thereon as may be necessary or appropriate therefor.  No such entry shall be deemed an eviction of
Lessee.  All reasonable out-of-pocket
costs and expenses so incurred (including fees and expenses of counsel), together
with interest thereon at the Overdue Rate from the date on which such sums or
expenses are paid by the Lessor, shall be paid by the Lessee to the Lessor on
demand as Supplemental Rent.

 

29

 

ARTICLE XVIII

PURCHASE PROVISIONS

 

              Section 18.1.       Early
Termination Options.  Subject
to the conditions contained herein and without limitation of Lessee’s purchase
obligation pursuant to Section 18.2, on (a) any Business Day during
the Term, provided Lessee has not elected the Sale Option, or (b) on any
Business Day after the occurrence of an Event of Default, Lessee may, at its
option, purchase all, but not less than all, of the Subject Property (the “Early Termination Option”) at a price equal to the Purchase
Amount.  The Early Termination Option
shall terminate automatically and without notice upon the occurrence of an
Event of Default arising as a result of an Insolvency Event.  Upon the occurrence of any other Event of
Default, Lessee shall be permitted to purchase the Subject Property so long as
Lessee pays the Collateral Agent or Lessor the Purchase Amount and Lessee
executes such documents as are necessary to consummate such purchase within 10
Business Days after Lessee’s receipt of written notice of the Lessor’s exercise
of any remedy under Section 16.2 hereof or Section 24.2(d) hereof.  Except as provided for in the preceding
sentence, in order to exercise the Early Termination Option, Lessee shall
deliver to Lessor and the Collateral Agent, a written notice (the “Purchase Notice”) not less than thirty (30) days’ prior to
the date upon which it intends to consummate the Early Termination Option,
which Purchase Notice shall be irrevocable when made.  If the Lessee exercises the Early Termination
Option then, upon the Lessor’s receipt of all amounts due in connection
therewith, the Lessor shall transfer to the Lessee all of the Lessor’s right,
title and interest in and to the Subject Property in accordance with the
procedures set forth in Section 21.1, such transfer to be effective as of
the date specified in the Purchase Notice. 
The Lessor agrees that it shall cooperate with the Lessee in effecting
any transfer to a designee of the Lessee pursuant to this Section 18.1.

 

              Section 18.2.       Acceleration
of Subject Property Purchase. 
(a) The Lessee shall be obligated to purchase for an amount equal
to the Purchase Amount the Lessor’s interest in the Subject Property
(notwithstanding any prior election to exercise its Early Termination Option
pursuant to Section 18.1) (i) automatically and without notice upon
the occurrence of an Event of Default described in Section 16.1(g),
whether or not another Event of Default described in one or more other clauses
of Section 16.1 shall have been or thereafter is declared, and (ii) as
provided for at Section 16.2(e), upon written demand of the Lessor upon any
other Event of Default.

 

                (b)       Any purchase under this Section 18.2
shall be in accordance with the procedures for transfer set forth in Section 21.1.

 

30

 

ARTICLE XIX

END OF TERM OPTIONS

 

             Section 19.1.           End
of Term Options. At least 120 days before the Expiration Date,
Lessee shall, by delivery of written notice to Lessor and Collateral Agent,
exercise one of the options provided in paragraph (a) or (b) below:

 

                (a)           Commit
to purchase for an amount in immediately available funds equal to the Purchase
Amount all, but not less than all, of the Subject Property on or before the
last day of the Term (the “Purchase Option”);
and if Lessee shall have elected to purchase the Subject Property, (1) Lessee
may (A) assign its right to purchase the Subject Property hereunder to a
third party, in which case such third party shall consummate the purchase of
the Subject Property on or before the last day of the Term, provided that if such third party fails to consummate the
purchase of the Subject Property on or before the last day of the Term, Lessee
shall consummate the purchase of the Subject Property on the last day of the
Term or (B) designate a third party to acquire title to the Subject
Property, without assigning Lessee’s rights to purchase the Subject Property
hereunder and (2) Lessor shall, upon the payment to Lessor of the Purchase
Amount then due and payable by Lessee under the Operative Documents, transfer
all of Lessor’s right, title and interest in and to the Subject Property
(including, to the extent permitted thereby, the Related Agreements) to Lessee
or such other party designated by Lessee pursuant to Section 21.1; or

 

                (b)           Commit
to sell on behalf of Lessor in accordance with Article XX for cash to a
single purchaser not in any way affiliated with Lessee or any of its Affiliates
all, but not less than all, of the Subject Property and the CSC Sublease on the
last day of the Term (the “Sale Option”);
provided, however, that Lessee’s right
to sell the Subject Property and the CSC Sublease  pursuant to the Sale Option shall be
conditioned upon and subject to the fulfillment by Lessee of each of the terms
and conditions set forth in Article XX. 
All subleases with respect to the Subject Property (other than those
that constitute Related Agreements, any subleases entered into by the tenants
under the Related Agreements in accordance with the terms thereof, and the CSC
Sublease in accordance with Section 6.1 to the extent that the CSC
Sublease remains in effect with respect to one floor of the Facility) shall
have been terminated prior to consummation of the Sale Option.  Lessee shall not enter into any additional
subleases or renew any subleases with respect to the Subject Property and the
CSC Sublease following Lessee’s election of the Sale Option.  Following Lessee’s election of the Sale
Option, Lessee shall not remove any Modifications (other than Lessee
Improvements) or commence any Modifications (other than Required Modifications)
without the consent of the Required Participants.

 

31

 

             Section 19.2.           Election of Options.  Unless (i) Lessee shall have
affirmatively elected the Sale Option within the time period provided for in Section 19.1
and satisfied each of the requirements in Articles XX and XXI or (ii) Lessee
shall have affirmatively elected to purchase the Subject Property pursuant to Section 18.1,
Lessee shall be deemed to have elected the Purchase Option.  In addition, the Sale Option shall
automatically be revoked if there exists a Default (other than a Limited
Recourse Default), Event of Default (other than a Limited Recourse Event of
Default), Significant Environmental Event, Significant Casualty or Significant
Condemnation at any time after the Sale Option is properly elected or Lessee
fails to comply with each of the terms and conditions set forth at Articles XX
and XXI and in such event Lessor shall be entitled to exercise all rights and
remedies provided in Article XVI. 
Lessee may not elect the Sale Option if there exists on the date the
election is made a Default (other than a Limited Recourse Default), an Event of
Default (other than a Limited Recourse Event of Default), Significant
Environmental Event, Significant Casualty or Significant Condemnation.  Any election by Lessee of the Purchase Option
pursuant to Section 19.1(a) shall be irrevocable at the time made.

 

ARTICLE XX

SALE OPTION

 

             Section 20.1.           Sale Option Procedures. 
The Lessee’s effective exercise and consummation of the Sale Option with
respect to the Subject Property shall be subject to the due and timely
fulfillment of each of the following provisions as to the Subject Property as
of the dates set forth below.

 

                (a)           (i) the
Lessee shall have given to the Lessor and the Collateral Agent written notice
of the Lessee’s exercise of the Sale Option in accordance with Section 19.1
and (ii) Lessee shall have obtained all authorizations, consents and
approvals from any Governmental Authority and any Person (including, without
limitation, the counterparties to the Related Agreements and the CSC Sublease)
required to be obtained to effectively consummate the Sale Option.

 

                (b)           No
Event of Default (other than a Limited Recourse Event of Default), Default
(other than a Limited Recourse Default), Significant Environmental Event,
Significant Casualty or Significant Condemnation shall have occurred and be
continuing on or at any time following the date of Lessee’s notice of exercise
of the Sale Option.

 

                (c)           Upon
surrender of the Leased Property, (i) the Leased Property shall be in the
condition required by Section 9.1 and (ii) the Lessee shall have
completed or caused to be completed and paid the cost of all Modifications
commenced prior to the Expiration Date, and Lessee shall have caused to be
completed prior to the Expiration Date the repair and rebuilding of the
affected portions of the Leased Property suffering a Casualty or Condemnation.

 

                (d)           The
Lessee shall, as nonexclusive agent for the Lessor, use commercially reasonable
efforts to obtain the highest cash purchase price for the Subject
Property.  Subject to clause (h) below,
the Lessee will be responsible for hiring brokers and making the Subject
Property and copies of all Related Agreements and subleases, if any, that
survive the Expiration Date or the termination of the Lease available for
inspection by prospective purchasers, and subject to Section 20.1(h) below
all marketing of the Subject Property shall be at Lessee’s expense.  

 

32

 

The Lessee shall, upon
reasonable notice during normal business hours (subject to Lessee’s customary
security and safety measures), upon request, permit inspection of the Subject
Property and any Leased Property Records by the Lessor, the Collateral Agent,
any Lender and any potential purchasers, and shall otherwise do all things
reasonably necessary to sell and deliver possession of the Subject Property to
any purchaser.

 

                (e)           The
Lessee shall use commercially reasonable efforts to procure bids from one or
more bona fide prospective purchasers to purchase the Subject Property.  No such purchaser shall be the Lessee or any
Affiliate of the Lessee.

 

                (f)            The
Lessee shall submit all bids to the Lessor, the Collateral Agent and the
Lenders, and the Lessor will have the right to review the same and if directed
to submit any one or more bids.  All bids
shall be on an all-cash basis unless the Lessor and the Lenders shall otherwise
agree in their sole discretion and shall be for an amount not less than the
Fair Market Value of the Subject Property. 
The Lessee shall use commercially reasonable efforts to deliver to the
Lessor and the Lenders not less than ninety (90) days prior to the Expiration
Date a binding written unconditional (except as set forth below), irrevocable
offer by such purchaser or purchasers offering the highest all cash bid to
purchase all, but not less than all, of the Subject Property (unless otherwise
agreed to by the Lessor and the Lenders).  
Lessor and the Lenders (A) shall have the sole authority to
determine whether to accept the highest all cash bid for the Subject Property; provided, however, that to the extent the sum of the Sale
Option Recourse Amount (reduced by any amounts to be distributed to Collateral
Agent or any Participant pursuant to clause first of Section 5.3(d)(i) of
the Participation Agreement) and the all cash Net Sales Proceeds for the
Subject Property equals or exceeds the Lease Balance and all other amounts due
and owing herein, Lessor and the Lenders shall be deemed to have accepted such
bid and (B) if accepted or deemed accepted by Lessor and the Lenders,
Lessee shall sell the Subject Property on the Expiration Date in accordance
with the terms of such bid to the purchaser submitting such bid and comply with
and satisfy the requirements and covenants of clause (v) of Section 21.1,
and on the Expiration Date, Lessee shall pay to Collateral Agent all such
amounts and the Gross Proceeds as are required to be paid on such date pursuant
to Sections 20.1(i), 20.1(j) and 20.1(k).  If, within 45 days prior to the Expiration
Date, the all-cash Net Sales Proceeds for the Subject Property offered in the
bids submitted by Lessee for Lessor’s and the Lenders’ acceptance together with
the Sale Option Recourse Amount (reduced by any amounts to be distributed to
Collateral Agent or any Participant pursuant to clause first of Section 5.3(d)(i) of the Participation
Agreement) do not equal or exceed the then outstanding Lease Balance and all
such bids were not previously accepted (or deemed accepted), then Lessor or the
Lenders may in their respective sole and absolute discretion accept or reject
such bids.

 

                (g)           In
connection with any such sale of the Subject Property, the Lessee will provide
to the purchaser all customary “seller’s” indemnities (including, without
limitation, an environmental indemnity to the extent the same is required by
the purchaser), representations and warranties regarding title, absence of
Liens (except Lessor Liens and Permitted Liens of the type described in clauses
(i) (excluding Liens relating to the interest or rights of Lessee), (ii),
(iii), (vii), (viii) or (ix) of the definition of “Permitted Liens”) and the condition of the Subject Property
(including, without limitation, compliance with all Environmental Laws).  

