After recordation, this instrument should be returned to:
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Attention: Rex Palmer
MASTER LEASE AGREEMENT
Dated as of January 13, 2000
between
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
and
DOLLAR TREE DISTRIBUTION, INC. AND CERTAIN OTHER SUBSIDIARIES
OF DOLLAR TREE STORES, INC., as Lessees
-------------------------------------------
TABLE OF CONTENTS
(Lease Agreement)
Page
ARTICLE I. DEFINITIONS.................................................. 1
ARTICLE II. LEASE OF LEASED PROPERTY..................................... 1
2.1 Acceptance and Lease of Property............................. 1
2.2 Acceptance Procedure......................................... 2
ARTICLE III. RENT......................................................... 2
3.1 Basic Rent................................................... 2
3.2 Supplemental Rent............................................ 2
3.3 Method of Payment............................................ 3
3.4 Late Payment................................................. 3
3.5 Net Lease; No Setoff, Etc.................................... 3
3.6 Certain Taxes................................................ 4
3.7 Utility Charges.............................................. 5
ARTICLE IV. WAIVERS...................................................... 5
ARTICLE V. LIENS; EASEMENTS; PARTIAL CONVEYANCES........................ 6
ARTICLE VI. MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS..................... 7
6.1 Maintenance and Repair; Compliance With Law.................. 7
6.2 Alterations.................................................. 8
6.3 Title to Alterations......................................... 8
ARTICLE VII. USE.......................................................... 8
ARTICLE VIII. INSURANCE.................................................... 8
ARTICLE IX. ASSIGNMENT AND SUBLEASING................................... 10
ARTICLE X. LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE................... 10
10.1 Event of Loss............................................... 10
10.2 Event of Taking............................................. 11
10.3 Casualty.................................................... 11
10.4 Condemnation................................................ 12
10.5 Verification of Restoration and Rebuilding.................. 12
10.6 Application of Payments..................................... 12
10.7 Prosecution of Awards....................................... 13
(i)
10.8 Application of Certain Payments Not Relating
to an Event of Taking....................................... 13
10.9 Other Dispositions.......................................... 14
10.10 No Rent Abatement........................................... 14
ARTICLE XI. INTEREST CONVEYED TO LESSEES................................ 14
ARTICLE XII. EVENTS OF DEFAULT........................................... 15
ARTICLE XIII. ENFORCEMENT................................................. 17
13.1 Remedies.................................................... 17
13.2 Remedies Cumulative; No Waiver; Consents.................... 19
13.3 Purchase Upon an Event of Default........................... 19
ARTICLE XIV. SALE, RETURN OR PURCHASE OF LEASED PROPERTY;
RENEWAL .................................................... 20
14.1 Lessee's Option to Purchase................................. 20
14.2 Conveyance to Lessee........................................ 20
14.3 Acceleration of Purchase Obligation......................... 21
14.4 Determination of Purchase Price............................. 21
14.5 Purchase Procedure.......................................... 21
14.6 Option to Remarket.......................................... 22
14.7 Rejection of Sale........................................... 24
14.8 Return of Leased Property................................... 25
14.9 Renewal..................................................... 25
14.10 Environmental Report........................................ 25
ARTICLE XV. LESSEE'S EQUIPMENT.......................................... 26
ARTICLE XVI. RIGHT TO PERFORM FOR LESSEE................................. 26
ARTICLE XVII. MISCELLANEOUS............................................... 27
17.1 Reports..................................................... 27
17.2 Binding Effect; Successors and Assigns; Survival............ 27
17.3 Quiet Enjoyment............................................. 27
17.4 Notices..................................................... 27
17.5 Severability................................................ 28
17.6 Amendment; Complete Agreements.............................. 28
17.7 Construction................................................ 29
17.8 Headings.................................................... 29
17.9 Counterparts................................................ 29
17.10 GOVERNING LAW............................................... 29
17.11 Discharge of Lessee's Obligations by its
Subsidiaries or Affiliates.................................. 29
17.12 Liability of Lessor Limited................................. 29
17.13 Estoppel Certificates....................................... 30
(ii)
17.14 No Joint Venture............................................ 30
17.15 No Accord and Satisfaction.................................. 30
17.16 No Merger................................................... 30
17.17 Survival.................................................... 31
17.18 Chattel Paper............................................... 31
17.19 Time of Essence............................................. 31
17.20 Recordation of Lease........................................ 31
17.21 Investment of Security Funds................................ 31
17.22 Ground Leases............................................... 32
17.23 Land and Building........................................... 32
17.24 Joint and Several........................................... 32
17.25 Construction Land Interests................................. 32
17.26 IDB Documentation........................................... 33
APPENDICES AND EXHIBITS
APPENDIX A Defined Terms
EXHIBIT A Lease Supplement
(iii)
THIS MASTER LEASE AGREEMENT (as from time to time amended or
supplemented, this "Lease"), dated as of January 13, 2000, is among ATLANTIC
FINANCIAL GROUP, LTD., a Texas limited partnership (together with its successors
and assigns hereunder, the "Lessor"), as Lessor, and DOLLAR TREE DISTRIBUTION,
INC., a Virginia corporation, and certain other Subsidiaries of Dollar Tree
Stores, Inc. hereafter parties hereto (individually, with its successors and
permitted assigns hereunder, each a "Lessee" and collectively, the "Lessees"),
as Lessees.
PRELIMINARY STATEMENT
A. Lessor will purchase, or acquire a leasehold interest in, from one
or more third parties designated by the Construction Agent, on a Closing Date,
certain parcels of real property to be specified by the Construction Agent,
together with any improvements thereon.
B. Lessor desires to lease to each Lessee, and each Lessee desires to
lease from Lessor, certain of such properties as described on the Lease
Supplement(s) to which such Lessee is a party.
C. If applicable, the Construction Agent will construct, or cause to be
constructed, certain improvements on such parcels of real property which as
constructed will be the property of Lessor and will become part of such property
subject to the terms of this Lease.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, Lessor
and Lessees hereby agree as follows:
ARTICLE I.
DEFINITIONS
Terms used herein and not otherwise defined shall have the meanings
assigned thereto in Appendix A hereto for all purposes hereof.
ARTICLE II.
LEASE OF LEASED PROPERTY
Section 2.1 Acceptance and Lease of Property. On each Closing Date for
Land, Lessor, subject to the satisfaction or waiver of the conditions set forth
in Section 3 of the Master Agreement, hereby agrees to accept delivery on such
Closing Date of such Land pursuant to the terms of the Master Agreement,
together with any Building or other improvements thereon, and simultaneously to
lease to the related Lessee hereunder for the Lease Term, Lessor's interest in
such Land and in such Building or other improvements,
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together with any Building which thereafter may be constructed thereon pursuant
to the Construction Agency Agreement, and such related Lessee hereby agrees,
expressly for the direct benefit of Lessor, commencing on such Closing Date for
the Lease Term, to lease from Lessor Lessor's interest in such Land to be
delivered on such Closing Date, together with, in the case of Land, Lessor's
interest in any Building and other improvements thereon or which thereafter may
be constructed thereon pursuant to the Construction Agency Agreement.
Section 2.2 Acceptance Procedure. Lessor hereby authorizes one or more
employees of the related Lessee, to be designated by such Lessee, as the
authorized representative or representatives of Lessor to accept delivery on
behalf of Lessor of that Leased Property identified on the applicable Funding
Request. Each Lessee hereby agrees that such acceptance of delivery by such
authorized representative or representatives and the execution and delivery by
such Lessee on each Closing Date for property to be leased hereunder of a Lease
Supplement in substantially the form of Exhibit A hereto (appropriately
completed) shall, without further act, constitute the irrevocable acceptance by
such Lessee of that Leased Property which is the subject thereof for all
purposes of this Lease and the other Operative Documents on the terms set forth
therein and herein, and that such Leased Property, together with, in the case of
Land, any Building or other improvements thereon or to be constructed thereon
pursuant to the Construction Agency Agreement, shall be deemed to be included in
the leasehold estate of this Lease and shall be subject to the terms and
conditions of this Lease as of such Closing Date. The demise and lease of each
Building pursuant to this Section 2.2 shall include any additional right, title
or interest in such Building which may at any time be acquired by Lessor, the
intent being that all right, title and interest of Lessor in and to such
Building shall at all times be demised and leased to the related Lessee
hereunder.
ARTICLE III.
RENT
Section 3.1 Basic Rent. Beginning with and including the first Payment
Date occurring after the Initial Closing Date, each Lessee shall pay to the
Agent the Basic Rent for the Leased Properties subject to a Lease Supplement to
which such Lessee is a party, in installments, payable in arrears on each
Payment Date during the Lease Term, subject to Section 2.3(c) of the Master
Agreement.
Section 3.2 Supplemental Rent. Each Lessee shall pay to the Agent, or
to whomever shall be entitled thereto as expressly provided herein or in any
other Operative Document, any and all Supplemental Rent on the date the same
shall become due and payable and in the event of any failure on the part of such
Lessee to pay any Supplemental Rent, the Agent shall have all rights, powers and
remedies provided for herein or by law or in equity or otherwise in the case of
nonpayment of Basic Rent. All Supplemental Rent to be paid pursuant to this
Section 3.2 shall be payable in the type of funds and in the manner set forth in
Section 3.3.