 

33

 

The Lessee shall have
obtained, at its cost and expense, all required governmental and regulatory
consents and approvals and shall have made all filings as required by
Applicable Laws in order to carry out and complete the transfer of the Subject
Property so that the Leased Property can be operated for its intended use as an
office and retail facility.  As to the
Lessor, any such sale shall be made on an “as is, where is, with all faults”
basis without representation or warranty by the Lessor, other than the absence
of Lessor Liens.  Any agreement as to
such sale shall be in form and substance reasonably satisfactory to the Lessor.

 

                (h)           All
Sales Costs shall be paid from the Gross Proceeds of the Subject Property.  The Lessee shall pay or cause to be paid
directly, and not from the sale proceeds of the Subject Property, all Marketing
Costs which, in aggregate, do not exceed $100,000 (the “Marketing
Costs Cap”).

 

                (i)            Whether
or not a sale of the Subject Property is completed on the Expiration Date, the
Lessee shall pay to the Lessor on or prior to the Expiration Date (or in the
case of Supplemental Rent, to the Person entitled thereto) an amount equal to (i) the
Sale Option Recourse Amount plus (ii) all accrued and unpaid Rent
(including Supplemental Rent, if any) and all other amounts hereunder which
have accrued or will accrue prior to or as of the Expiration Date, in the type
of funds specified in, and in accordance with, Section 3.4 hereof.

 

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

 

                (k)           If
a sale of the Subject Property shall be consummated on or before the Expiration
Date, Lessee shall pay or cause to be paid (i) Sales Costs out of the
Gross Proceeds from the sale of the Subject Property, (ii) Marketing Costs
(not to exceed the Marketing Costs Cap) to the Person entitled thereto and (iii) to
Lessor, the Net Sales Proceeds of such sale of the Subject Property, which Net
Sales Proceeds shall be applied pursuant to Section 5.3(d) of the
Participation Agreement.

 

                (1)           The
Lessee shall, to the extent permitted by Applicable Laws, assign, and shall
cooperate with all reasonable requests of the Lessor or the purchaser for
obtaining any and all licenses, permits, approvals and consents of any
Governmental Authorities or other Persons that are or will be required to be
obtained by the Lessor or such purchaser in connection with its use, operation,
control or maintenance of the Subject Property in compliance with Applicable
Laws.

 

                (m)          Prior
to the Expiration Date, Lessee shall, subject to the Marketing Costs Cap,
furnish to the Lessor, the Collateral Agent, and each Lender and, if the
Subject Property is to be sold on the Expiration Date, the independent
purchaser hereunder a reasonably current Environmental Audit dated no earlier
than forty-five (45) days prior to the Expiration Date and addressed to each
such party.  Such Environmental Audit
shall be prepared by an environmental consultant selected by the Collateral
Agent and the Lessor and reasonably acceptable to the Lessee and shall contain
conclusions satisfactory to the Participants and such purchaser as to the
environmental status of the Subject Property. 

 

34

 

If the Subject Property
is sold during the Extended Remarketing Period pursuant to Section 20.3,
such Environmental Audit shall be updated to a date not later than forty-five
(45) days prior to the date of such sale and be subject to the reevaluation of
the Lessor and the Lenders and if applicable, the independent purchaser on the
same basis as provided in the preceding sentence.  If any such Environmental Audit indicates any
Remediation is required or that a Phase II environmental assessment is
required, Lessee shall undertake such Remediation or obtain such Phase II
environmental assessment and undertake any Remediation indicated in such
Phase II environmental assessment, and prior to the Expiration Date shall
obtain a written statement by such environmental consultant indicating in his
or her opinion that all remedial actions indicated in such environmental
assessment or further environmental assessment have been undertaken and
completed  in compliance with Applicable
Laws.

 

If one or more of the foregoing provisions of this Section 20.1
shall not be fulfilled as of the date set forth above, then the Lessor shall
declare by written notice to the Lessee the Sale Option to be null and void
(whether or not it has been theretofore exercised by the Lessee), in which
event all of the Lessee’s rights under this Section 20.1 shall immediately
terminate and the Lessee shall be obligated to purchase the Subject Property
pursuant to Section 19.1(a) on the Expiration Date.

 

Except as expressly set forth herein, the Lessee shall
have no right, power or authority to bind any Participant  in connection with any proposed sale of the
Subject Property.

 

             Section 20.2.           Certain Obligations Continue.  During the period following Lessee’s exercise
of the Sale Option up to and including the Expiration Date, the obligation of
the Lessee hereunder, including the obligation to pay Rent with respect to the
Leased Property (including the installment of Rent due on the Expiration Date),
shall continue undiminished.  The Lessor
shall have the right, but shall be under no duty, to solicit bids, to inquire
into the efforts of the Lessee to obtain bids or otherwise to take action in
connection with any such sale, other than as expressly provided in this Article XX.

 

             Section 20.3.           Failure
to Sell Subject Property.  If
Lessee shall exercise the Sale Option and shall fail to sell the Subject
Property on the Expiration Date in accordance with and subject to the
provisions of Section 20.1, then Lessee and Lessor hereby agree as
follows:

 

                (a)           Lessee
shall, if requested by Lessor, continue to use reasonable commercial efforts as
non-exclusive agent for Lessor to sell the Subject Property on behalf of Lessor
in accordance with this Article XX for the period (the “Extended Remarketing Period”) commencing on the Expiration
Date and ending on the earlier of (i) the sale of the Subject Property in
accordance with the provisions of this Article XX or such earlier date as
Lessor has received payment in full of the Lease Balance and all accrued and
unpaid Rent and (ii) the date that is two years after the Expiration
Date.  Without limiting the foregoing,
all of the provisions of Section 20.1 (excluding subsections (a)(i), (b) (other
than with respect to obligations of the Lessee that survive the termination of
this Lease pursuant to Section 20.3(b) below), and (k) thereof)
shall be applicable to the Extended Remarketing Period and any sale during such
period.  

 

35

 

Lessor’s appointment of
Lessee as Lessor’s nonexclusive agent to use its reasonable commercial efforts
to obtain the highest all-cash price for the purchase of the Subject Property
shall not restrict Lessor’s right to market or lease the Subject Property or to
retain one or more sales agents or brokers at Lessee’s sole cost and expense
(subject to Section 20.1(h)), or the right of any Participant to submit or
cause to be submitted bids for the Subject Property in the manner contemplated
by Section 20.1.

 

                (b)           On
the Expiration Date, Lessee shall return possession of the Leased Property to
Lessor in accordance with and otherwise, in the condition required by, this
Lease (including each of the requirements and conditions set forth at Section 20.1(c),
Section 20.1(i) and Section 20.1(m)).  Thereafter, this Lease shall terminate,
except with respect to any obligations of Lessee pursuant to Article XIII
of the Participation Agreement and Section 25.1 of this Lease that
expressly survive such termination and the obligations of Lessee under this Section 20.3
and Section 21.1 of this Lease, and Lessee shall have no further
obligation to pay Rent which would otherwise accrue after the date of such
termination or to perform any other obligations under the Lease.  Following the Expiration Date, Lessor shall
be free to sell or lease all or any portion of the Subject Property to any
party at such reasonable times and for such amounts as Lessor deems
commercially reasonable and appropriate in order to maximize Lessor’s
opportunity to recover the Post-Expiration Date Balance.  Sales Costs shall be paid out of the Gross
Proceeds of the sale of the Subject Property and Net Sales Proceeds from the
sale of the Subject Property shall be applied as provided in Section 5.3(d)(ii) of
the Participation Agreement.  Following
the Expiration Date, Lessor shall have the right to enter into leases for all
or any portion of the Subject Property at fair market rentals and otherwise on
commercially reasonable terms, and the net operating cash flow therefrom shall
be payable to Lessor in reduction of the Lessor Balance.

 

                (c)           Lessor
reserves all rights under this Lease and the other Operative Documents arising
out of Lessee’s breach of any provisions of this Lease (including this Article XX),
occurring prior to or on the Expiration Date, including the right to sue Lessee
for damages.

 

                (d)           To
the greatest extent permitted by Applicable Laws and subject to Section 20.3(e) below,
Lessee hereby unconditionally and irrevocably waives, and releases Lessor from,
any right to require Lessor, the Collateral Agent and the Lenders during the
Extended Remarketing Period to sell the Subject Property in a timely manner or
for any minimum purchase price or on any particular terms and conditions,
Lessee hereby agreeing that if Lessee shall elect the Sale Option, its ability
to sell the Subject Property on or prior to the Expiration Date and to cause
any Person to submit a bid to Lessor pursuant to Section 20.1 shall
constitute full and complete protection of Lessee’s interest hereunder.

 

                (e)           If
the Subject Property have not been sold by the Expiration Date, Lessor shall
obtain an appraisal from an independent MAI real estate appraiser selected by
Lessor, Lessee and the Collateral Agent which shall establish the Fair Market
Value of the Subject Property as of the Expiration Date.  

 

36

 

If the Subject Property
have not been sold by the two-year anniversary of the Expiration Date, then
Lessor shall pay to Lessee the lesser of (x) the Sale Option Recourse
Amount and (y) the positive difference, if any, between the Fair Market
Value of the Leased Property and the sum of the outstanding Lease Balance (as
of the Expiration Date after giving effect to any payments by Lessee or third
parties (including, without limitation, proceeds of insurance or Condemnation)
on or before such date which reduced the Lease Balance) plus an amount equal to
the estimated Post-Closing Sales Costs assuming an actual sale to a third party
in an arm’s-length transaction had occurred on the two-year anniversary of the
Expiration Date (as of the two-year anniversary of the Expiration Date).  The amount to be paid to Lessee pursuant to
the immediately preceding sentence shall include interest on such amount at the
Lessee Interest Rate accruing from the Expiration Date until but not including
the date of such payment.  The estimate
of Post-Closing Sales Costs as provided for above shall be made by Lessor based
on available information relating to similar commercial real estate sales of
real property located in the State of Texas and the county where the Subject
Property is located.

 

(f)         In the event that the Subject Property
is not sold within two (2) years after the Expiration Date and upon
payment by Lessor of the amount, if any, required in clause (e) above at
the end of such two-year period, Lessee shall have no further right, title or
interest in and to the Subject Property or any proceeds thereof, which in each
case shall remain the sole and exclusive property of the Lessor.

 

(g)        On the Expiration Date, (i) the
Lessee shall, at its own cost and expense, execute and deliver to the Lessor,
an assignment of all of the right, title and interest of the Lessee in the CSC
Sublease, free and clear of all Liens other than Permitted Liens of the type
described in clauses (i) (excluding Liens relating to the rights and
interest of the Lessee), (ii), (iii), (vii), (viii) or (ix) of the definition
of “Permitted Liens” and (ii) the
Lessor shall assume the CSC Sublease, solely with respect to all of the
obligations of Lessee under the CSC Sublease occurring after the Expiration
Date (other than any obligations to “build out” the leased premise subject to
the CSC Sublease) and become the lessor thereunder.

 

ARTICLE XXI

PROCEDURES RELATING TO PURCHASE OR SALE OPTION

 

             Section 21.1.           Provisions Relating to Conveyance of
the Subject Property Upon Purchase by the Lessee, Sales or Certain Other Events.  In connection with any termination of this
Lease pursuant to the terms of Article XV, any purchase of the Subject
Property in accordance with Article XVIII or in connection with the Lessee’s
obligations under Section 16.2(e), or any other conveyance or purchase of
the Subject Property made pursuant to the terms of this Lease then, upon the
date on which this Lease is to terminate with respect to the Leased Property
and upon tender by the Lessee of the amounts set forth in Article XV,
Sections 16.2(e), 18.1 or 18.2, as applicable:

 

37

 

                (i)            subject
to clause (vi) of this Section 21.1, the Lessor shall execute and deliver to
the Lessee (or to the Lessee’s designee) at the Lessee’s cost and expense and
subject to clause (vi) of this Section 21.1, (x) a special warranty deed
(warranting as to Lessor Liens only) with respect to the Subject Property, (y)
a quitclaim assignment of the entire interest of the Lessor in the Subject
Property (which shall include an assignment of all of the right, title and
interest of the Lessor in and to any insurance proceeds or condemnation award
with respect to the Subject Property not previously received by the Lessor and
an assignment of the leases comprising the Subject Property) and the Related
Agreements in each case in recordable form, and (z) a FIRPTA Affidavit, in each
case, otherwise in conformity with local custom and without any representation
or warranty of any kind except as to the absence of any Lessor Liens;

 

                (ii)           subject
to clause (vi) of this Section 21.1, the Subject Property shall be conveyed to
the Lessee (or to the Lessee’s designee) “AS IS, WHERE IS” and in its then
present physical condition;

 

                (iii)          subject
to clause (vi) of this Section 21.1, the Lessor shall execute and deliver to
Lessee (or its designee) and the Lessee’s title insurance company an affidavit
as to the Lessor’s title and Lessor’s Liens attributable to it and shall
execute and deliver to the Lessee a statement of termination of this Lease.

 

                (iv)          subject
to clause (vi) of this Section 21.1, the Lessor shall execute and deliver to
Lessee a statement of termination of this Lease and shall cause the Collateral
Agent to execute and deliver releases of any Liens created by the Operative
Documents attributable to the Collateral Agent or the Lessor, and termination
statements for any financing statements which are then of record naming the
Collateral Agent or the Lessor as the secured party;

 

                (v)           if
the Lessee properly exercises the Sale Option, then, subject to Section 20.3,
the Lessee shall, on the Expiration Date, and at its own cost, transfer
possession of the Subject Property to the independent purchaser thereof, by
surrendering the Subject Property into the possession of the Lessor or such purchaser,
as the case may be, free and clear of all Liens other than Permitted Liens of
the type described in clauses (i) (excluding Liens relating to the rights and
interests of Lessee), (ii), (iii), (vii), (viii) or (ix) of the definition of “Permitted Liens”, in good condition (as modified by
Modifications permitted by this Lease), ordinary wear and tear excepted, and in
compliance in all material respects with Applicable Laws and the provisions of
this Lease, and the Lessee shall execute and deliver to the purchaser at the
Lessee’s cost and expense a deed and bill of sale with respect to the Subject
Property in each case in recordable form and otherwise in conformity with local
custom, warranting that such Subject Property is free and clear of all Liens (other
than Permitted Liens of the type described in clauses (i) (relating to the
rights and interests of Lessee), (ii), (iii), (vii), (viii) or (ix) of the
definition of “Permitted Liens”), the Lessee shall execute and deliver to the
purchaser and the purchaser’s title insurance company an affidavit as to the
absence of any Liens (other than Permitted Liens), and such other affidavits
and certificates reasonably requested by any title insurance company insuring
title to the Subject Property, as well as a FIRPTA affidavit, and an instrument
in recordable form declaring this Lease to be terminated on the date of closing
of the sale of the Subject Property.  

 

38

 

The Lessee shall, on and
within a reasonable time before and up to one year after the Expiration Date,
cooperate reasonably with the Lessor and the purchaser of the Subject Property
in order to facilitate the purchase and use by such purchaser of the Subject
Property which cooperation shall include the following, all of which the Lessee
shall do on or before the Expiration Date or as soon thereafter as is
reasonably practicable: providing all Subject Property Records and all
know-how, data and technical information relating thereto, granting or
assigning (to the extent assignable) all licenses necessary for the operation
and maintenance of the Subject Property and cooperating reasonably in seeking
and obtaining all necessary Governmental Action.  The obligations of the Lessee under this
paragraph shall survive the expiration or termination of this Lease; and

 

                (vi)          Lessee
shall, at its own cost and expense, (A) cause, to the extent required to
consummate the sale pursuant to Applicable Law, the Related Agreements, the CSC
Sublease and any Fifth Floor Sublease, as applicable, all counterparties to the
Related Agreements, the CSC Sublease and, if applicable, any Fifth Floor
Sublease to execute written consents to any such transfer, purchase or
conveyance of the Subject Property, the CSC Sublease, any Fifth Floor Sublease
and the assignment of the Related Agreements, (B) cause the Lessee or the
Collateral Agent or such third party purchaser, as applicable, to assume all
obligations of Lessor under the Related Agreements, (C) execute and deliver to
the Collateral Agent or to such third party purchaser, as applicable, an
assignment of all of the right, title and interest of the Lessee in the CSC
Sublease and, if applicable, any Fifth Floor Sublease free and clear of all
Liens other than Permitted Liens of the type described in clauses (i)
(excluding Liens relating to the rights and interest of the Lessee), (ii),
(iii), (vii), (viii) or (ix) of the definition of “Permitted
Liens”, (D) cause the Collateral Agent or such third party
purchaser, as applicable, to assume the CSC Sublease solely with respect to all
of the obligations of Lessee under the CSC Sublease occurring after the
Termination Date and to become the lessor thereunder, subject to the terms and
conditions of the SNDA, including, without limitation, any provision limiting
the Collateral Agent’s or such third party purchaser’s, as applicable,
obligation to “build out” the leased premises subject to the CSC Sublease and
(E) if any Fifth Floor Sublease is in effect, cause the Collateral Agent or
such third party purchaser, as applicable, to assume, if applicable, any Fifth
Floor Sublease, solely with respect to all of the obligations of Lessee under
any such Fifth Floor Sublease occurring after the Termination Date and to
become the lessor thereunder, subject to the terms and conditions of the SNDA,
including, without limitation, any provision limiting the Collateral Agent’s or
such third party purchaser’s, as applicable, obligation to “build out” the
leased premises subject to any such Fifth Floor Sublease.  Upon such sale, Lessor will be discharged and
relieved of all obligations under the Related Agreements.

 

 

39

 

 

 

ARTICLE XXII

ACCEPTANCE OF SURRENDER

 

Section 22.1.        Acceptance
of Surrender.  No surrender to the Lessor of this Lease or
of the Leased Property or of any part of any thereof or of any interest therein
shall be valid or effective unless agreed to and accepted in writing by the
Lessor and, prior to the payment or performance of all obligations under the
Loan Agreement, the Lenders, and no act by the Lessor or the Lenders or any
representative or agent of the Lessor or the Lenders, other than a written
acceptance, shall constitute an acceptance of any such surrender.

 

ARTICLE XXIII

NO MERGER OF TITLE

 

Section 23.1.        No
Merger of Title.  There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) title to the Subject Property, the Lessee’s or
Lessor’s interest, as applicable, in the CSC Sublease or any Fifth Floor
Sublease except as may expressly be stated in a written instrument duly
executed and delivered by the appropriate Person or (c) a beneficial
interest in the Lessor.

 

ARTICLE XXIV

INTENT OF THE PARTIES

 

Section 24.1.        Nature
of Transaction.  It is the intention of the parties that:

 

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

 

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

 

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

 

40

 

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

 

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

 

Each of the parties hereto
agrees that it will not, nor will it permit any Affiliate to at any time, take
any action or fail to take any action with respect to the preparation, filing
or audit of any income tax return, including an amended income tax return, to
the extent that such action or such failure to take action would be
inconsistent with the intention of the parties expressed in this Section 24.1.

 

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

 

                                                          (c)                        Specifically, but without limiting the generality of
subsection (a) of this Section 24.1, the Lessor and the Lessee
intend and agree that for the purpose of securing the Lessee’s obligations for
the repayment of the Obligations, (i) the Lease shall also be deemed to be
a security agreement and financing statement within the meaning of Article 9
of the Uniform Commercial Code; (ii) the conveyance provided for hereby
shall be deemed to be a grant by the Lessee to the Lessor, for the benefit of
the Participants, of a Lien on and security interest in all of the Lessee’s
present and future right, title and interest in and to the Leased Property and
the Lessee Collateral, including but not limited to the Lessee’s leasehold
estate therein and all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, investments, securities or other property, whether in
the form of cash, investments, securities or other property to secure such
loans, effective on the date hereof, to have and to hold such interests in the
Leased Property and the Lessee Collateral unto the Lessor, for the benefit of
the Participants; (iii) the possession by the Lessor of notes and such
other items of property as constitute instruments, money, negotiable documents
or chattel paper shall be deemed to be “possession by the secured party” for
purposes of perfecting the security interest pursuant to Section 9-313 of
the UCC; and (iv) notifications to Persons holding such property, and
acknowledgments, receipts or confirmations from financial intermediaries,
bankers or agents (as applicable) of the Lessee shall be deemed to have been
given for the purpose of perfecting such security interest under Applicable
Laws.  The Lessor and the Lessee shall,
to the extent consistent with the Lease, take such actions and execute, deliver,
file and record such other documents, financing statements, mortgages and deeds
of trust as may be necessary to ensure that, if the Lease were deemed to create
a security interest in the Leased Property and the Lessee Collateral in
accordance with this Section 24.1(c), such security interest would be
deemed to be a perfected security interest in the Leased Property and the
Lessee Collateral with priority over all Liens, other than Permitted Liens,
under Applicable Laws and will be maintained as such throughout the Term.  Lessee hereby authorizes Lessor to file any
and all financing statements covering the Leased Property, the Lessee
Collateral or any part thereof that Lessor may require.

 

41

 

Section 24.2.        Liens
and Security Interests.  (a) Specifically, without
limiting the generality of Section 24.1, the Lessor and the Lessee intend
and agree that in the event of any insolvency or receivership proceedings or a
petition under the United States bankruptcy laws or any other applicable
insolvency laws or statute of the United States of America or any State or
Commonwealth thereof affecting the Lessee, the Lessor, the Collateral Agent or
any Lender or any collection actions, the transactions evidenced by the
Operative Documents shall be regarded as loans and advances made by the
Participants as unrelated third party lenders to the Lessee secured by the
Subject Property and the Lessee Collateral. 
To secure such loans and advances and other Obligations, the Lessee has
GRANTED, BARGAINED, SOLD, WARRANTED, CONVEYED and CONFIRMED, and hereby GRANTS,
BARGAINS, SELLS, WARRANTS, CONVEYS and CONFIRMS the Leased Property and the
Lessee Collateral unto the Deed of Trust Trustee, its successors and assigns
(for the benefit of the Participants) IN TRUST WITH POWER OF SALE AND RIGHT OF
ENTRY AND POSSESSION AND HEREBY GRANTS unto the Lessor, its successors and
assigns a security interest in the Leased Property and the Lessee Collateral.

 

                                               (b)                     Specifically, but without limiting the generality of Section 24.1,
the Lessor and the Lessee further intend and agree that, for the purpose of
securing the obligation of the Lessee for the repayment of the above-described
loans to the Lessee, (i) this Lease shall also be deemed to be a security
agreement and financing statement within the meaning of Article 9 of the
Uniform Commercial Code and a real property mortgage and deed of trust; (ii) the
conveyance provided for hereby and in Section 2 of this Lease shall be
deemed to be a grant by the Lessee to the Deed of Trust Trustee and its
successors and assigns in trust for the use and benefit of the Lessor (for the
benefit of the Participants) of a mortgage lien and security interest in all of
the right, title and interest of the Lessee in and to the Leased Property, the
Lessee Collateral and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, investments, securities or other property (it being
understood that the Lessee hereby grants a security interest in the Leased
Property, the Lessee Collateral and all proceeds thereof to the Deed of Trust
Trustee and its successors and assigns in Trust, for the use and benefit of the
Lessor (for the benefit of the Participants), to secure the loans and advances
described in Section 24.2(a)); (iii) the possession by the Lessor or
any of its agents of notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for
purposes of perfecting the security interest pursuant to Section 9-305 of
the Uniform Commercial Code; and (iv) notifications to Persons holding
such property, and acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of the Lessee shall be deemed
to have been given for the purpose of perfecting such security interest under
all Applicable Laws.  The Lessor and the
Lessee shall, to the extent consistent with this Lease, take such actions and
execute, deliver, file and record such other documents and financing statements
as may be necessary to ensure that, if this Lease was deemed to create a
security interest in the Leased Property and the Lessee Collateral in
accordance with this Section 24.2, such security interest would be deemed
to be a perfected security interest (subject only to Permitted Liens) and will
be maintained as such throughout the Term. 
Lessee hereby authorizes Lessor to file any and all financing statements
covering the Leased Property, the Lessee Collateral or any part thereof that
Lessor may require.