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Section 3.3 Method of Payment. Basic Rent shall be paid to the Agent,
and Supplemental Rent (including amounts due under Article XIV hereof) shall be
paid to the Agent (or to such Person as may be entitled thereto) or, in each
case, to such Person as the Agent (or such other Person) shall specify in
writing to the related Lessee, and at such place as the Agent (or such other
Person) shall specify in writing to the related Lessee. Each payment of Rent
(including payments under Article XIV hereof) shall be made by the Lessees prior
to 12:00 p.m. (noon) Atlanta, Georgia time at the place of payment 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. The Agent agrees, at
a Lessee's request, to arrange for automated clearing house debits from such
Lessee's accounts for payments due hereunder.
Section 3.4 Late Payment. If any Basic Rent shall not be paid on the
date when due, the related Lessee shall pay to the Agent, as Supplemental Rent,
interest (to the maximum extent permitted by law) on such overdue amount from
and including the due date thereof to but excluding the Business Day of payment
thereof at the Overdue Rate.
Section 3.5 Net Lease; No Setoff, Etc. This Lease is a net lease and
notwithstanding any other provision of this Lease, each Lessee shall pay all
Basic Rent and Supplemental Rent, and all costs, charges, assessments and other
expenses foreseen or unforeseen, for which such Lessee or any Indemnitee is or
shall become liable by reason of such Lessee's or such Indemnitee's estate,
right, title or interest in the Leased Properties, or that are connected with or
arise out of the acquisition (except the initial costs of purchase by Lessor of
its interest in any Leased Property, which costs, subject to the terms of the
Master Agreement, shall be funded by the Funding Parties pursuant to the Master
Agreement), construction (except costs to be funded under the Construction
Agency Agreement), installation, possession, use, occupancy, maintenance,
ownership, leasing, repairs and rebuilding of, or addition to, the Leased
Properties or any portion thereof, and any other amounts payable hereunder and
under the other Operative Documents without counterclaim, setoff, deduction or
defense and without abatement, suspension, deferment, diminution or reduction,
and each Lessee's obligation to pay all such amounts throughout the Lease Term,
including the Construction Term, is absolute and unconditional. The obligations
and liabilities of each Lessee hereunder shall in no way be released, discharged
or otherwise affected for any reason, including without limitation: (a) any
defect in the condition, merchantability, design, quality or fitness for use of
any Leased Property or any part thereof, or the failure of any Leased Property
to comply with all Applicable Law, including any inability to occupy or use any
Leased Property by reason of such non-compliance; (b) any damage to, removal,
abandonment, salvage, loss, contamination of or Release from, scrapping or
destruction of or any requisition or taking of any Leased Property or any part
thereof; (c) any restriction, prevention or curtailment of or interference with
any use of any Leased Property or any part thereof including eviction; (d) any
defect in title to or rights to any Leased Property or any Lien on such title or
rights or on any Leased Property; (e) any change, waiver, extension,
3
indulgence or other action or omission or breach in respect of any obligation or
liability of or by Lessor, the Agent or any Lender; (f) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceedings relating to any Lessee, Lessor, any Lender, the Agent or
any other Person, or any action taken with respect to this Lease by any trustee
or receiver of any Lessee, Lessor, any Lender, the Agent, any Ground Lessor or
any other Person, or by any court, in any such proceeding; (g) any claim that
any Lessee has or might have against any Person, including without limitation,
Lessor, any vendor, manufacturer, contractor of or for any Leased Property or
any part thereof, the Agent, any Ground Lessor, any Governmental Authority, or
any Lender; (h) any failure on the part of Lessor to perform or comply with any
of the terms of this Lease, any other Operative Document or of any other
agreement; (i) any invalidity or unenforceability or illegality or disaffirmance
of this Lease against or by any Lessee or any provision hereof or any of the
other Operative Documents or any provision of any thereof whether or not related
to the Transaction; (j) the impossibility or illegality of performance by any
Lessee, Lessor or both; (k) any action by any court, administrative agency or
other Governmental Authority; (l) any restriction, prevention or curtailment of
or interference with the Construction or any use of any Leased Property or any
part thereof; or (m) any other occurrence whatsoever, whether similar or
dissimilar to the foregoing, whether or not any Lessee shall have notice or
knowledge of any of the foregoing. Except as specifically set forth in Articles
XIV or X of this Lease, this Lease shall be noncancellable by each Lessee in any
circumstance whatsoever and each Lessee, to the extent permitted by Applicable
Law, waives all rights now or hereafter conferred by statute or otherwise to
quit, terminate or surrender this Lease, or to any diminution, abatement or
reduction of Rent payable by such Lessee hereunder. Each payment of Rent made by
a Lessee hereunder shall be final and such Lessee shall not seek or have any
right to recover all or any part of such payment from Lessor, the Agent, any
Lender or any party to any agreements related thereto for any reason whatsoever.
Each Lessee assumes the sole responsibility for the condition, use, operation,
maintenance, and management of the Leased Properties leased by it and Lessor
shall have no responsibility in respect thereof and shall have no liability for
damage to the property of either any Lessee or any subtenant of any Lessee on
any account or for any reason whatsoever, other than solely by reason of
Lessor's willful misconduct or gross negligence.
Section 3.6 Certain Taxes. Without limiting the generality of Section
3.5, each Lessee agrees to pay when due all real estate taxes, personal property
taxes, gross sales taxes, including any sales or lease tax imposed upon the
rental payments hereunder or under a sublease, occupational license taxes, water
charges, sewer charges, assessments of any nature and all other governmental
impositions and charges of every kind and nature whatsoever (the "tax(es)"),
when the same shall be due and payable without penalty or interest; provided,
however, that this Section shall not apply to any of the taxes covered by the
exclusion described in Section 7.4(b) of the Master Agreement. It is the
intention of the parties hereto that, insofar as the same may lawfully be done,
Lessor shall be, except as specifically provided for herein, free from all
expenses in any way related to the Leased Properties and the use and occupancy
thereof. Any tax relating to a fiscal period of any taxing authority
4
falling partially within and partially outside the Lease Term, shall be
apportioned and adjusted between Lessor and the related Lessee. Each Lessee
covenants to furnish Lessor and the Agent, upon the Agent's written request,
within forty-five (45) days after the last date when any tax must be paid by
such Lessee as provided in this Section 3.6, official receipts of the
appropriate taxing, authority or other proof satisfactory to Lessor, evidencing
the payment thereof.
So long as no Event of Default has occurred and is continuing, the
related Lessee may defer payment of a tax so long as the validity or the amount
thereof is contested by such Lessee with diligence and in good faith; provided,
however, that such Lessee shall pay the tax in sufficient time to prevent
delivery of a tax deed. Such contest shall be at the related Lessee's sole cost
and expense. Each Lessee covenants to indemnify and save harmless Lessor, which
indemnification shall survive the termination of this Lease, the Agent and each
Lender from any actual and reasonable costs or expenses incurred by Lessor, the
Agent or any Lender as a result of such contest.
Section 3.7 Utility Charges. Each Lessee agrees to pay or cause to be
paid as and when the same are due and payable all charges for gas, water, sewer,
electricity, lights, heat, power, telephone or other communication service and
all other utility services used, rendered or supplied to, upon or in connection
with the Leased Properties leased by it.
ARTICLE IV.
WAIVERS
During the Lease Term, Lessor's interest in the Leased Properties,
including the Equipment, the Building(s) (whether or not completed) and the
Land, is demised and let by Lessor "AS IS" subject to (a) the rights of any
parties in possession thereof, (b) the state of the title thereto existing at
the time Lessor acquired its interest in the Leased Properties, (c) any state of
facts which an accurate survey or physical inspection might show (including the
survey delivered on the related Closing Date), (d) all Applicable Law, and (e)
any violations of Applicable Law which may exist upon or subsequent to the
commencement of the Lease Term. EACH LESSEE ACKNOWLEDGES THAT, ALTHOUGH LESSOR
WILL OWN AND HOLD TITLE TO THE LEASED PROPERTIES, LESSOR IS NOT A MANUFACTURER
OF, OR DEALER IN ANY LEASED PROPERTY, AND IS NOT RESPONSIBLE FOR THE DESIGN,
DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE BUILDING(S) OR ANY ALTERATIONS.
NEITHER LESSOR, THE AGENT NOR ANY LENDER HAS MADE OR SHALL BE DEEMED TO HAVE
MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, MERCHANTABILITY, TITLE,
HABITABILITY, CONDITION, DESIGN, OPERATION, OR FITNESS FOR USE OF THE LEASED
PROPERTIES (OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION OR WARRANTY
WHATSOEVER, EXPRESS OR
5
IMPLIED, WITH RESPECT TO THE LEASED PROPERTIES (OR ANY PART THEREOF), ALL SUCH
WARRANTIES BEING HEREBY DISCLAIMED, AND NEITHER LESSOR, THE AGENT NOR ANY LENDER
SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE
OF ANY LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAW,
except that Lessor hereby represents and warrants that each Leased Property is
and shall be free of Lessor Liens. As between Lessor and the Lessees, each
related Lessee has been afforded full opportunity to inspect each Leased
Property, is satisfied with the results of its inspections of such Leased
Property and is entering into this Lease solely on the basis of the results of
its own inspections and all risks incident to the matters discussed in the two
preceding sentences, as between Lessor, the Agent or the Lenders on the one
hand, and the Lessees, on the other, are to be borne by the Lessees. The
provisions of this Article IV 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 Lessor,
the Agent or the Lenders, express or implied, with respect to the Leased
Properties, that may arise pursuant to any law now or hereafter in effect, or
otherwise.
ARTICLE V.
LIENS; EASEMENTS; PARTIAL CONVEYANCES
No Lessee shall directly or indirectly create, incur or assume, any
Lien on or with respect to any Leased Property, the title thereto, or any
interest therein, including any Liens which arise out of the possession, use,
occupancy, construction, repair or rebuilding of any Leased Property or by
reason of labor or materials furnished or claimed to have been furnished to a
Lessee, or any of its contractors or agents or Alterations constructed by a
Lessee, except, in all cases, Permitted Liens.
Notwithstanding the foregoing paragraph, at the request of a Lessee,
Lessor shall, from time to time during the Lease Term and upon reasonable
advance written notice from such Lessee, and receipt of the materials specified
in the next succeeding sentence, consent to and join in any (i) grant of
easements, licenses, rights of way and other rights in the nature of easements,
including, without limitation, utility easements to facilitate Lessees' use,
development and construction of the Leased Properties, (ii) release or
termination of easements, licenses, rights of way or other rights in the nature
of easements which are for the benefit of the Land or the Building(s) or any
portion thereof, (iii) dedication or transfer of portions of the Land, not
improved with a Building, for road, highway or other public purposes, (iv)
execution of agreements for ingress and egress and amendments to any covenants
and restrictions affecting the Land or the Building(s) or any portion thereof
and (v) request to any Governmental Authority for platting or subdivision or
replatting or resubdivision approval with respect to the Land or any portion
thereof or any parcel of land of which the Land or any portion thereof forms a
part or a request for rezoning or any
6
variance from zoning or other governmental requirements. Lessor's obligations
pursuant to the preceding sentence shall be subject to the requirements that:
(a) any such action shall be at the sole cost and expense of
the requesting Lessee and such Lessee shall pay all actual and reasonable
out-of-pocket costs of Lessor, the Agent and any Lender in connection therewith
(including, without limitation, the reasonable fees of attorneys, architects,
engineers, planners, appraisers and other professionals reasonably retained by
Lessor, the Agent or any Lender in connection with any such action),
(b) the requesting Lessee shall have delivered to Lessor and
Agent a certificate of a Responsible Officer of such Lessee stating that
(i) such action will not cause any Leased Property,
the Land or any Building or any portion thereof to fail to comply in
any material respect with the provisions of this Lease or any other
Operative Documents, or in any material respect with Applicable Law;
and
(ii) such action will not materially reduce the Fair
Market Sales Value, utility or useful life of any Leased Property, the
Land or any Building nor Lessor's interest therein; and
(c) in the case of any release or conveyance, if Lessor, the
Agent or any Lender so reasonably requests, the requesting Lessee will cause to
be issued and delivered to Lessor and the Agent by the Title Insurance Company
an endorsement to the Title Policy pursuant to which the Title Insurance Company
agrees that its liability for the payment of any loss or damage under the terms
and provisions of the Title Policy will not be affected by reason of the fact
that a portion of the real property referred to in Schedule A of the Title
Policy has been released or conveyed by Lessor.
ARTICLE VI.
MAINTENANCE AND REPAIR;
ALTERATIONS, MODIFICATIONS AND ADDITIONS
Section 6.1 Maintenance and Repair; Compliance With Law. Each Lessee,
at its own expense, shall at all times (a) maintain each Leased Property leased
by it in good repair and condition (subject to ordinary wear and tear), in
accordance with prudent industry standards and, in any event, in no less a
manner as other similar property owned or leased by such Lessee or its
Affiliates, (b) make all Alterations in accordance with, and maintain (whether
or not such maintenance requires structural modifications or Alterations) and
operate and otherwise keep each Leased Property in compliance in all material
respects with, all Applicable Laws and insurance requirements, and (c) make all
material repairs, replacements and renewals of each Leased Property or any part
thereof which may be required to keep such
7
Leased Property in the condition required by the preceding clauses (a) and (b).
Each Lessee shall perform the foregoing maintenance obligations regardless of
whether any Leased Property is occupied or unoccupied. Each Lessee waives any
right that it may now have or hereafter acquire to (i) require Lessor, the Agent
or any Lender to maintain, repair, replace, alter, remove or rebuild all or any
part of any Leased Property or (ii) make repairs at the expense of Lessor, the
Agent or any Lender pursuant to any Applicable Law or other agreements or
otherwise. NEITHER LESSOR, THE AGENT NOR ANY LENDER SHALL BE LIABLE TO ANY
LESSEE OR TO ANY CONTRACTORS, SUBCONTRACTORS, LABORERS, MATERIALMEN, SUPPLIERS
OR VENDORS FOR SERVICES PERFORMED OR MATERIAL PROVIDED ON OR IN CONNECTION WITH
ANY LEASED PROPERTY OR ANY PART THEREOF. Neither Lessor, the Agent nor any
Lender shall be required to maintain, alter, repair, rebuild or replace any
Leased Property in any way.
Section 6.2 Alterations. Each Lessee may, without the consent of
Lessor, at such Lessee's own cost and expense, make Alterations which do not
diminish the value, utility or useful life of any Leased Property.
Section 6.3 Title to Alterations. Title to all Alterations shall
without further act vest in Lessor (subject to each Lessee's right to remove
trade fixtures, personal property and equipment which do not constitute
Alterations and which were not acquired with funds advanced by Lessor or any
Lender) and shall be deemed to constitute a part of the Leased Properties and be
subject to this Lease.
ARTICLE VII.
USE
Each Lessee may use each Leased Property leased by it or any part
thereof for any lawful purpose, and in a manner consistent with the standards
applicable to properties of a similar nature in the geographic area in which
such Leased Property is located, provided that such use does not materially
adversely affect the Fair Market Sales Value, utility, remaining useful life or
residual value of such Leased Property, and does not materially violate or
conflict with, or constitute or result in a material default under, any
Applicable Law or any insurance policy required hereunder. In the event that any
use of any of the Leased Property changes the character or original intended use
of such Leased Property and the Lessees do not purchase the Leased Properties at
the end of the Lease Term, the related Lessee, upon request of Lessor, shall
restore such Leased Property to its general character and intended use on the
Closing Date or Completion Date therefor, ordinary wear and tear excepted. No
Lessee shall commit or permit any waste of any Leased Property or any material
part thereof.
8
ARTICLE VIII.
INSURANCE
(a) At any time during which any part of any Building or any
Alteration is under construction and as to any part of any Building or any
Alteration under construction, the related Lessee shall maintain, or cause to be
maintained, at its sole cost and expense, as a part of its blanket policies or
otherwise, "all risks" non-reporting completed value form of builder's risk
insurance.
(b) During the Lease Term, each Lessee shall maintain, at its
sole cost and expense, as a part of its blanket policies or otherwise, insurance
against loss or damage to any Building or any item of Equipment by fire and
other risks, including comprehensive boiler and machinery coverage, on terms and
in amounts no less favorable than insurance covering other similar properties or
equipment owned or leased by a Lessee, but in no event less than the replacement
cost of such Building or item of Equipment, as the case may be, from time to
time.
(c) During the Lease Term, each Lessee shall maintain, at its
sole cost and expense, commercial general liability insurance with respect to
such Lessee's use, operation and occupancy of the Leased Properties. Such
insurance shall be on terms and in amounts that are no less favorable than
insurance maintained by a Lessee or its Affiliates with respect to similar
properties or equipment that it owns or leases, but in no event less than
$1,000,000 general liability, plus $2,000,000 liability umbrella coverage, per
occurrence. Such insurance policies shall also provide that each Lessee's
insurance shall be considered primary insurance. Nothing in this Article VIII
shall prohibit Lessor, the Agent or any Lender from carrying at its own expense
other insurance on or with respect to the Leased Properties, provided that any
insurance carried by Lessor, the Agent or any Lender shall not prevent any
Lessee from carrying the insurance required hereby.
(d) Each policy of insurance maintained by a Lessee pursuant
to clauses (a) and (b) of this Article VIII shall provide that all insurance
proceeds in respect of any loss or occurrence shall be adjusted by such Lessee,
except if, and for so long as an Event of Default exists, all losses shall be
adjusted solely by, and all insurance proceeds shall be paid solely to, the
Agent (or Lessor if the Loans have been fully paid) for application pursuant to
this Lease.
(e) On the Closing Date for each parcel of Land and on each
anniversary of the related policy date each Lessee shall furnish Lessor with
certificates showing the insurance required under this Article VIII to be in
effect and naming Lessor, the Agent and the Lenders as additional insureds. Such
certificates shall include a provision for thirty (30) days' advance written
notice by the insurer to Lessor and the Agent in the event of cancellation or
expiration or nonpayment of premium with respect to such insurance, and shall
include a customary breach of warranty clause. Each Lessee shall provide
evidence to Lessor and the Agent that
9
each insurance policy required by this Article VIII has been renewed or replaced
prior to the scheduled expiration date therefor.
(f) Each policy of insurance maintained by a Lessee pursuant
to this Article VIII shall provide that in respect of the interests of Lessor,
the Agent and the Lenders, such policies shall not be invalidated by any fraud,
action, inaction or misrepresentation of any Lessee or any other Person acting
on behalf of any Lessee. Each of each Lessee, Lessor, the Agent and the Lenders
agree to waive their rights of subrogation against the others to the extent of
the losses paid under insurance policies.
(g) All insurance policies carried in accordance with this
Article VIII shall be maintained with insurers rated at least A by A.M. Best &
Company, and in all cases the insurer shall be qualified to insure risks in the
State where each Leased Property is located.
ARTICLE IX.