 

42

 

Certain of the personal property covered by this Lease
is or will become fixtures on the real property which is a part of the Leased Property,
and this Lease (or a memorandum thereof) upon being filed for record in the
real estate records of the county wherein such fixtures are situated shall
operate also as a financing statement filed as a fixture filing in accordance
with the applicable provisions of the Uniform Commercial Code of the State of
Texas upon such of the property which are or may become fixtures.  The mailing address of Lessee (as debtor) and
the address of Lessor (as secured party) from which information may be obtained
are set forth in the introductory paragraph of this Lease.  The Lessee has an interest of record in such
real property.  The identification number
of the Lessee in Delaware is 2653461.

 

                                                (c)                     Specifically, but without limiting the foregoing or
the generality of Section 24.1, Lessee hereby grants, bargains, sells,
warrants, conveys, aliens, remises, releases, assigns, sets over and confirms
to the Deed of Trust Trustee and its successors and assigns in trust WITH POWER
OF SALE AND RIGHT OF ENTRY AND POSSESSION, for the use and benefit of the
Lessor, its successors and assigns, and grants Lessor, its successors and
assigns a security interest in all of Lessee’s right, title, and interest,
whether now owned or hereafter acquired, in and to the following (collectively,
the “Lessee Collateral”): (i) the
Leased Property, (ii) the real estate lying and being in the County of
Travis in the State of Texas (the “State”) more
particularly described in Exhibit A
attached hereto and made a part hereof (the “Land”),
together with and including but not limited to the leasehold estate interest in
such real estate created under and pursuant to the Ground Lease, this Lease, or
any other lease or sublease; all estate, right and title of Lessee in
possession or expectancy in and to such property or any part thereof; and all
Appurtenant Rights relating thereto; (iii) all buildings and improvements
(including but not limited to the Improvements) of every kind and description
heretofore or hereafter erected or placed on the Land; (iv) all materials
intended for construction, reconstruction, alteration and repairs of the
buildings and improvements now or hereafter erected thereon, all of which
materials shall be deemed to be included within the premises immediately upon
the delivery thereof; (v) all fixtures attached to the Land or
Improvements and all equipment used in connection with the operation,
protection and maintenance of the Land and the Improvements attached to the
Land and the buildings and improvements now or hereafter located thereon
including but not limited to all heating, lighting, plumbing, ventilating, air
conditioning, refrigerating, water cooling, incinerator, compacting, elevator,
escalator, cleaning systems, sprinkler systems and other fire prevention and
extinguishing apparatus used in connection with the operation, protection and
maintenance of the Land and the Improvements; (vi) all renewals or
replacements thereof or articles in substitution therefor, whether or not the
same are or shall be attached to the Land, buildings or improvements in any
manner; it being mutually agreed, intended and declared that all the aforesaid
property shall, so far as permitted by law, be deemed to form a part and parcel
of the real estate and, for the purpose of this Lease, to be real estate and
covered by this Lease; and as to the balance of the property aforesaid, this
Deed of Trust is hereby deemed to be as well a Security Agreement under the
provisions of the Uniform Commercial Code of the State for the purpose of
creating hereby a security interest in said property, which is hereby granted
by Lessee as debtor to Lessor as secured party, securing the Obligations hereby
secured; (vii) this Lease and the memorandum thereof, all rent payable
under this Lease, and all other rents, income, payments, purchase prices,
receipts, revenues, issues and profits payable under this Lease or any other
Operative Document, (viii) all ground leases, leases, subleases, estates,
tenements, hereditaments, privileges, licenses, franchises, appurtenances, agreements,
contracts, reversions and remainders whatsoever, in any way belonging, relating
or appertaining to the Leased Property or any part thereof (including but not
limited to the Related Agreements, the CSC Sublease and any Fifth Floor
Sublease); (ix) all easements, rights-of-way, strips and gores of land,
vaults, streets, ways, alleys, tunnels, passages, sewer rights, waters, water
courses, water rights, minerals, flowers, shrubs, crops, trees and other
emblements now or hereafter located on the Land or under or above the Land or
any part or thereof; (x) all rental agreements and arrangements of any
sort now or hereafter affecting the Leased Property or any portion thereof and
providing for or resulting in the payment of money for the use of the Leased Property
or any portion thereof, whether the user enjoys the Leased Property or any
portion thereof as tenant for years, licensee, tenant at sufferance or
otherwise, and irrespective of whether such agreements and arrangements be oral
or written, and including any and all extensions, renewals and modifications
thereof  and guaranties of the
performance or obligations of any tenants or lessees thereunder; (xi) all
reversions, income, rents, issues, revenues and profits thereof, including all
interest in all rents, issues and profits of the aforementioned property and
all rents, issues, profits, revenues, royalties, bonuses, rights and benefits
due, payable or accruing (including all deposits of money as advanced rent or
for security) under any and all leases or subleases and renewals thereof, or
under any contracts or options for the sale of all or any part of, said
property (including during any period allowed by law for the redemption of said
property after any foreclosure or other sale), together with the right, but not
the obligation, to collect, receive and receipt for all such rents and other
sums and apply them to the Obligations hereby secured and to demand, sue for
and recover the same when due or payable; provided that
the assignments made hereby shall not impair or diminish the obligations of
Lessee under the provisions of such leases, subleases, or other agreements nor
shall such obligations be imposed upon the Deed of Trust Trustee or Lessor;
(xii) all books and records relating to or used in connection with the
operation of the Leased Property or any part thereof; (xiii) all consents,
licenses, building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or operation of
the Leased Property or any part thereof; (xiv) all management contracts,
service contracts, utility contracts, documents and agreements relating to the
construction of any improvements (including any and all construction contracts,
architectural contracts, engineering contracts, designs, plans, specifications,
drawings, surveys, tests, reports, bonds and governmental approvals) and all
other contracts, licenses and permits now or hereafter affecting the Leased
Property or any part thereof and all guaranties and warranties with respect to
any of the foregoing; (xv) all insurance policies (including title insurance
policies) required to be maintained under the Operative Documents, including
the right to collect and receive such proceeds, and including any unearned
premiums thereon; (xvi) all utility, escrow and all other deposits and all
letters of credit, certificates of deposit, negotiable instruments and other
rights and evidence of rights to cash now or hereafter relating to the Leased
Property; (xvii) all judgments, awards of damages, settlements, payments, and
other compensation heretofore or hereafter made resulting from condemnation
proceedings or the taking of the Leased Property or any part thereof or any
building or other improvement now or at any time hereafter located thereon or
any easement or other appurtenance thereto under the power of eminent domain,
or any similar power or right (including any award from the United States
Government at any time after the allowance of the claim therefor, the
ascertainment of the amount thereof and the issuance of the warrant for the
payment thereof), whether permanent or temporary, or for any damage (whether
caused by such taking or otherwise) to said property or any part thereof or the
improvements thereon or any part thereof, or to any rights appurtenant thereto,
including severance and consequential damage, and any award for change of grade
of streets; (xviii) all property and rights, if any, which are by the express
provisions of this Lease required to be subjected to the lien hereof and any
additional property and rights that may from time to time hereafter, by
installation or writing of any kind, be subjected to the lien hereof by Lessee
or by anyone in Lessee’s behalf; (xix) all rights in and to common areas and
access roads on adjacent properties and any after-acquired title or reversion
in and to the beds of any ways, roads, streets, avenues and alleys adjoining
the Leased Property or any part thereof; (xx) all claims and causes of action
arising from or otherwise related to any of the foregoing, and all rights and
judgments related to any legal actions in connection with such claims or causes
of action; (xxi) all modifications, extensions, additions, improvements,
betterments, renewals and replacements, substitutions, or proceeds of any of
the foregoing; and (xxii) proceeds (both cash and non-cash) of the conversion,
voluntary or involuntary, of any of the foregoing into cash or other liquidated
claims, including, without limitation, all proceeds of insurance, all of which
foregoing items are hereby declared and shall be deemed to be a portion of the
security for the indebtedness and Obligations herein described, a portion of
the above described collateral being located upon the Land.  Notwithstanding the foregoing, unless (a) an
Event of Default has occurred and is continuing and Lessee receives written
notice from Lessor or the Collateral Agent directing Lessee to pay to
Collateral Agent any rents, issues, revenues, profits or other income
(including any rents or other amounts payable under the CSC Sublease, any Fifth
Floor Subleases, or any other sublease and all deposits of money as advanced
rent or for security) received by Lessee relating to the Leased Property or (b) an
Event of Default set forth in Section 16.1(g) has occurred, Lessee
shall have the right to retain, use and enjoy such income.

 

43

 

                                               (d)                     Power of Sale.  Without
limiting any other remedies set forth herein, in the event that a court of
competent jurisdiction rules that this Lease constitutes a mortgage, deed
of trust, security agreement or other secured financing with respect to the
Leased Property as is the intent of the parties pursuant to Section 24
hereof, then the Lessor and the Lessee agree that (i) the Lessee hereby
grants to the Deed of Trust Trustee and its successor and assigns in trust for
the use and benefit of the Lessor (for the benefit of the Participants) the
Leased Property (including the fee simple estate therein) and Lessee Collateral
WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION to the extent permitted by
law, and that, upon the occurrence and during the continuance of any Event of
Default, the Deed of Trust Trustee may, and is hereby irrevocably empowered to,
with or without entry, and to the extent permitted by Applicable Laws, sell or
cause the sale of the Subject Property and Lessee Collateral or any part or
parts thereof at one or more public auctions as an entirety or in parcels as
the Deed of Trust Trustee may elect free from any equity of redemption for
cash, on credit, or for other property, for immediate or future delivery, and
on such terms as the Deed of Trust Trustee shall deem advantageous and proper,
such sale or sales to be made in such manner and upon such notice and
advertisement as may be required by Applicable Laws, or in the absence of any
such requirements, as the Deed of Trust Trustee may deem appropriate, and to
make conveyance to the purchaser or purchasers. 
The Lessor (or, to the extent required by law, the Deed of Trust
Trustee) may, if at the time such action may be lawful and always subject to
compliance with any mandatory legal requirements, by filing its notice of
election and demand for sale with the Deed of Trust Trustee direct the Deed of
Trust Trustee to enforce its trust and to sell the Subject Property and the
Lessee Collateral, as an entirety or in parcels, by one sale or by several
sales, held at one time or at different times, all as the Deed of Trust Trustee
may elect, each sale to be held at the location set forth in the notice of such
proposed sale and the Deed of Trust Trustee shall have given notices of the
proposed sale in the manner hereinafter set forth, and to make due conveyance
to the purchaser or purchasers, with special warranty of title or no warranty
of title to such purchaser or purchasers binding upon the Lessee and its heirs,
executors, administrators, and successors. 
Such sale must begin at the time stated in the notice referred to below
in this Section or as otherwise permitted by Applicable Laws.  The Lessee, for itself, its heirs and
assigns, and for anyone who may claim by, through or under the Lessee, hereby
expressly and specifically waives all rights to a marshaling of the assets of the
Lessee, including the Subject Property and the Lessee Collateral, or to a sale
in inverse order of alienation.

 

44

 

The Deed of Trust Trustee (or a person or persons
selected by the Deed of Trust Trustee) shall promptly comply with all notice and
other requirements of the laws of Texas then in force with respect to such
sales, and shall give the required public notice of the time and place of such
sale by advertisement weekly in some newspaper of general circulation then
published in the County or City and County in which the Subject Property is
located.  No notice of such sale or sales
other than the notices hereinabove provided shall be required to be given to
the Lessee (or anyone who may claim by, through or under the Lessee) or any
other persons and any other notice (including, without limitation, any notice
of acceleration of, or intent to accelerate, the unpaid balance of any
Obligation) is expressly waived.