ASSIGNMENT AND SUBLEASING
No Lessee may assign any of its right, title or interest in, to or
under this Lease, except as set forth in the following sentence. Each Lessee may
sublease all or any portion of any Leased Property, provided that (a) all
obligations of such Lessee shall continue in full effect as obligations of a
principal and not of a guarantor or surety, as though no sublease had been made;
(b) such assignment or sublease shall be expressly subject and subordinate to
this Lease, the Loan Agreement and the other Operative Documents; and (c) each
such sublease shall terminate on or before the Lease Termination Date. Each
Lessee shall give the Agent and Lessor prompt written notice of any such
sublease.
Except pursuant to an Operative Document, this Lease shall not be
mortgaged or pledged by any Lessee, nor shall any Lessee mortgage or pledge any
interest in any Leased Property or any portion thereof. Any such mortgage or
pledge shall be void.
ARTICLE X.
LOSS, DESTRUCTION, CONDEMNATION OR DAMAGE
Section 10.1 Event of Loss. Any event (i) which would otherwise
constitute a Casualty during the Base Term, and (ii) which, in the good-faith
judgment of the related Lessee, renders repair and restoration of a Leased
Property impossible or impractical, or requires repairs to a Leased Property
that would cost in excess of 50% of the original cost of such Leased Property,
and (iii) as to which such Lessee, within sixty (60) days after the occurrence
of such event, delivers to Lessor an Officer's Certificate notifying Lessor of
such event and of such judgment, shall constitute an "Event of Loss". In the
case of any other event which constitutes a Casualty, the related Lessee shall
restore such Leased Property
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pursuant to Section 10.3. If an Event of Loss other than an Event of Taking
shall occur, the related Lessee shall pay to Lessor on the later of (i) the
thirtieth day and (ii) the next Payment Date following delivery of the Officer's
Certificate pursuant to clause (iii) above an amount equal to the related Leased
Property Balance. Upon Lessor's receipt of such Leased Property Balance on such
date, Lessor shall cause Lessor's interest in such Leased Property to be
conveyed to the related Lessee in accordance with and subject to the provisions
of Section 14.5 hereof; upon completion of such purchase, but not prior thereto,
this Lease with respect to such Leased Property and all obligations hereunder
with respect to such Leased Property shall terminate, except with respect to
obligations and liabilities hereunder, actual or contingent, that have arisen or
relate to events occurring on or prior to such date of purchase, or which are
expressly stated herein to survive termination of this Lease.
Upon the consummation of the purchase of any Leased Property pursuant
to this Section 10.1, any proceeds derived from insurance required to be
maintained by the related Lessee pursuant to this Lease for any Leased Property
remaining after payment of such purchase price shall be paid over to, or
retained by, such Lessee or as it may direct, and Lessor shall assign to such
Lessee, without warranty, all of Lessor's rights to and interest in such
insurance required to be maintained by such Lessee pursuant to this Lease.
Section 10.2 Event of Taking. Any event (i) which constitutes a
Condemnation of all of, or substantially all of, a Leased Property, or (ii) (A)
which would otherwise constitute a Condemnation, (B) which, in the good-faith
judgment of the related Lessee, renders restoration and rebuilding of a Leased
Property impossible or impractical, or requires repairs to a Leased Property
that would cost in excess of 50% of the original cost of such Leased Property,
and (C) as to which such Lessee, within sixty (60) days after the occurrence of
such event, delivers to Lessor an Officer's Certificate notifying Lessor of such
event and of such judgment, shall constitute an "Event of Taking". In the case
of any other event which constitutes a Condemnation, the related Lessee shall
restore and rebuild such Leased Property pursuant to Section 10.4. If an Event
of Taking shall occur, the related Lessee shall pay to Lessor (1) on the later
of (A) the thirtieth day and (B) the next Payment Date following the occurrence
of such Event of Taking, in the case of an Event of Taking described in clause
(i) above, or (2) on the later of (A) the thirtieth day and (B) the next Payment
Date following delivery of the Officer's Certificate pursuant to clause (ii)
above, in the case of an Event of Taking described in clause (ii) above, an
amount equal to the related Leased Property Balance. Upon Lessor's receipt of
such Leased Property Balance on such date, Lessor shall cause Lessor's interest
in such Leased Property to be conveyed to the related Lessee in accordance with
and subject to the provisions of Section 14.5 hereof (provided that such
conveyance shall be subject to all rights of the condemning authority); upon
completion of such purchase, but not prior thereto, this Lease with respect to
such Leased Property and all obligations hereunder with respect to such Leased
Property shall terminate, except with respect to obligations and liabilities
hereunder, actual or contingent, that have arisen or relate to events occurring
on or prior to such date of purchase, or which are expressly stated herein to
survive termination of this Lease.
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Upon the consummation of the purchase of such Leased Property pursuant
to this Section 10.2, all Awards received by Lessor, after deducting any
reasonable out-of-pocket costs incurred by Lessor in collecting such Awards,
received or payable on account of an Event of Taking with respect to such Leased
Property during the related Lease Term shall be promptly paid to the related
Lessee, and all rights of Lessor in Awards not then received shall be assigned
to Lessee by Lessor.
Section 10.3 Casualty. If a Casualty shall occur which is not an Event
of Loss, the related Lessee shall rebuild and restore the affected Leased
Property, will complete the same prior to the Lease Termination Date, and will
cause the condition set forth in Section 3.5 (c) of the Master Agreement to be
fulfilled with respect to such restoration and rebuilding prior to the Lease
Termination Date, regardless of whether insurance proceeds received as a result
of such Casualty are sufficient for such purpose.
Section 10.4 Condemnation. If a Condemnation shall occur which is not
an Event of Taking, the related Lessee shall rebuild and restore the affected
Leased Property, will complete the same prior to the Lease Termination Date, and
will cause the condition set forth in Section 3.5 (c) of the Master Agreement to
be fulfilled with respect to such restoration and rebuilding prior to the Lease
Termination Date.
Section 10.5 Verification of Restoration and Rebuilding. In the event
of Casualty or Condemnation that involves, or is reasonably expected to involve,
repair or rebuilding costs in excess of $1,000,000, to verify the related
Lessee's compliance with the foregoing Section 10.3 or 10.4, as appropriate,
Lessor, the Agent, the Lenders and their respective authorized representatives
may, upon five (5) Business Days' notice to such Lessee, make a reasonable
number of inspections of the affected Leased Property with respect to (i) the
extent of the Casualty or Condemnation and (ii) the restoration and rebuilding
of the related Building and the Land. All actual and reasonable out-of-pocket
costs of such inspections incurred by Lessor, the Agent or any Lender will be
paid by the related Lessee promptly after written request. No such inspection
shall unreasonably interfere with the related Lessee's operations or the
operations of any other occupant of such Leased Property. None of the inspecting
parties shall have any duty to make any such inspection or inquiry and none of
the inspecting parties shall incur any liability or obligation by reason of
making or not making any such inspection or inquiry.
Section 10.6 Application of Payments. All proceeds (except for payments
under insurance policies maintained other than pursuant to Article VIII of this
Lease) received at any time by Lessor, any Lessee or the Agent from any
Governmental Authority or other Person with respect to any Condemnation or
Casualty to any Leased Property or any part thereof or with respect to an Event
of Loss or an Event of Taking, plus the amount of any payment that would have
been due from an insurer but for a Lessee's self-insurance or deductibles ("Loss
Proceeds"), shall (except to the extent Section 10.9 applies) be applied as
follows:
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(a) In the event the related Lessee purchases such Leased
Property pursuant to Section 10.1 or Section 10.2, such Loss Proceeds shall be
applied as set forth in Section 10.1 or Section 10.2, as the case may be;
(b) In the event of a Casualty at such time when no Event of
Default has occurred and is continuing and the related Lessee is obligated to
repair and rebuild such Leased Property pursuant to Section 10.3, such Lessee
may, in good faith and subsequent to the date of such Casualty, certify to
Lessor and to the applicable insurer that no Event of Default has occurred and
is continuing, in which event the applicable insurer shall pay the Loss Proceeds
to such Lessee;
(c) In the event of a Condemnation at such time when no Event
of Default has occurred and is continuing and the related Lessee is obligated to
repair and rebuild such Leased Property pursuant to Section 10.4, such Lessee
may, in good faith and subsequent to the date of such Condemnation, certify to
Lessor and the Agent that no Event of Default has occurred and is continuing, in
which event the applicable Award shall be paid over to such Lessee; and
(d)As provided in Section 10.8, if such section is applicable.
During any period of repair or rebuilding pursuant to this Article X,
this Lease will remain in full force and effect and Basic Rent shall continue to
accrue and be payable without abatement or reduction. Each Lessee shall maintain
records setting forth information relating to the receipt and application of
payments in accordance with this Section 10.6. Such records shall be kept on
file by each Lessee at its offices and shall be made available to Lessor, the
Lenders and the Agent upon request.
Section 10.7 Prosecution of Awards.
(a) If any Condemnation shall occur, the party receiving the
notice of such Condemnation shall give to the other party and the Agent
promptly, but in any event within thirty (30) days after the occurrence thereof,
written notice of such occurrence and the date thereof, generally describing the
nature and extent of such Condemnation. With respect to any Event of Taking or
any Condemnation, the related Lessee shall control the negotiations with the
relevant Governmental Authority as to any proceeding in respect of which Awards
are required, under Section 10.6, to be assigned or released to such Lessee,
unless an Event of Default shall have occurred and be continuing, in which case
(i) the Agent (or Lessor if the Loans have been fully paid) shall control such
negotiations; and (ii) such Lessee hereby irrevocably assigns, transfers and
sets over to Lessor all rights of such Lessee to any Award on account of any
Event of Taking or any Condemnation and, if there will not be separate Awards to
Lessor and such Lessee on account of such Event of Taking or Condemnation,
irrevocably authorizes and empowers the Agent (or Lessor if the Loans have been
fully paid) during the continuance of an Event of Default, with full power of
substitution, in the name of such Lessee or otherwise (but without limiting the
obligations of such Lessee under this Article X), to file and prosecute what
would otherwise be such
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Lessee's claim for any such Award and to collect, receipt for and retain the
same. In any event Lessor and the Agent may participate in such negotiations,
and no settlement will be made without the prior consent of the Agent (or Lessor
if the Loans have been fully paid), not to be unreasonably withheld.