 

The provisions of this Section with respect to
posting, serving, filing, and giving notices of sale are intended to comply
with the provisions of Texas law.  In the
event the requirement for any notice, or the posting, serving, filing, or
giving thereof, under Texas law shall be eliminated or the prescribed manner of
posting, serving, filing, or giving same is modified by future amendment to
Texas law, the requirement for such particular notice shall be stricken from,
or the manner of posting, serving, filing, or giving any notice hereunder
modified in, this Deed of Trust in conformity with such amendment.  The manner herein prescribed for posting,
serving, filing, or giving any notice, other than that to be posted and filed
or caused to be posted or filed by the Deed of Trust Trustee, shall not be deemed
exclusive but such notice or notices may be posted, served, filed, or given in
any other manner which may be permitted by Applicable Laws.  Further, in relation to this Deed of Trust
and the exercise of any power of sale by the Deed of Trust Trustee hereunder,
if Texas law shall be amended or modified to require any other notice or the
posting, filing, serving, or giving thereof or any statute hereafter enacted
shall require any other notice or the posting, filing, serving, or giving
thereof, the Deed of Trust Trustee or the person selected by him is hereby
authorized and empowered by the Lessee to give such notice or make such
posting, filing, serving, or giving thereof; provided,
however, the Lessee waives such other notice or the posting, filing,
serving, or giving thereof to the full extent the Lessee may lawfully so do.

 

45

 

In addition to any other remedies granted in this Deed
of Trust to the Lessor or the Deed of Trust Trustee (including specifically,
but not limited to, the right to proceed against all the Lessee Collateral in
accordance with the rights and remedies in respect to those portions of the
Collateral which are real property pursuant to Section 9.501(d) of
the Uniform Commercial Code), the Lessor may proceed under the Uniform
Commercial Code as to all or any part of the personal property (tangible or
intangible) and fixtures included with the Lessee Collateral (such portion of
the Lessee Collateral being referred to herein as the “Personalty”)
and shall have and may exercise with respect to the Personalty all the rights,
remedies, and powers of a secured party under the Uniform Commercial Code,
including, without limitation, the right and power to sell, at one or more
public or private sales, or otherwise dispose of, lease, or utilize the
Personalty and any part or parts thereof in any manner authorized or permitted
under the Uniform Commercial Code after default by a debtor, and to apply the
proceeds thereof toward payment of any costs and expenses and attorney’s fees
and legal expenses thereby incurred by the Lessor, and toward payment of the
Obligations hereby secured in such order or manner as provided herein.

 

ARTICLE XXV

MISCELLANEOUS

 

Section 25.1.        Survival;
Severability; Etc.  Anything contained in this Lease to the
contrary notwithstanding, all claims against and liabilities of the Lessee or
the Lessor arising from events commencing prior to the expiration or earlier
termination of this Lease shall survive such expiration or earlier termination.  If any term or provision of this Lease or any
application thereof shall be declared invalid or unenforceable, the remainder
of this Lease and any other application of such term or provision shall not be
affected thereby.  If any right or option
of the Lessee provided in this Lease, including any right or option described
in Articles XIV, XV, XVIII, XIX or XX, would, in the absence of the limitation
imposed by this sentence, be invalid or unenforceable as being in violation of
the rule against perpetuities or any other rule of law relating to
the vesting of an interest in or the suspension of the power of alienation of
property, then such right or option shall be exercisable only during the period
which shall end twenty-one (21) years after the date of death of the last survivor
of the descendants of Franklin D. Roosevelt, the former President of the
United States, Henry Ford, the deceased automobile manufacturer, and
John D. Rockefeller, the founder of the Standard Oil Company, known to be
alive on the date of the execution, acknowledgment and delivery of this Lease.

 

Section 25.2.        Amendments
and Modifications.  Subject to the requirements, restrictions and
conditions set forth in the Participation Agreement, neither this Lease nor any
provision hereof may be amended, waived, discharged or terminated except by an
instrument in writing, in recordable form, signed by the Lessor and the Lessee.

 

46

 

              Section 25.3.       No Waiver.  No failure by the Lessor or the Lessee to
insist upon the strict performance of any term hereof or to exercise any right,
power or remedy upon a default hereunder, and no acceptance of full or partial
payment of Rent during the continuance of any such default, shall constitute a
waiver of any such default or of any such term. To the fullest extent permitted
by law, no waiver of any default shall affect or alter this Lease, and this
Lease shall continue in full force and effect with respect to any other then
existing or subsequent default.

 

              Section 25.4.       Notices.  All notices, demands, requests, consents,
approvals and other communications hereunder shall be in writing and directed
to the address described in, and deemed received in accordance with the
provisions of, Section 16.3 of the Participation Agreement.

 

              Section 25.5.       Successors
and Assigns.  All the terms
and provisions of this Lease shall inure to the benefit of the parties hereto
and their respective successors and permitted assigns.

 

              Section 25.6.       Headings
and Table of Contents.  The
headings and table of contents in this Lease are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof.

 

              Section 25.7.       Counterparts.  This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

 

              Section 25.8.       Governing
Law.  This Lease shall be
governed by and construed in accordance with the laws of the State of New York
except that the provisions for the creation, perfection, priority, enforcement
and foreclosure of the liens and security interests created hereunder will be
governed by and construed according to the laws of the State of Texas.

 

              Section 25.9.       Original
Lease.  The single executed
original of this Lease marked “THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART” on the signature page thereof and containing the receipt
thereof of Collateral Agent, on or following the signature page thereof
shall be the original executed counterpart of this Lease.  To the extent that this Lease constitutes
chattel paper, as such term is defined in the Uniform Commercial Code, no
security interest in this Lease may be created through the transfer or
possession of any counterpart other than such original executed counterpart.

 

            Section 25.10.       The Deed of Trust Trustee. 
The Deed of Trust Trustee is appointed hereunder solely for the purpose
of effecting the intentions of the parties set forth in Section 24.2
hereof in the State of Texas.  The Deed
of Trust Trustee shall at all times act pursuant to the directions of the
Lessor, and the Lessee shall have no power to control or direct the Deed of
Trust Trustee.  The Deed of Trust Trustee
may be removed or replaced in the sole discretion of the Lessor.  The Lessee shall pay all fees and expenses of
the Deed of Trust Trustee in connection with this Lease and the transactions
contemplated hereby, including all fees and expenses incurred in the exercise
of any remedies hereunder.

 

47

 

            Section 25.11.       Lessor
Limitations on Recourse.  The
parties hereto agree that, except as specifically set forth in the Lease or in
any other Operative Document, Lessor shall have no liability whatsoever to the
Lessee, the Lenders, Collateral Agent or any of their respective successors and
assigns or any other Person for any claim based on or in respect of this Lease
or any of the other Operative Documents or arising in any way from the Overall
Transaction; provided, however, that Lessor
shall be liable (a) for its own willful misconduct or gross negligence (or
negligence in the handling of funds), provided that a
default under, or the failure of Lessor to perform any obligation, covenant or
agreement in, any Related Agreement, the CSC Sublease or any Fifth Floor
Sublease or otherwise required by Applicable Laws, Governmental Action or third
parties with respect to the Subject Property, the CSC Sublease and any Fifth
Floor Sublease shall not be deemed gross negligence or willful misconduct, (b) Lessor
Liens on the Leased Property which are attributable to it or (c) for
liabilities that may result from the inaccuracy or incorrectness of any
representations or warranties expressly made by it in Section 8.4 of the
Participation Agreement or (d) for its failure to perform the covenants
and agreements set forth in the Lease and the Participation Agreement.

 

            Section 25.12.       Recordation
of Memorandum of Lease.  On
the Closing Date, the parties hereto will execute and record with the
appropriate recording office located in Travis County, Texas a Memorandum of
Lease in the form of Exhibit B hereto.

 

[SIGNATURE PAGES FOLLOW]

 

48

 

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

 

	
   

  	
  SILICON LABORATORIES INC., as Lessee

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ William
  G. Bock

  	
   

  
	
   

  	
  Name:  William
  G. Bock

  
	
   

  	
  Title:    Senior Vice President
  and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address: 400 West Cesar Chavez Street,
  Suite 600

  
	
   

  	
  Austin,
  TX 78701

  
	
   

  	
  Attention:
  General Counsel

  

 

	
  STATE OF TEXAS

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF TRAVIS

  	
  )

  

 

This instrument was acknowledged before me on the 14
day of March, 2008, by William G. Bock, Senior Vice President and Chief
Financial Officer of Silicon Laboratories Inc., a Delaware corporation, on
behalf of said corporation.

 

	
   

  	
  Wendy E. Byrum

  	
   

  
	
   

  	
  Notary Public State of Texas

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission expires: 9-27-2008

  

 

S-1

 

	
   

  	
  BA LEASING BSC, LLC, as Lessor

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Sonia T.
  Delen

  	
   

  
	
   

  	
  Name:  Sonia
  T. Delen

  
	
   

  	
  Title:    Senior Vice President

  
	
   

  	
   

  

 

	
  STATE OF
  CALIFORNIA

  	
  )

  
	
   

  	
  ) SS.:

  
	
  COUNTY OF SAN
  FRANCISCO

  	
  )

  

 

This instrument was acknowledged before me on the 12
day of March, 2008, by Sonia T. Delen, Senior Vice President of BA LEASING
BSC, LLC, a Delaware limited liability company, on behalf of said limited
liability company.

 

	
   

  	
  Eileen U. Harwell

  	
   

  
	
   

  	
  Notary Public State of California

  	
   

  
	
   

  	
   

  
	
   

  	
  My Commission expires: 6-28-2011

  

 

S-2

 

THIS COUNTERPART IS
THE ORIGINAL EXECUTED COUNTERPART.

 

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

 

	
   

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

  

 

	
   

  	
  By:

  	
    /s/ Scott
  Rosevear

  	
   

  
	
   

  	
   

  	
  Name:  Scott Rosevear

  	
   

  
	
   

  	
   

  	
  Title:     Vice President

  	
   

  

 

S-3

 

SCHEDULE 10.1 TO LEASE

 

MODIFICATIONS

 

Lessee shall have the right without further consent or
approval from Lessor or the Collateral Agent to remodel and renovate the
Facility affecting approximately 140,000 square feet of space and having a
projected total cost of approximately $5,000,000 (the “Initial Fit-Up Work”),
provided the Initial Fit-Up Work otherwise shall comply with the requirements
in Section 10.1(b)(ii), (iii), and (iv) and the other provisions of
this Lease.  The Initial Fit-Up Work
shall include the following work:  (i) demolition
of existing interior walls, (ii) erecting office and conference room
walls and interior doors and windows; (iii) modifying the existing
ductwork to provide heating, ventilation and air conditioning service to the
offices, conference rooms and other areas within the Facility; (iv) installing
electrical, audiovisual, telephone and data outlets, (v) relocating
lighting fixtures, (vi) installation of carpeting and other floor
coverings, (vii) installation of interior and exterior signage, (viii) installation
and/or modification of life safety and security systems, and (ix) installation
of furniture, fixtures and equipment.

 

 

 

EXHIBIT A

TO  LEASE

 

LEGAL DESCRIPTION OF LAND

 

[TO
BE ATTACHED.]

 

 

EXHIBIT B

TO  LEASE

 

When recorded return to:

 

Christopher J. Oliver, Esq.

Chapman and Cutler LLP

595 Market Street, 26th
Floor

San Francisco, CA
94105-2839

 

MEMORANDUM OF

LEASE, DEED OF TRUST AND 

SECURITY AGREEMENT

Dated as of MARCH 14, 2008

among

SILICON LABORATORIES INC.,

as Lessee

and

BA LEASING BSC, LLC,

as Lessor

and

GARY S. FARMER,

as the Deed of Trust Trustee

 

200 West Cesar Chavez
Street

Austin, Texas  78701

 

This Memorandum of Lease, Deed of Trust and Security
Agreement has been executed in multiple counterparts.  To the extent, if any, that this Memorandum
of Lease, Deed of Trust and Security Agreement constitutes chattel paper (as
such term is defined in the Uniform Commercial Code as in effect in any
applicable jurisdiction), no lien on this Memorandum of Lease, Deed of Trust
and Security Agreement may be created through the transfer or possession of any
counterpart hereof other than counterpart “Number 1,” which shall be
identified as the counterpart containing the receipt therefor executed by Wells
Fargo Bank Northwest, National Association, as Collateral Agent, on or
following the signature page thereof.

 

This
counterpart is [not] the original counterpart.

 

 

TABLE
OF CONTENTS

 

	
  SECTION

  	
   

  	
  HEADING

  	
   

  	
  PAGE

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE I

  	
   

  	
  DEFINITIONS

  	
   

  	
  B-2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE II

  	
   

  	
  LEASE
  OF LEASED PROPERTY; LEASE TERM; PURCHASE OPTION

  	
   

  	
  B-2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1.

  	
   

  	
  Leased
  Property

  	
   

  	
  B-2

  	
   

  
	
  Section 2.2.

  	
   

  	
  Term

  	
   

  	
  B-2

  	
   

  
	
  Section 2.3.

  	
   

  	
  Title

  	
   

  	
  B-2

  	
   

  
	
  Section 2.4.

  	
   

  	
   

  	
   

  	
  B-2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III

  	
   

  	
  NET
  LEASE, ETC.

  	
   

  	
  B-2

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1.

  	
   

  	
  Net
  Lease, Etc.

  	
   

  	
  B-2

  	
   

  
	
  Section 3.2.

  	
   

  	
  CONDITION
  OF THE LEASED PROPERTY

  	
   

  	
  B-3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV

  	
   

  	
  INTENT
  OF THE PARTIES

  	
   

  	
  B-3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1.

  	
   

  	
  Nature
  of Transaction

  	
   

  	
  B-3

  	
   

  
	
  Section 4.2.

  	
   

  	
  Liens
  and Security Interests

  	
   

  	
  B-5

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V

  	
   

  	
  MISCELLANEOUS

  	
   

  	
  B-9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Incorporation
  of Reference

  	
   

  	
  B-9

  	
   

  
	
  Section 5.2

  	
   

  	
  Conflict
  of Lease

  	
   

  	
  B-9

  	
   

  
	
  Section 5.3.

  	
   

  	
  Assignment
  of Lease

  	
   

  	
  B-9

  	
   

  
	
  Section 5.4.

  	
   

  	
  Notices

  	
   

  	
  B-9

  	
   

  
	
  Section 5.5.

  	
   

  	
  Successors
  and Assigns

  	
   

  	
  B-9

  	
   

  
	
  Section 5.6.

  	
   

  	
  Headings
  and Table of Contents

  	
   

  	
  B-9

  	
   

  
	
  Section 5.7.

  	
   

  	
  Counterparts

  	
   

  	
  B-9

  	
   

  
	
  Section 5.8.

  	
   

  	
  Governing
  Law

  	
   

  	
  B-10

  	
   

  
	
  Section 5.9.

  	
   

  	
  Original
  Lease

  	
   

  	
  B-10

  	
   

  
	
  Section 5.10.

  	
   

  	
  The
  Deed of Trust Trustee

  	
   

  	
  B-10

  	
   

  
	
  Section 5.11.

  	
   

  	
  Limitations
  on Recourse

  	
   

  	
  B-10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
  EXHIBITS

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  —

  	
   

  	
  Legal Description of Land

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE I

  	
   

  	
  —

  	
   

  	
  Related Agreements

  

 

 

 

MEMORANDUM
OF

LEASE, DEED OF TRUST AND SECURITY AGREEMENT

 

This Memorandum of Lease, Deed of Trust and Security
Agreement dated as of March 14, 2008 (as amended, supplemented, or
otherwise modified from time to time, this “Memorandum”),
among BA LEASING BSC, LLC, a Delaware limited liability company, having its
principal office at One Financial Plaza, Mail Code: RI1-537-05-02,
Providence, RI 02903, Attention: Gina Cabral, as Lessor (“Lessor”)
and SILICON LABORATORIES INC., a Delaware corporation, having its principal
office at 400 West Cesar Chavez Street, Suite 600, Austin, Texas 78701, as
Lessee (“Lessee”), and GARY S. FARMER, a
resident of Travis County, Texas, as the Deed of Trust Trustee for the use and
benefit of the Lessor, whose office is located at 401 Congress Avenue, Suite 1500,
Austin, Texas  78701 (the “Deed of Trust Trustee”).

 

W I T N E S S E T H:

 

A.                       The parties are entering into the
Operative Documents pursuant to which the Participants agree to provide
financing for the acquisition of the Leased Property.

 

B.                         On the Closing Date, Lessor, solely using
the Lessor Amount and the Advance funded by the Lenders, will, inter alia, (i) purchase the Facility from the Seller
and (ii) assume all of the Seller’s right, title and interest in and to (A) the
Ground Lease pursuant to the Assignment of Ground Lease, (B) the Related
Agreements which constitute leases pursuant to the Assignment of Subleases, and
(C) the other Related Agreements pursuant to the Assignment of Related
Agreements.

 

C.                         Pursuant to the Lease, Deed of Trust and
Security Agreement dated as of the date hereof among the Lessor, the Lessee and
the Deed of Trust Trustee, Lessor leases the Leased Property to Lessee and
Lessee leases the Leased Property from Lessor, and Lessee GRANTS, BARGAINS,
SELLS, WARRANTS, CONVEYS and CONFIRMS unto the Deed of Trust Trustee, its
successors and assigns (for the benefit of the Participants) IN TRUST WITH
POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION AND HEREBY GRANTS unto the
Lessor, its successors and assigns a security interest in the Leased Property
and the Lessee Collateral.

 

NOW, THEREFORE, in consideration of the foregoing, and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree to enter into this
Memorandum:

 

 

ARTICLE I

DEFINITIONS

 

For all purposes hereof, the capitalized terms used
herein and not otherwise defined shall have the meanings assigned thereto in
Appendix 1 to that certain Participation Agreement dated as of even date
herewith, among Lessee, as Lessee; Lessor; Wells Fargo Bank Northwest, National
Association, not in its individual capacity except as expressly stated therein,
but solely as Collateral Agent; and the financial institutions listed on
Schedule II thereto, as Lenders (as amended, supplemented or otherwise
modified from time to time pursuant thereto, the “Participation
Agreement”); and the rules of interpretation set forth in
Appendix 1 to the Participation Agreement shall apply to this
Memorandum.  Except as provided in Section 16.5
of the Lease, all obligations imposed on the Lessee under the Lease and this
Memorandum shall be the full recourse liability of Lessee.

 

ARTICLE II          

LEASE OF LEASED PROPERTY; LEASE TERM; PURCHASE OPTION

 

                Section 2.1.       Leased
Property.  (a) Lessor
hereby agrees to lease all of Lessor’s interest in the Leased Property to
Lessee hereunder, and Lessee hereby agrees, expressly for the direct benefit of
Lessor, to lease all of the Leased Property from Lessor for the Term.

 

                (b)       In the event that the Retail Sublease is
terminated for any reason whatsoever, Lessee and Lessor hereby agree that the
Lease and this Memorandum and the Participation Agreement shall be amended by
the parties hereto, at the expense of the Lessee, to include within the
definition of “Leased Property” all Improvements under the Retail Sublease.

 

                Section 2.2.       Term.  Unless earlier terminated, the term of this
Lease shall consist of a term (the “Term”)
commencing on the Closing Date and ending on but not including the earlier of (a) the
date which is sixty months immediately following the Closing Date or (b) any
Termination Date.

 

                Section 2.3.       Title.  The Leased Property is leased to the Lessee
without any representation or warranty, express or implied, by the Lessor and
subject to the rights of parties in possession, the existing state of title
with respect thereto (including, without limitation, all Liens other than
Lessor Liens) and all Applicable Laws and any violations thereof.  The Lessee shall in no event have any
recourse against the Lessor for any defect in or exception to title to the
Leased Property other than resulting from Lessor Liens created by Lessor.

 

                 Section 2.4       The
Lease contains certain purchase rights enforceable against and in favor of
Lessee during the Term, and certain rights in Lessee to market and sell the
Leased Property during the Term, all on terms more fully set forth in the
Lease.

 

ARTICLE III

NET LEASE, ETC.

 

                Section 3.1.       Net Lease,
Etc.  The Lease shall
constitute a net lease and Lessee’s obligations hereunder to pay Rent shall be
absolute and unconditional under any and all circumstances.

 

 

B-2

 

                Section 3.2.       CONDITION
OF THE LEASED PROPERTY.  THE
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING THE LEASED PROPERTY “AS IS”
WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) BY THE
LESSOR, THE COLLATERAL AGENT OR THE LENDERS AND IN EACH CASE SUBJECT TO (a) THE
EXISTING STATE OF TITLE (EXCLUDING LESSOR LIENS), (b) THE RIGHTS OF ANY
PARTIES IN POSSESSION THEREOF, (c) ANY STATE OF FACTS WHICH AN ACCURATE
SURVEY OR A PHYSICAL INSPECTION MIGHT SHOW AND (d) VIOLATIONS OF
REQUIREMENTS OF LAW WHICH MAY EXIST ON THE DATE HEREOF ON OR AT ANY TIME
HEREAFTER.

 

ARTICLE IV

INTENT OF THE PARTIES

 

                Section 4.1.       Nature of
Transaction.  It is the
intention of the parties that:

 

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

 

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

 

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

 

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

 

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

 

B-3

 

Each of the parties hereto
agrees that it will not, nor will it permit any Affiliate to at any time, take
any action or fail to take any action with respect to the preparation, filing  or
audit of any income tax return, including an amended income tax return, to the
extent that such action or such failure to take action would be inconsistent
with the intention of the parties expressed in this Section 4.1.

 

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

 

                   (c)        Specifically, but without limiting the
generality of subsection (a) of this Section 4.1, the Lessor and
the Lessee intend and agree that for the purpose of securing the Lessee’s
obligations for the repayment of the Obligations, (i) the Lease and this
Memorandum shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code; (ii) the
conveyance provided for hereby is and shall be deemed to be a grant by the
Lessee to the Lessor, for the benefit of the Participants, of a Lien on and
security interest in all of the Lessee’s present and future right, title and
interest in and to the Leased Property and the Lessee Collateral, including but
not limited to the Lessee’s leasehold estate therein and all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, investments,
securities or other property, whether in the form of cash, investments,
securities or other property to secure such loans, effective on the date
hereof, to have and to hold such interests in the Leased Property and the
Lessee Collateral unto the Lessor, for the benefit of the Participants; (iii) the
possession by the Lessor of notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be “possession by the secured party” for purposes of perfecting the
security interest pursuant to Section 9-313 of the UCC; and (iv) notifications
to Persons holding such property, and acknowledgments, receipts or
confirmations from financial intermediaries, bankers or agents (as applicable)
of the Lessee shall be deemed to have been given for the purpose of perfecting
such security interest under Applicable Laws. 
The Lessor and the Lessee shall, to the extent consistent with the Lease
and this Memorandum, take such actions and execute, deliver, file and record such
other documents, financing statements, mortgages and deeds of trust as may be
necessary to ensure that, if the Lease were deemed to create a security
interest in the Leased Property and the Lessee Collateral in accordance with
this Section 4.1(c), such security interest would be deemed to be a
perfected security interest in the Leased Property and the Lessee Collateral
with priority over all Liens, other than Permitted Liens, under Applicable Laws
and will be maintained as such throughout the Term.  Lessee hereby authorizes Lessor to file any
and all financing statements covering the Leased Property, the Lessee
Collateral or any part thereof that Lessor may require.

 

B-4

 

                Section 4.2.       Liens and Security Interests.  (a) Specifically,
without limiting the generality of Section 4.1, the Lessor and the Lessee
intend and agree that in the event of any insolvency or receivership
proceedings or a petition under the United States bankruptcy laws or any other
applicable insolvency laws or statute of the United States of America or any
State or Commonwealth thereof affecting the Lessee, the Lessor, the Collateral
Agent or any Lender or any collection actions, the transactions evidenced by
the Operative Documents shall be regarded as loans and advances made by the
Participants as unrelated third party lenders to the Lessee secured by the
Subject Property and the  Lessee
Collateral.  To secure such loans and
advances and other Obligations, the Lessee has GRANTED, BARGAINED, SOLD,
WARRANTED, CONVEYED and CONFIRMED, and hereby GRANTS, BARGAINS, SELLS,
WARRANTS, CONVEYS and CONFIRMS the Leased Property and the Lessee Collateral
unto the Deed of Trust Trustee, its successors and assigns (for the benefit of
the Participants) IN TRUST WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION
AND HEREBY GRANTS unto the Lessor, its successors and assigns a security
interest in the Leased Property and the Lessee Collateral.