(b) Notwithstanding the foregoing, each Lessee may prosecute,
and Lessor shall have no interest in, any claim with respect to such Lessee's
personal property and equipment not financed by or otherwise property of Lessor,
business interruption or similar award and such Lessee's relocation expenses.
Section 10.8 Application of Certain Payments Not Relating to an Event
of Taking. In case of a requisition for temporary use of all or a portion of any
Leased Property which is not an Event of Taking, this Lease shall remain in full
force and effect with respect to such Leased Property, without any abatement or
reduction of Basic Rent, and the Awards for such Leased Property shall, unless
an Event of Default has occurred and is continuing, be paid to the related
Lessee.
Section 10.9 Other Dispositions. Notwithstanding the foregoing
provisions of this Article X, so long as an Event of Default shall have occurred
and be continuing, any amount that would otherwise be payable to or for the
account of, or that would otherwise be retained by, Lessee pursuant to this
Article X shall be paid to the Agent (or Lessor if the Loans have been fully
paid) as security for the obligations of the Lessees under this Lease and, at
such time thereafter as no Event of Default shall be continuing, such amount
shall be paid promptly to the related Lessee to the extent not previously
applied by Lessor or the Agent in accordance with the terms of this Lease or the
other Operative Documents.
Section 10.10 No Rent Abatement. Rent shall not abate hereunder by
reason of any Casualty, any Event of Loss, any Event of Taking or any
Condemnation of any Leased Property, and each Lessee shall continue to perform
and fulfill all of such Lessee's obligations, covenants and agreements hereunder
notwithstanding such Casualty, Event of Loss, Event of Taking or Condemnation
until the Lease Termination Date.
ARTICLE XI.
INTEREST CONVEYED TO LESSEES
Each Lessee and Lessor intend that this Lease be treated, for
accounting purposes, as an operating lease. For purposes of federal and state
income taxes, and bankruptcy law, each Lessee and Lessor intend that the
transaction represented by this Lease be treated as a financing transaction; for
such purposes, it is the intention of the parties hereto (i) that this Lease be
treated as a mortgage or deed of trust (whichever is applicable in the
jurisdictions in which the Leased Properties are located) and security
agreement, encumbering the Leased Properties, and that each Lessee, as grantor,
hereby grants to Lessor, as mortgagee or
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beneficiary and secured party, or any successor thereto, a first and paramount
Lien on each Leased Property in which such Lessee has an interest, (ii) that
Lessor shall have, as a result of such determination, all of the rights, powers
and remedies of a mortgagee, deed of trust beneficiary or secured party
available under Applicable Law to take possession of and sell (whether by
foreclosure or otherwise) any Leased Property, (iii) that the effective date of
such mortgage, security deed or deed of trust shall be the effective date of
this Lease, or the related Lease Supplement, if later, (iv) that the recording
of this Lease or a Lease Supplement shall be deemed to be the recording of such
mortgage, security deed or deed of trust, (v) that the obligations secured by
such mortgage, security deed or deed of trust shall include the Funded Amounts
and all Basic Rent and Supplemental Rent hereunder and all other obligations of
and amounts due from each Lessee hereunder and under the Operative Documents and
(vi) that the related Lessee will be treated as the owner of the Leased
Properties leased by such Lessee for tax purposes.
ARTICLE XII.
EVENTS OF DEFAULT
The following events shall constitute Events of Default (whether any
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):
(a) any Lessee shall fail to make any payment of Basic Rent within
three (3) Business Days after written notice of such failure from Lessor or the
Agent;
(b) any Lessee shall fail to make any payment of Rent (other than Basic
Rent and other than as set forth in clause (c)) or any other amount payable
hereunder or under any of the other Operative Documents (other than Basic Rent
and other than as set forth in clause (c)), and such failure shall continue for
a period of ten Business Days after written notice thereof from Lessor or the
Agent is received by DTD;
(c) any Lessee shall fail to pay the Funded Amount or Lease Balance
when due pursuant to Section 10.1, 10.2, 14.1 or 14.2, or any Lessee shall fail
to pay the Recourse Deficiency Amount when required pursuant to Article XIV or
the Construction Agent shall fail to make any payment when due under the
Construction Agency Agreement;
(d) any Lessee shall fail to maintain insurance as required by Article
VIII hereof, and such failure shall continue until the earlier of (i) fifteen
(15) days after written notice thereof from Lessor and (ii) the day immediately
preceding the date on which any applicable insurance coverage would otherwise
lapse or terminate;
15
(e) any Obligor shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received or in
respect of any Capitalized Leases in excess of $500,000 in the aggregate, or
fail to observe or perform any term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases in excess of $500,000 in the
aggregate for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(f) any Obligor shall cease to be Solvent, or shall make an assignment
for the benefit of creditors, or admit in writing its inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of any Obligor or of any substantial part of the assets of any Obligor
or shall commence any case or other proceeding relating to any Obligor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of the
fore going, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against any Obligor and such Obligor
shall indicate its approval thereof, consent thereto or acquiescence therein; or
the filing of any case or other proceeding against any obligor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect and such case or proceeding is not discharged or dismissed within
sixty (60) days of its commencement; a decree or order is entered appointing any
such trustee, custodian, liquidator or receiver or adjudicating any Obligor
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of any
Obligor, in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
(g) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any uninsured
final judgment against any Obligor that, with other outstanding uninsured final
judgments, undischarged, against the Obligors exceeds $2,000,000.00 in the
aggregate;
(h) if any of the Operating Documents shall be cancelled, terminated,
revoked or rescinded or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Operating Documents shall be
commenced by or on behalf of any Obligor, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Operating Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(i) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Required Funding Parties shall have determined
in their reasonable
16
discretion that such event reasonably could be expected to result in liability
of any Obligor to the PBGC on such Guaranteed Pension Plan in an aggregate
amount exceeding $500,000.00 and (i) such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Guaranteed
Pension Plan by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such Guaranteed Pension Plan; or (ii)
a trustee shall have been appointed by the United States District Court to
administer such Plan; or (iii) the PBGC shall have instituted proceedings to
terminate such Guaranteed Pension Plan;
(j) any representation or warranty by DTS or any Lessee in any
Operative Document or in any certificate or document delivered to Lessor, the
Agent or any Lender pursuant to any Operative Document shall have been incorrect
in any material respect when made;
(k) any Lessee or DTS shall fail in any material respect to timely,
perform or observe any covenant or material agreement (not included in clause
(a) through (j) of this Article XII) to be performed or observed by it hereunder
or under any other Operative Document and such failure shall continue for a
period of thirty (30) days (or 10 Business Days in the case of financial
covenants) after such Lessee's or DTD's receipt of written notice thereof from
Lessor, the Agent or any Lender or such Lessee or DTD shall have knowledge of
such failure; provided, however, that if such failure is capable of cure, but is
not capable of cure within such thirty day period, so long as such Lessee or DTD
shall be diligently pursuing such cure, such failure shall not constitute an
Event of Default unless it shall continue for a period of ninety (90) days after
such Lessee's or DTD's receipt of notice or knowledge thereof.
ARTICLE XIII.
ENFORCEMENT
Section 13.1 Remedies. Upon the occurrence and during the continuance
of any Event of Default, Lessor may do one or more of the following as Lessor in
its sole discretion shall determine, without limiting any other right or remedy
Lessor may have on account of such Event of Default (including, without
limitation, the obligation of the Lessees to purchase the Leased Properties as
set forth in Section 14.3):
(a) Lessor may, by notice to DTD, rescind or terminate this
Lease as of the date specified in such notice; however, (A) no reletting,
reentry or taking of possession of any Leased Property by Lessor will be
construed as an election on Lessor's part to terminate this Lease unless a
written notice of such intention is given to DTD, (B) notwithstanding any
reletting, reentry or taking of possession, Lessor may at any time thereafter
elect to terminate this Lease for a continuing Event of Default, and (C) no act
or thing done by Lessor or any
17
of its agents, representatives or employees and no agreement accepting a
surrender of any Leased Property shall be valid unless the same be made in
writing and executed by Lessor;
(b) Lessor may (i) demand that the Lessees, and the Lessees
shall upon the written demand of Lessor, return the Leased Properties promptly
to Lessor in the manner and condition required by, and otherwise in accordance
with all of the provisions of, Articles VI and XIV hereof as if the Leased
Properties were being returned at the end of the Lease Term, and Lessor shall
not be liable for the reimbursement of any Lessee for any costs and expenses
incurred by such Lessee in connection therewith and (ii) without prejudice to
any other remedy which Lessor may have for possession of the Leased Properties,
and to the extent and in the manner permitted by Applicable Law, enter upon any
Leased Property and take immediate possession of (to the exclusion of the
related Lessee) any Leased Property or any part thereof and expel or remove the
related Lessee and any other person who may be occupying such Leased Property,
by summary proceedings or otherwise, all without liability to any Lessee for or
by reason of such entry or taking of possession, whether for the restoration of
damage to property caused by such taking or otherwise and, in addition to
Lessor's other damages, the Lessees shall be responsible for the actual and
reasonable costs and expenses of reletting, including brokers' fees and the
reasonable out-of-pocket costs of any alterations or repairs made by Lessor;
(c) Lessor may (i) sell all or any part of any Leased Property
at public or private sale, as Lessor may determine, free and clear of any rights
of any Lessee and without any duty to account to any Lessee with respect to such
action or inaction or any proceeds with respect thereto (except to the extent
required by Applicable Law or clause (ii) below if Lessor shall elect to
exercise its rights thereunder) in which event the related Lessee's obligation
to pay Basic Rent for such Leased Property hereunder for periods commencing
after the date of such sale shall be terminated or proportionately reduced, as
the case may be; and (ii) if Lessor shall so elect, demand that the related
Lessee pay to Lessor, and the related Lessee shall pay to Lessor, on the date of
such sale, as liquidated damages for loss of a bargain and not as a penalty (the
parties agreeing that Lessor's actual damages would be difficult to predict, but
the aforementioned liquidated damages represent a reasonable approximation of
such amount) (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 sum of (A) all Rent due and unpaid
to and including such Payment Date and (B) the Funded Amounts with respect to
such Leased Property, computed as of such date, over (2) the net proceeds of
such sale (that is, after deducting all out-of-pocket costs and expenses
incurred by Lessor, the Agent or any Lender incident to such conveyance
(including, without limitation, all costs, expenses, fees, premiums and taxes
described in Section 14.5(b))); plus (b) interest at the Overdue Rate on the
foregoing amount from such Payment Date until the date of payment;
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(d) Lessor may, at its option, not terminate this Lease, and
continue to collect all Basic Rent, Supplemental Rent, and all other amounts
(including, without limitation, the Funded Amount) due Lessor (together with all
costs of collection) and enforce the Lessees' obligations under this Lease as
and when the same become due, or are to be performed, and at the option of
Lessor, upon any abandonment of any Leased Property by Lessee or re-entry of
same by Lessor, Lessor may, in its sole and absolute discretion, elect not to
terminate this Lease with respect thereto and may make such reasonable
alterations and necessary repairs in order to relet such Leased Property, and
relet such Leased Property or any part thereof 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 Lessor in its reasonable
discretion may deem advisable; and upon each such reletting all rentals actually
received by Lessor from such reletting shall be applied to the Lessees'
obligations hereunder in such order, proportion and priority as Lessor may elect
in Lessor's sole and absolute discretion. If such rentals received from such
reletting during any Rent Period are less than the Rent to be paid during that
Rent Period by the Lessees hereunder, the Lessees shall pay any deficiency, as
calculated by Lessor, to Lessor on the Payment Date for such Rent Period;
(e) Lessor may, whether or not Lessor shall have exercised or
shall thereafter at any time exercise any of its rights under paragraph (b), (c)
or (d) of this Article XIII, demand, by written notice to DTD specifying a date
(the "Final Rent Payment Date") not earlier than 30 days after the date of such
notice, that Lessees purchase, on the Final Rent Payment Date, all of the
remaining Leased Properties in accordance with the provisions of Sections 14.2,
14.4 and 14.5; provided, however, that (1) such purchase shall occur on the date
set forth in such notice, notwithstanding the provision in Section 14.2 calling
for such purchase to occur on the Lease Termination Date; and (2) Lessor's
obligations under Section 14.5(a) shall be limited to delivery of a special
warranty deed and quit claim bill of sale of such Leased Properties, without
recourse or warranty, but free and clear of Lessor Liens;
(f) Lessor may exercise any other right or remedy that may be
available to it under Applicable Law, 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
Rent Period(s), and such suits shall not in any manner prejudice Lessor's right
to collect any such damages for any subsequent Rent Period(s), or Lessor may
defer any such suit until after the expiration of the Lease Term, in which event
such suit shall be deemed not to have accrued until the expiration of the Lease
Term; or
(g) Lessor may retain and apply against Lessor's damages all
sums which Lessor would, absent such Event of Default, be required to pay to, or
turn over to, a Lessee pursuant to the terms of this Lease.
Section 13.2 Remedies Cumulative; No Waiver; Consents. To the extent
permitted by, and subject to the mandatory requirements of, Applicable Law, each
and every right, power and remedy herein specifically given to Lessor or
otherwise in this Lease shall be
19
cumulative and shall be in addition to every other right, power and remedy
herein specifically given or now or hereafter existing at law, in equity or by
statute, and each and every right, power and remedy whether specifically herein
given or otherwise existing may be exercised from time to time and as often and
in such order as may be deemed expedient by Lessor, and the exercise or the
beginning of the exercise of any power or remedy shall not be construed to be a
waiver of the right to exercise at the same time or thereafter any right, power
or remedy. No delay or omission by Lessor in the exercise of any right, power or
remedy or in the pursuit of any remedy shall impair any such right, power or
remedy or be construed to be a waiver of any default on the part of any Lessee
or to be an acquiescence therein. Lessor's consent to any request made by any
Lessee shall not be deemed to constitute or preclude the necessity for obtaining
Lessor's consent, in the future, to all similar requests. No express or implied
waiver by Lessor of any Event of Default shall in any way be, or be construed to
be, a waiver of any future or subsequent Potential Event of Default or Event of
Default. To the extent permitted by Applicable Law, each Lessee hereby waives
any rights now or hereafter conferred by statute or otherwise that may require
Lessor to sell, lease or otherwise use any Leased Property or part thereof in
mitigation of Lessor's damages upon the occurrence of an Event of Default or
that may otherwise limit or modify any of Lessor's rights or remedies under this
Article XIII.
Section 13.3 Purchase Upon an Event of Default. Upon the occurrence of
an Event of Default, until such time as Lessor commences material preparations
for the sale or re-lease of the Leased Properties, the Lessees may purchase all,
but not less than all, of the Leased Properties for the Lease Balance, plus any
amounts due pursuant to Section 7.5 of the Master Agreement. Such purchase shall
be made in accordance with Section 14.5, upon not less than five (5) Business
Days' written notice (which shall be irrevocable) to Lessor, which notice shall
set forth the date of purchase (which shall be a date no later than 30 Business
Days from the date of such notice).
ARTICLE XIV.
SALE, RETURN OR PURCHASE OF LEASED PROPERTY; RENEWAL
Section 14.1 Lessee's Option to Purchase.
(a) Subject to the terms, conditions and provisions set forth
in this Article XIV, each Lessee shall have the option (the "Purchase Option"),
to be exercised as set forth below, to purchase from Lessor, Lessor's interest
in all of the Leased Properties; provided that, except as set forth in paragraph
(b) below, such option must be exercised with respect to all, but not less than
all, of the Leased Properties under all of the Lease Supplements. Such option
must be exercised by written notice to Lessor not later than six months prior to
the Lease Termination Date which notice shall be irrevocable; such notice shall
specify the date that such purchase shall take place, which date shall be a date
occurring not less than thirty (30) days after such notice or the Lease
Termination Date (whichever is earlier). If the Purchase Option is exercised
pursuant to the foregoing, then, subject to the provisions set forth in this
Article XIV, on the applicable
20
purchase date or the Lease Termination Date, as the case may be, Lessor shall
convey to each Lessee, by special warranty deed and bill of sale, without
recourse or warranty (other than as to the absence of Lessor Liens) and each
Lessee shall purchase from Lessor, Lessor's interest in the Leased Properties
leased by such Lessee.
(b) Subject to the terms, conditions and provisions set forth
in this Article XIV, each Lessee shall have the option (the "Partial Purchase
Option"), to be exercised as set forth below, to purchase from Lessor Lessor's
interest in any Leased Property leased by such Lessee, provided that the Partial
Purchase Option shall only be available if, after giving effect thereto, at
least one Leased Property remains subject to this Lease. Such option may be
exercised by written notice to Lessor at any time prior to the last year of the
term of this Lease, which notice shall be irrevocable; such notice shall specify
the Leased Property to be purchased and the date that such purchase shall take
place, which date shall be a date occurring not less than thirty (30) days after
such notice. If a Partial Purchase Option is exercised pursuant to the
foregoing, subject to the provisions set forth in this Article XIV, on the
applicable purchase date, Lessor shall convey to the related Lessee, and such
Lessee shall purchase from Lessor, Lessor's interest in the Leased Property that
is the subject of such Partial Purchase Option pursuant to Section 14.5.
Section 14.2 Conveyance to Lessee. Unless (a) the Lessees shall have
properly exercised the Purchase Option and purchased the Leased Properties
pursuant to Section 14.1(a) or 14.1(b) hereof, or (b) the Lessees shall have
properly exercised the Remarketing Option and shall have fulfilled all of the
conditions of Section 14.6 hereof, then, subject to the terms, conditions and
provisions set forth in this Article XIV, each Lessee shall purchase from
Lessor, and Lessor shall convey to each Lessee, on the Lease Termination Date
all of Lessor's interest in the Leased Properties leased to such Lessee. Any
Lessee may designate, in a notice given to Lessor not less than ten (10)
Business Days prior to the closing of such purchase, or any purchase pursuant to
Section 14.1(a) or (b),(time being of the essence), the transferee to whom the
conveyance shall be made (if other than to such Lessee), in which case such
conveyance shall (subject to the terms and conditions set forth herein) be made
to such designee; provided, however, that such designation of a transferee shall
not cause any Lessee to be released, fully or partially, from any of its
obligations under this Lease.