 

                (b)       Specifically, but without limiting the
generality of Section 4.1, the Lessor and the Lessee further intend and
agree that, for the purpose of securing the obligation of the Lessee for the
repayment of the above-described loans to the Lessee, (i) the Lease and
this Memorandum shall also be deemed to be a security agreement and financing
statement within the meaning of Article 9 of the Uniform Commercial Code
and a real property mortgage and deed of trust; (ii) the conveyance
provided in this Memorandum shall be deemed to be a grant by the Lessee to the
Deed of Trust Trustee and its successors and assigns in trust for the use and
benefit of the Lessor (for the benefit of the Participants) of the Leased
Property and the Lessee Collateral and a grant or a security interest in all of
the right, title and interest of the Lessee in and to the Leased Property, the
Lessee Collateral and all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, investments, securities or other property (it being
understood that the Lessee hereby grants a security interest in the Leased
Property, the Lessee Collateral and all proceeds thereof to the Deed of Trust
Trustee and its successors and assigns in Trust, for the use and benefit of the
Lessor (for the benefit of the Participants), to secure the loans and advances
described in Section 4.2(a)); (iii) the possession by the Lessor or
any of its agents of notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
“possession by the secured party” for
purposes of perfecting the security interest pursuant to Section 9-305 of
the Uniform Commercial Code; and (iv) notifications to Persons holding
such property, and acknowledgments, receipts or confirmations from financial
intermediaries, bankers or agents (as applicable) of the Lessee shall be deemed
to have been given for the purpose of perfecting such security interest under
all Applicable Laws.  The Lessor and the
Lessee shall, to the extent consistent with the Lease and this Memorandum, take
such actions and execute, deliver, file and record such other documents and
financing statements as may be necessary to ensure that, if the Lease and this
Memorandum was deemed to create a security interest in the Leased Property and
the Lessee Collateral in accordance with this Section 4.2, such security
interest would be deemed to be a perfected security interest (subject only to
Permitted Liens) and will be maintained as such throughout the Term.  Lessee hereby authorizes Lessor to file any
and all financing statements covering the Leased Property, the Lessee
Collateral or any part thereof that Lessor may require.

 

Certain of the personal property covered by this
Memorandum is or will become fixtures on the real property which is a part of
the Leased Property, and this Memorandum upon being filed for record in the
real estate records of the county wherein such fixtures are situated shall operate
also as a financing statement filed as a fixture filing in accordance with the
applicable provisions of the Uniform Commercial Code of the State of Texas upon
such of the property which are or may become fixtures.  The mailing address of Lessee (as debtor) and
the address of Lessor (as secured party) from which information may be obtained
are set forth in the introductory paragraph of this Memorandum.  The Lessee has an interest of record in such
real property.  The identification number
of the Lessee in Delaware is 2653461.

 

B-5

                (c)       Specifically, but without limiting the
foregoing or the generality of Section 4.1, Lessee hereby grants,
bargains, sells, warrants, conveys, aliens, remises, releases, assigns, sets
over and confirms to the Deed of Trust Trustee and its successors and assigns
in trust WITH POWER OF SALE AND RIGHT OF ENTRY AND POSSESSION, for the use and
benefit of the Lessor, its successors and assigns, and grants Lessor, its
successors and assigns a security interest in all of Lessee’s right, title, and
interest, whether now owned or hereafter acquired, in and to the following
(collectively, the “Lessee Collateral”):
(i) the Leased Property; (ii) the real estate lying and being in the
County of Travis in the State of Texas (the “State”) more
particularly described in Exhibit A
attached hereto and made a part hereof (the “Land”),
together with and including but not limited to the leasehold estate interest in
such real estate created under and pursuant to the Ground Lease, the Lease and
this Memorandum, or any other lease or sublease; all estate, right and title of
Lessee in possession or expectancy in and to such property or any part thereof;
and all Appurtenant Rights relating thereto; (iii) all buildings and
improvements (including but not limited to the Improvements) of every kind and
description heretofore or hereafter erected or placed on the Land (legally
described on Exhibit A attached hereto
and made a part hereof; (iv) all materials intended for construction,
reconstruction, alteration and repairs of the buildings and improvements now or
hereafter erected thereon, all of which materials shall be deemed to be
included within the premises immediately upon the delivery thereof; (v) all
fixtures attached to the Land or Improvements and all equipment used in
connection with the operation, protection and maintenance of the Land or
Improvements attached to the Land and the buildings and improvements now or
hereafter located thereon including but not limited to all heating, lighting,
plumbing, ventilating, air conditioning, refrigerating, water cooling,
incinerator, compacting, elevator, escalator, cleaning systems, sprinkler
systems and other fire prevention and extinguishing apparatus used in
connection with the operation, protection and maintenance of the Land and the
Improvements; (vi) all renewals or replacements thereof or articles in
substitution therefor, whether or not the same are or shall be attached to the
Land, buildings or improvements in any manner; it being mutually agreed,
intended and declared that all the aforesaid property shall, so far as
permitted by law, be deemed to form a part and parcel of the real estate and,
for the purpose of the Lease and this Memorandum, to be real estate and covered
by the Lease and this Memorandum; and as to the balance of the property
aforesaid, this Memorandum is hereby deemed to be as well a Security Agreement
under the provisions of the Uniform Commercial Code of the State for the
purpose of creating hereby a security interest in said property, which is
hereby granted by Lessee as debtor to Lessor as secured party, securing the
Obligations hereby secured; (vii) the Lease and this Memorandum, all rent
payable under the Lease, and all other rents, income, payments, purchase
prices, receipts, revenues, issues and profits payable under the Lease or any
other Operative Document; (viii) all ground leases, leases, subleases,
estates, tenements, hereditaments, privileges, licenses, franchises,
appurtenances, reversions and remainders whatsoever, in any way belonging,
relating or appertaining to the Leased Property or any part thereof, (including
but not limited to the Related Agreements identified on Schedule I attached
hereto and made a part hereof, the CSC Sublease and any Fifth Floor Sublease); (ix) all
easements, rights-of-way, strips and gores of land, vaults, streets, ways,
alleys, tunnels, passages, sewer rights, waters, water courses, water rights,
minerals, flowers, shrubs, crops, trees and other emblements now or hereafter
located on the Land or under or above the Land or any part or thereof; (x) all
rental agreements and arrangements of any sort now or hereafter affecting the
Leased Property or any portion thereof and providing for or resulting in the
payment of money for the use of the Leased Property or any portion thereof,
whether the user enjoys the Leased Property or any portion thereof as tenant
for years, licensee, tenant at sufferance or otherwise, and irrespective of
whether such agreements and arrangements be oral or written, and including any
and all extensions, renewals and modifications thereof and guaranties of the
performance or obligations of any tenants or lessees thereunder; (xi) all
reversions, income, rents, issues, revenues and profits thereof, including all
interest in all rents, issues and profits of the aforementioned property and
all rents, issues, profits, revenues, royalties, bonuses, rights and benefits
due, payable or accruing (including all deposits of money as advanced rent or
for security) under any and all leases or subleases and renewals thereof, or
under any contracts or options for the sale of all or any part of, said property
(including during any period allowed by law for the redemption of said property
after any foreclosure or other sale), together with the right, but not the
obligation, to collect, receive and receipt for all such rents and other sums
and apply them to the Obligations hereby secured and to demand, sue for and
recover the same when due or payable; provided that
the assignments made hereby shall not impair or diminish the obligations of
Lessee under the provisions of such leases, subleases, or other agreements nor
shall such obligations be imposed upon the Deed of Trust Trustee or Lessor;
(xii) all books and records relating to or used in connection with the
operation of the Leased Property or any part thereof; (xiii) all consents,
licenses, building permits, certificates of occupancy and other governmental
approvals relating to construction, completion, occupancy, use or operation of
the Leased Property or any part thereof; (xiv) all management contracts,
service contracts, utility contracts, documents and agreements relating to the
construction of any improvements (including any and all construction contracts,
architectural contracts, engineering contracts, designs, plans, specifications,
drawings, surveys, tests, reports, bonds and governmental approvals) and all
other contracts, licenses and permits now or hereafter affecting the Leased
Property or any part thereof and all guaranties and warranties with respect to
any of the foregoing; (xv) all insurance policies (including title
insurance policies) required to be maintained under the Operative Documents,
including the right to collect and receive such proceeds, and including any
unearned premiums thereon; (xvi) all utility, escrow and all other
deposits and all letters of credit, certificates of deposit, negotiable
instruments and other rights and evidence of rights to cash now or hereafter
relating to the Leased Property; (xvii) all judgments, awards of damages,
settlements, payments, and other compensation heretofore or hereafter made
resulting from condemnation proceedings or the taking of the Leased Property or
any part thereof or any building or other improvement now or at any time
hereafter located thereon or any easement or other appurtenance thereto under
the power of eminent domain, or any similar power or right (including any award
from the United States Government at any time after the allowance of the claim
therefor, the ascertainment of the amount thereof and the issuance of the
warrant for the payment thereof), whether permanent or temporary, or for any
damage (whether caused by such taking or otherwise) to said property or any
part thereof or the improvements thereon or any part thereof, or to any rights
appurtenant thereto, including severance and consequential damage, and any
award for change of grade of streets; (xviii) all property and rights, if
any, which are by the express provisions of the Lease required to be subjected
to the lien hereof and any additional property and rights that may from time to
time hereafter, by installation or writing of any kind, be subjected to the
lien hereof by Lessee or by anyone in Lessee’s behalf; (xix) all rights in and
to common areas and access roads on adjacent properties and any after-acquired
title or reversion in and to the beds of any ways, roads, streets, avenues and
alleys adjoining the Leased Property or any part thereof; (xx) all claims
and causes of action arising from or otherwise related to any of the foregoing,
and all rights and judgments related to any legal actions in connection with
such claims or causes of action; (xxi) all modifications, extensions,
additions, improvements, betterments, renewals and replacements, substitutions,
or proceeds of any of the foregoing; and (xxii) proceeds (both cash and
non-cash) of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquidated claims, including, without limitation, all
proceeds of insurance, all of which foregoing items are hereby declared and
shall be deemed to be a portion of the security for the indebtedness and Obligations
herein described, a portion of the above described collateral being located
upon the Land.  Notwithstanding the
foregoing, unless (a) an Event of Default has occurred and is continuing
and Lessee receives written notice from Lessor or the Collateral Agent
directing Lessee to pay to Collateral Agent any rents, issues, revenues,
profits or other income (including any rents or other amounts payable under the
CSC Sublease, any Fifth Floor Subleases, or any other subleases and all
deposits of money as advanced rent or for security) received by Lessee relating
to the Leased Property or (b) an Event of Default set forth in Section 16.1(g) has
occurred, Lessee shall have the right to retain, use and enjoy such income.

 

B-6

 

                (d)       Power of Sale.  Without limiting any other remedies set forth
herein or in the Lease, in the event that a court of competent jurisdiction rules that
the Lease and this Memorandum constitutes a mortgage, deed of trust, security
agreement or other secured financing with respect to the Leased Property as is
the intent of the parties pursuant to Section 4 hereof, then the Lessor
and the Lessee agree that (i) the Lessee hereby grants to the Deed of
Trust Trustee and its successor and assigns in trust for the use and benefit of
the Lessor (for the benefit of the Participants) the Leased Property (including
the fee simple estate therein) and Lessee Collateral WITH POWER OF SALE AND
RIGHT OF ENTRY AND POSSESSION to the extent permitted by law, and that, upon
the occurrence and during the continuance of any Event of Default, the Deed of
Trust Trustee may, and is hereby irrevocably empowered to, with or without
entry, and to the extent permitted by Applicable Laws, sell or cause the sale
of the Subject Property and Lessee Collateral or any part or parts thereof at
one or more public auctions as an entirety or in parcels as the Deed of Trust
Trustee may elect free from any equity of redemption for cash, on credit, or
for other property, for immediate or future delivery, and on such terms as the
Deed of Trust Trustee shall deem advantageous and proper, such sale or sales to
be made in such manner and upon such notice and advertisement as may be
required by Applicable Laws, or in the absence of any such requirements, as the
Deed of Trust Trustee may deem appropriate, and to make conveyance to the
purchaser or purchasers.  The Lessor (or,
to the extent required by law, the Deed of Trust Trustee) may, if at the time
such action may be lawful and always subject to compliance with any mandatory
legal requirements, by filing its notice of election and demand for sale with
the Deed of Trust Trustee direct the Deed of Trust Trustee to enforce its trust
and to sell the Subject Property and Lessee Collateral, as an entirety or in
parcels, by one sale or by several sales, held at one time or at different
times, all as the Deed of Trust Trustee may elect, each sale to be held at the
location set forth in the notice of such proposed sale and the Deed of Trust
Trustee shall have given notices of the proposed sale in the manner hereinafter
set forth, and to make due conveyance to the purchaser or purchasers, with
special warranty of title or no warranty of title to such purchaser or
purchasers binding upon the Lessee and its heirs, executors, administrators,
and successors.  Such sale must begin at
the time stated in the notice referred to below in this Section or as
otherwise permitted by Applicable Laws. 
The Lessee, for itself, its heirs and assigns, and for anyone who may
claim by, through or under the Lessee, hereby expressly and specifically waives
all rights to a marshaling of the assets of the Lessee, including the Subject
Property and the Lessee Collateral, or to a sale in inverse order of
alienation.

 

B-7

 

The Deed of Trust Trustee (or a person or persons
selected by the Deed of Trust Trustee) shall promptly comply with all notice
and other requirements of the laws of Texas then in force with respect to such
sales, and shall give the required public notice of the time and place of such
sale by advertisement weekly in some newspaper of general circulation then
published in the County or City and County in which the Subject Property and
Lessee Collateral is located.  No notice
of such sale or sales other than the notices hereinabove provided shall be
required to be given to the Lessee (or anyone who may claim by, through or
under the Lessee) or any other persons and any other notice (including, without
limitation, any notice of acceleration of, or intent to accelerate, the unpaid
balance of any Obligation) is expressly waived.

 

The provisions of this Section with respect to
posting, serving, filing, and giving notices of sale are intended to comply
with the provisions of Texas law.  In the
event the requirement for any notice, or the posting, serving, filing, or
giving thereof, under Texas law shall be eliminated or the prescribed manner of
posting, serving, filing, or giving same is modified by future amendment to
Texas law, the requirement for such particular notice shall be stricken from,
or the manner of posting, serving, filing, or giving any notice hereunder
modified in, this Deed of Trust in conformity with such amendment.  The manner herein prescribed for posting,
serving, filing, or giving any notice, other than that to be posted and filed
or caused to be posted or filed by the Deed of Trust Trustee, shall not be
deemed exclusive but such notice or notices may be posted, served, filed, or
given in any other manner which may be permitted by Applicable Laws.  Further, in relation to this Deed of Trust
and the exercise of any power of sale by the Deed of Trust Trustee hereunder,
if Texas law shall be amended or modified to require any other notice or the
posting, filing, serving, or giving thereof or any statute hereafter enacted
shall require any other notice or the posting, filing, serving, or giving
thereof, the Deed of Trust Trustee or the person selected by him is hereby
authorized and empowered by the Lessee to give such notice or make such
posting, filing, serving, or giving thereof; provided,
however, the Lessee waives such other notice or the posting, filing,
serving, or giving thereof to the full extent the Lessee may lawfully so do.

 

B-8

 

In addition to any other remedies granted in the Lease
or this Memorandum to the Lessor or the Deed of Trust Trustee (including
specifically, but not limited to, the right to proceed against all the Lessee
Collateral in accordance with the rights and remedies in respect to those
portions of the Collateral which are real property pursuant to Section 9.501(d) of
the Uniform Commercial Code), the Lessor may proceed under the Uniform
Commercial Code as to all or any part of the personal property (tangible or
intangible) and fixtures included with the Lessee Collateral (such portion of
the Lessee Collateral being referred to herein as the “Personalty”)
and shall have and may exercise with respect to the Personalty all the rights,
remedies, and powers of a secured party under the Uniform Commercial Code,
including, without limitation, the right and power to sell, at one or more
public or private sales, or otherwise dispose of, lease, or utilize the
Personalty and any part or parts thereof in any manner authorized or permitted
under the Uniform Commercial Code after default by a debtor, and to apply the
proceeds thereof toward payment of any costs and expenses and attorney’s fees
and legal expenses thereby incurred by the Lessor, and toward payment of the
Obligations hereby secured in such order or manner as provided herein.

 

ARTICLE V

MISCELLANEOUS

 

                 Section 5.1       Incorporation
by Reference.  All of the
terms, provisions and conditions of the Lease shall be incorporated herein by
reference and this Memorandum shall serve as record notice of such terms,
provisions and conditions.

 

                 Section 5.2       Conflict of
Lease.  In the event of any
conflict between the terms and provisions of this Memorandum and the terms and
provisions of the Lease, the terms and provisions of the Lease shall be
controlling.

 

                Section 5.3.       Assignment
of Lease.  Lessee acknowledges
and agrees that all of Lessor’s interest in the Lease has been assigned,
transferred, conveyed and set over by Lessor to the Collateral Agent for the
benefit of the Participants.

 

                Section 5.4.       Notices.  All notices, demands, requests, consents,
approvals and other communications hereunder shall be in writing and directed
to the address described in, and deemed received in accordance with the provisions
of, Section 16.3 of the Participation Agreement.

 

                Section 5.5.       Successors
and Assigns.  All the terms
and provisions of the Lease and this Memorandum shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns.

 

                Section 5.6.       Headings
and Table of Contents.  The
headings and table of contents in this Memorandum are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

 

                Section 5.7.       Counterparts.  This Memorandum may be executed in any number
of counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.

 

B-9

 

 

 

                Section 5.8.       Governing
Law.  This Memorandum shall be
governed by and construed in accordance with the laws of the State of New York
except that the provisions for the creation, perfection, priority, enforcement
and foreclosure of the liens and security interests created hereunder will be
governed by and construed according to the laws of the State of Texas.

 

                Section 5.9.       Original
Lease.  The single executed
original of this Memorandum marked “THIS COUNTERPART IS THE ORIGINAL
EXECUTED COUNTERPART” on the signature page thereof and containing the
receipt thereof of Collateral Agent, on or following the signature page thereof
shall be the original executed counterpart of this Memorandum.  To the extent that this Memorandum
constitutes chattel paper, as such term is defined in the Uniform Commercial
Code, no security interest in this Memorandum may be created through the
transfer or possession of any counterpart other than such original executed
counterpart.

 

              Section 5.10.       The Deed of Trust Trustee. 
The Deed of Trust Trustee appointed hereunder is solely for the purpose
of effecting the intentions of the parties set forth in Section 4.2 hereof
in the State of Texas.  The Deed of Trust
Trustee shall at all times act pursuant to the directions of the Lessor, and
the Lessee shall have no power to control or direct the Deed of Trust
Trustee.  The Deed of Trust Trustee may
be removed or replaced in the sole discretion of the Lessor.  The Lessee shall pay all fees and expenses of
the Deed of Trust Trustee in connection with the Lease and the transactions
contemplated hereby, including all fees and expenses incurred in the exercise
of any remedies hereunder.

 

              Section 5.11.       Lessor
Limitations on Recourse.  The
provisions of Section 25.11 of the Lease are hereby incorporated by
reference.

 

[SIGNATURE PAGES FOLLOW]

 

B-10

 

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

 

	
   

  	
   

  	
  SILICON LABORATORIES, INC., as Lessee

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ William G. Bock

  
	
   

  	
   

  	
   

  	
  Name: 

  	
  William G. Bock

  
	
   

  	
   

  	
   

  	
  Title: 

  	
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  400 West Cesar Chavez Street, Suite 600

  
	
   

  	
   

  	
   

  	
  Austin, TX 78701

  
	
   

  	
   

  	
   

  	
  Attention:
  General Counsel

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  STATE OF TEXAS

  	
  )

  	
   

  	
   

  
	
   

  	
  ) SS.:

  	
   

  	
   

  
	
  COUNTY OF TRAVIS

  	
  )

  	
   

  	
   

  
							

 

This instrument was acknowledged before me on the 14
day of March, 2008, by William G. Bock, Senior Vice President and Chief
Financial Officer of Silicon Laboratories Inc., a Delaware corporation, on
behalf of said corporation.

 

	
   

  	
  Wendy E. Byrum

  
	
   

  	
  Notary Public State of Texas

  
	
   

  	
   

  
	
   

  	
  My Commission expires: 

  	
  9-27-2008

  

 

S-1

 

 

 

 

	
   

  	
   

  	
  BA LEASING BSC, LLC, as Lessor

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Sonia T. Delen

  
	
   

  	
   

  	
   

  	
  Name:  Sonia T. Delen

  
	
   

  	
   

  	
   

  	
  Title:  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
  STATE OF
  CALIFORNIA

  	
  )

  	
   

  	
   

  
	
   

  	
  ) SS.:

  	
   

  	
   

  
	
  COUNTY OF SAN
  FRANCISCO

  	
  )

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

This instrument was acknowledged before me on the 12
day of March, 2008, by Sonia T. Delen, Senior Vice President of BA LEASING
BSC, LLC, a Delaware limited liability company, on behalf of said limited
liability company.

 

	
   

  	
  Eileen U. Harwell

  
	
   

  	
  Notary Public State of California

  
	
   

  	
  My Commission expires: 

  	
  6-28-2011

  

 

 

S-2

 

THIS COUNTERPART IS
THE ORIGINAL EXECUTED COUNTERPART.

 

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

 

WELLS FARGO BANK
NORTHWEST, NATIONAL 

ASSOCIATION, not in its individual capacity, 

but solely as Collateral Agent

 

	
   

  	
  By:

  	
  /s/ Scott Rosevear

  
	
   

  	
   

  	
  Name: 

  	
  Scott Rosevear

  
	
   

  	
   

  	
  Title: 

  	
  Vice President

  

 

 

EXHIBIT A

 

LEGAL
DESCRIPTION OF LAND

 

[TO BE ATTACHED.]

 

 

SCHEDULE
I

 

RELATED AGREEMENTS

 

                  1.       Master Agreement dated February 15,
2000 (“Master Agreement”), by and between the
City of Austin (“City”) and Computer Sciences Corporation (“Seller”).

 

                  2.       Ground Lease Agreement (Block 4), dated
as of April 10, 2000, between the City, as landlord, and Seller, as
tenant.

 

                  3.       Retail Sublease Agreement (Block 4),
dated as of April 10, 2000, between Seller, as sublessor, and the City, as
sublessee.

 

                  4.       Managed Growth Agreement, dated as of February 15,
2000, between the City and Seller.

 

                  5.       Agreement Concerning Project Area Design
Standards, dated as of February 15, 2000, between the City and Seller.

 

                  6.       Agreement dated February 22, 2000
between Seller and Hensel Phelps Construction Co., and

 

                  7.       Purchase Agreement with Joint Escrow
Instructions dated February 10, 2006 between Seller and Lessee and any and
all agreements assigned by Seller to Lessor pursuant thereto.

 

 All as the same
may be amended, modified, supplemented and/or assigned from time to time.

 

 

EXHIBIT C

TO LEASE

 

FORM OF
SUBORDINATION, NON-DISTURBANCE

AND ATTORNMENT AGREEMENT

 

1

 

EXHIBIT D

TO LEASE

 

CSC SUBLEASE

 

1

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