Section 14.3 Acceleration of Purchase Obligation. The Lessees shall be
obligated to purchase Lessor's interest in the Leased Properties immediately,
automatically and without notice upon the occurrence of any Event of Default
specified in clause (f) of Article XII, for the purchase price set forth in
Section 14.4. Upon the occurrence and during the continuance of any other Event
of Default, the Lessees shall be obligated to purchase Lessor's interest in the
Leased Properties for the purchase price set forth in Section 14.4 upon notice
of such obligation from Lessor.
Section 14.4 Determination of Purchase Price. Upon the purchase by the
Lessees of Lessor's interest in the Leased Properties upon the exercise of the
Purchase Option or
21
pursuant to Section 14.2 or 14.3, the aggregate purchase price for all of the
Leased Properties shall be an amount equal to the Lease Balance as of the
closing date for such purchase, plus any amount due pursuant to Section 7.5(f)
of the Master Agreement as a result of such purchase. Upon the purchase by a
Lessee of Lessor's interest in a Leased Property upon the exercise of a Partial
Purchase Option, the purchase price for such Leased Property shall be an amount
equal to the Leased Property Balance for such Leased Property as of the closing
date for such purchase, plus any amount due pursuant to Section 7.5(f) of the
Master Agreement as the result of such purchase.
Section 14.5 Purchase Procedure.
(a) If a Lessee shall purchase Lessor's interest in a Leased
Property pursuant to any provision of this Lease, (i) such Lessee shall accept
from Lessor and Lessor shall convey such Leased Property by a duly executed and
acknowledged special warranty deed and quit claim bill of sale of such a Leased
Property in recordable form, (ii) upon the date fixed for any purchase of
Lessor's interest in Leased Property hereunder, the related Lessee(s) shall pay
to the order of the Agent (or Lessor if the Loans have been paid in full) the
Lease Balance or Leased Property Balance, as applicable, plus any amount due
pursuant to Section 7.5 of the Master Agreement as a result of such purchase by
wire transfer of immediately available funds, (iii) Lessor will execute and
deliver to the related Lessee such other documents, including releases,
affidavits, termination agreements and termination statements, as may be legally
required or as may be reasonably requested by Lessee in order to effect such
conveyance, free and clear of Lessor Liens and the Liens of the Operative
Documents and (iv) if such Leased Property is subject to a Ground Lease, Lessor
will execute and deliver to the related Lessee an assignment or termination of
such Ground Lease, as directed by such Lessee, in such form as may be reasonably
requested by such Lessee, and such Lessee shall pay any amounts due with respect
thereto under such Ground Lease.
(b) Each Lessee shall, at such Lessee's sole cost and expense,
obtain all required governmental and regulatory approval and consents and in
connection therewith shall make such filings as required by Applicable Law; in
the event that Lessor is required by Applicable Law to take any action in
connection with such purchase and sale, the Lessees shall pay prior to transfer
all reasonable out-of-pocket costs incurred by Lessor in connection therewith.
Without limiting the foregoing, all costs incident to such conveyance,
including, without limitation, each Lessee's attorneys' fees, Lessor's
attorneys' fees, commissions, each Lessee's and Lessor's escrow fees, recording
fees, title insurance premiums and all applicable documentary transfer or other
transfer taxes and other taxes required to be paid in order to record the
transfer documents that might be imposed by reason of such conveyance and the
delivery of such deed shall be borne entirely by and paid by the Lessees.
(c) Upon expiration or termination of this Lease resulting in
conveyance of Lessor's interest in the title to the Leased Properties to the
Lessees, there shall be no apportionment of rents (including, without
limitation, water rents and sewer rents), taxes, insurance, utility charges or
other charges payable with respect to the Leased Properties, all of
22
such rents, taxes, insurance, utility or other charges due and payable with
respect to the Leased Properties prior to termination being payable by the
Lessees hereunder and all due after such time being payable by the Lessees as
the then owners of the Leased Properties.
Section 14.6 Option to Remarket. Subject to the fulfillment of each of
the conditions set forth in this Section 14.6, the Lessees shall have the option
to market all of, but not less than all of, the Leased Properties for Lessor
(the "Remarketing Option").
The Lessees' effective exercise and consummation of the Remarketing
Option shall be subject to the due and timely fulfillment of each of the
following provisions, the failure of any of which, unless waived in writing by
Lessor and the Lenders, shall render the Remarketing Option and the Lessees'
exercise thereof null and void, in which event, each Lessee shall be obligated
to perform its obligations under Section 14.2.
(a) Not later than twelve months prior to the Lease
Termination Date, DTD shall give to Lessor and the Agent written notice of the
Lessees' exercise of the Remarketing Option.
(b) Not later than ten (10) Business Days prior to the Lease
Termination Date, each Lessee shall deliver to Lessor and the Agent an
environmental assessment of each Leased Property leased by it dated not later
than forty-five (45) days prior to the Lease Termination Date. Such
environmental assessment shall be prepared by an environmental consultant
selected by the related Lessee and reasonably satisfactory to the Required
Funding Parties, shall be in form, detail and substance reasonably satisfactory
to the Required Funding Parties, and shall otherwise indicate no degradation in
environmental conditions beyond those described in the related Environmental
Audit for which corrective action is required by Applicable Law and shall not
include a recommendation for further investigation to make such determination.
(c) On the date of DTD's notice to Lessor and the Agent of the
Lessees' exercise of the Remarketing Option, each of the Construction Conditions
shall have been timely satisfied and no Event of Default or Potential Event of
Default shall exist, and thereafter, no Event of Default or Potential Event of
Default shall exist under this Lease.
(d) Each Lessee shall have completed in all material respects
all Alterations, restoration and rebuilding of the Leased Properties leased by
it pursuant to Sections 6.1, 6.2, 10.3 and 10.4 (as the case may be) and shall
have fulfilled in all material respects all of the conditions and requirements
in connection therewith pursuant to said Sections, in each case by the date on
which Lessor and the Agent receive DTD's notice of the Lessees' exercise of the
Remarketing Option (time being of the essence), regardless of whether the same
shall be within such Lessee's control.
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(e) Upon request by the Agent, each Lessee shall promptly
provide any maintenance records relating to each Leased Property leased by it to
Lessor, the Agent and any potential purchaser, and shall otherwise do all things
necessary to deliver possession of such Leased Property to the potential
purchaser at the appropriate closing date. Each Lessee shall allow Lessor, the
Agent and any potential purchaser reasonable access during normal business hours
to any Leased Property for the purpose of inspecting the same.
(f) On the Lease Termination Date, each Lessee shall surrender
the Leased Properties leased by it in accordance with Section 14.8 hereof.
(g) In connection with any such sale of the Leased Properties,
each Lessee will provide to the purchaser all customary "seller's" indemnities
requested by the potential purchaser (taking into account the location and
nature of the Leased Properties), representations and warranties regarding
title, absence of Liens (except Lessor Liens) and the condition of the Leased
Properties. Each Lessee shall fulfill all of the requirements set forth in
clause (b) of Section 14.5, and such requirements are incorporated herein by
reference. As to Lessor, any such sale shall be made on an "as is, with all
faults" basis without representation or warranty by Lessor, other than the
absence of Lessor Liens.
(h) In connection with any such sale of Leased Properties,
each Lessee shall pay directly, and not from the sale proceeds, all prorations,
credits, costs and expenses of the sale of the Leased Properties leased by it,
whether incurred by Lessor, any Lender, the Agent or such Lessee, including
without limitation, to the extent not paid by the purchaser, the cost of all
title insurance, surveys, environmental reports, appraisals, transfer taxes,
Lessor's and the Agent's attorneys' fees, such Lessee's attorneys' fees,
commissions, escrow fees, recording fees, and all applicable documentary and
other transfer taxes.
(i) The Lessees, jointly and severally, shall pay to the Agent
on the Lease Termination Date (or to such other Person as Agent shall notify
Lessee in writing, or in the case of Supplemental Rent, to the Person entitled
thereto) an amount equal to the Recourse Deficiency Amount, plus all accrued and
unpaid Basic Rent and Supplemental Rent, and all other amounts hereunder which
have accrued prior to or as of such date, in the type of funds specified in
Section 3.3 hereof.
If the Lessees have exercised the Remarketing Option, the following
additional provisions shall apply: During the period commencing on the date
twelve months prior to the scheduled expiration of the Lease Term, one or more
of the Lessees shall, as nonexclusive agent for Lessor, use commercially
reasonable efforts to sell Lessor's interest in the Leased Properties and will
attempt to obtain the highest purchase price therefor. All such marketing of the
Leased Properties shall be at the Lessees' sole expense. Lessee promptly shall
submit all bids
24
to Lessor and the Agent and Lessor and the Agent will have the right to review
the same and the right to submit any one or more bids. All bids shall be on an
all-cash basis. In no event shall such bidder be a Lessee or any Subsidiary or
Affiliate of a Lessee. The written offer must specify the Lease Termination Date
as the closing date. If, and only if, the aggregate selling price (net of
closing costs and prorations, as reasonably estimated by the Agent) is less than
the difference between the Lease Balance at such time minus the Recourse
Deficiency Amount, then Lessor or the Agent may, in its sole and absolute
discretion, by notice to DTD, reject such offer to purchase, in which event the
parties will proceed according to the provisions of Section 14.7 hereof. If
neither Lessor nor the Agent rejects such purchase offer as provided above, the
closing of such purchase of the Leased Properties by such purchaser shall occur
on the Lease Termination Date, contemporaneously with the Lessees' surrender of
the Leased Properties in accordance with Section 14.8 hereof, and the gross
proceeds of the sale (i.e., without deduction for any marketing, closing or
other costs, prorations or commissions) shall be paid directly to the Agent (or
Lessor if the Funded Amounts have been fully paid); provided, however, that if
the sum of the gross proceeds from such sale plus the Recourse Deficiency Amount
paid by the Lessees on the Lease Termination Date pursuant to Section 14.6(i),
minus any and all reasonable costs and expenses (including broker fees,
appraisal costs, reasonable legal fees and transfer taxes) incurred by the Agent
or Lessor in connection with the marketing of the Leased Properties or the sale
thereof exceeds the Lease Balance as of such date, then the excess shall be paid
to DTD on the Lease Termination Date. No Lessee shall have the right, power or
authority to bind Lessor in connection with any proposed sale of the Leased
Properties.
Section 14.7 Rejection of Sale. Notwithstanding anything contained
herein to the contrary, if Lessor or the Agent rejects the purchase offer for
the Leased Properties as provided in (and subject to the conditions set forth
in) Section 14.6, then (a) the Lessees, jointly and severally, shall pay to the
Agent the Recourse Deficiency Amount pursuant to Section 14.6(i), and (b) Lessor
shall retain title to the Leased Properties.
Section 14.8 Return of Leased Property. If Lessor retains title to any
Leased Property pursuant to Section 14.7 hereof, then each Lessee shall, on the
Lease Termination Date, and at its own expense, return possession of the Leased
Properties leased by it to Lessor for retention by Lessor or, if the Lessees
properly exercise the Remarketing Option and fulfill all of the conditions of
Section 14.6 hereof and neither Lessor nor the Agent rejects such purchase offer
pursuant to Section 14.6, then each Lessee shall, on such Lease Termination
Date, and at its own cost, transfer possession of the Leased Properties leased
by it to the independent purchaser thereof, in each case by surrendering the
same into the possession of Lessor or such purchaser, as the case may be, free
and clear of all Liens other than Lessor Liens, in as good condition as it was
on the Completion Date therefor in the case of new Construction, or the Funding
Date (as modified by Alterations permitted by this Lease), ordinary wear and
tear excepted, and in compliance in all material respects with Applicable Law.
Each Lessee shall, on and within a reasonable time before and after the Lease
Termination Date, cooperate with Lessor and the independent purchaser of any
Leased
25
Property leased by such Lessee in order to facilitate the ownership and
operation by such purchaser of such Leased Property after the Lease Termination
Date, which cooperation shall include the following, all of which such Lessee
shall do on or before the Lease Termination Date or as soon thereafter as is
reasonably practicable: providing all books and records regarding the related
Lessee's maintenance of such Leased Property and all know-how, data and
technical information relating thereto, providing a copy of the Plans and
Specifications within the possession of such Lessee or DTD, granting or
assigning all licenses (to the extent assignable) necessary for the operation
and maintenance of such Leased Property, and cooperating in seeking and
obtaining all necessary Governmental Action. Each Lessee shall have also paid
the cost of all Alterations commenced prior to the Lease Termination Date. The
obligations of such Lessee under this Article XIV shall survive the expiration
or termination of this Lease.
Section 14.9 Renewal. Subject to the conditions set forth herein, DTD
may, by written notice to Lessor and the Agent given not later than twelve
months and not earlier than sixteen months, prior to the then scheduled Lease
Termination Date, request to renew this Lease for five years, commencing on the
date following such Lease Termination Date, provided that in no event shall the
Lease Term exceed fifteen (15) years. No later than the date that is 45 days
after the date the request to renew has been delivered to each of Lessor and the
Agent, the Agent will notify DTD whether or not Lessor and the Lenders consent
to such renewal request (which consent may be granted or denied in the Lessor's
and each Lender's sole discretion and may be conditioned on such conditions
precedent as may be specified by Lessor or such Lender). If the Agent fails to
respond in such time frame, such failure shall be deemed to be a rejection of
such request.
Section 14.10 Environmental Report. Upon termination of this Lease,
unless the Lessees have exercised the Remarketing Option and complied with
Section 14.6, each Lessee shall deliver, at the Lessees' expense, to Lessor and
the Agent an environmental assessment of each Leased Property leased by it at
any time during the Lease Term. Such environmental assessment shall be prepared
by an environmental consultant, and shall be in a form, reasonably satisfactory
to Lessor and the Agent.
ARTICLE XV.
LESSEE'S EQUIPMENT
After any repossession of any Leased Property (whether or not this
Lease has been terminated), the related Lessee, at its expense and so long as
such removal of such trade fixture, personal property or equipment shall not
result in a violation of Applicable Law, shall, within a reasonable time after
such repossession or within ninety (90) days after such Lessee's receipt of
Lessor's written request (whichever shall first occur), remove all of such
Lessee's trade fixtures, personal property and equipment from such Leased
Property (to the extent that the same can be readily removed from such Leased
Property without causing
26
material damage to such Leased Property); provided, however, that such Lessee
shall not remove any such trade fixtures, personal property or equipment that
has been financed by Lessor under the Operative Documents or otherwise
constituting Leased Property (or that constitutes a replacement of such
property). Any of a Lessee's trade fixtures, personal property and equipment not
so removed by such Lessee within such period shall be considered abandoned by
such Lessee, and title thereto shall without further act vest in Lessor, and may
be appropriated, sold, destroyed or otherwise disposed of by Lessor without
notice to any Lessee and without obligation to account therefor and the related
Lessee will pay Lessor, upon written demand, all reasonable costs and expenses
incurred by Lessor in removing, storing or disposing of the same and all costs
and expenses incurred by Lessor to repair any damage to such Leased Property
caused by such removal. Each Lessee will immediately repair at its expense all
damage to such Leased Property caused by any such removal (unless such removal
is effected by Lessor, in which event such Lessee shall pay all reasonable costs
and expenses incurred by Lessor for such repairs). Lessor shall have no
liability in exercising Lessor's rights under this Article XV, nor shall Lessor
be responsible for any loss of or damage to any Lessee's personal property and
equipment.
ARTICLE XVI.
RIGHT TO PERFORM FOR LESSEE
If any Lessee shall fail to perform or comply with any of its
agreements contained herein, Lessor, upon notice to DTD or such Lessee, may
perform or comply with such agreement, and Lessor shall not thereby be deemed to
have waived any default caused by such failure, and the amount of such payment
and the amount of the expenses of Lessor (including actual and reasonable
attorneys' fees and expenses) incurred in connection with such payment or the
performance of or compliance with such agreement, as the case may be, shall be
deemed Supplemental Rent, payable by the related Lessee to Lessor within thirty
(30) days after written demand therefor.
ARTICLE XVII.
MISCELLANEOUS
Section 17.1 Reports. To the extent required under Applicable Law and
to the extent it is reasonably practical for a Lessee to do so, such Lessee
shall prepare and file in timely fashion, or, where such filing is required to
be made by Lessor or it is otherwise not reasonably practical for a Lessee to
make such filing, Lessee shall prepare and deliver to Lessor (with a copy to the
Agent) within a reasonable time prior to the date for filing and Lessor shall
file, any material reports with respect to the condition or operation of such
Leased Property that shall be required to be filed with any Governmental
Authority.
27
Section 17.2 Binding Effect; Successors and Assigns; Survival. The
terms and provisions of this Lease, and the respective rights and obligations
hereunder of Lessor and the Lessees, shall be binding upon their respective
successors, legal representatives and assigns (including, in the case of Lessor,
any Person to whom Lessor may transfer any Leased Property or any interest
therein in accordance with the provisions of the Operative Documents), and inure
to the benefit of their respective permitted successors and assigns, and the
rights granted hereunder to the Agent and the Lenders shall inure (subject to
such conditions as are contained herein) to the benefit of their respective
permitted successors and assigns. Each Lessee hereby acknowledges that Lessor
has assigned all of its right, title and interest to, in and under this Lease to
the Agent and the Lenders pursuant to the Loan Agreement and related Operative
Documents, and that all of Lessor's rights hereunder may be exercised by the
Agent.
Section 17.3 Quiet Enjoyment. Lessor covenants that it will not
interfere in the related Lessee's or any of its permitted sublessees' quiet
enjoyment of the Leased Properties in accordance with this Lease during the
Lease Term, so long as no Event of Default has occurred and is continuing. Such
right of quiet enjoyment is independent of, and shall not affect, Lessor's
rights otherwise to initiate legal action to enforce the obligations of the
Lessees under this Lease.
Section 17.4 Notices. Unless otherwise specified herein, all notices,
offers, acceptances, rejections, consents, requests, demands or other
communications to or upon the respective parties hereto shall be in writing and
shall be deemed to have been given as set forth in Section 8.2 of the Master
Agreement. All such notices, offers, acceptances, rejections, consents,
requests, demands or other communications shall be addressed as follows or to
such other address as any of the parties hereto may designate by written notice:
If to Lessor: Atlantic Financial Group, Ltd.
c/o Grogan & Browner
2311 Cedar Springs Road, Suite 150
Dallas, Texas 75201
Attn: Stephen Brookshire
28
If to DTD
or any other Lessee: Dollar Tree Stores, Inc.
500 Volvo Parkway
Chesapeake, VA 23320
Attn: Frederick C. Coble
Facsimile: 757-321-5111
with a copy to: Hofhemier Nusbaum, P.C.
1700 Dominion Tower
999 Waterside Drive
Norfolk, VA 23510
Attn: William A. Old, Jr., Esq.
Facsimile: 757-629-0660
If to Agent: Crestar Bank
500 Main Street
Norfolk, Virginia 23510
Attn: Bruce W. Nave
Facsimile: 757-624-5457
with a copy to: SunTrust Equitable Securities Corporation
303 Peachtree Street, 24th Floor
MC 3951
Atlanta, Georgia 30308
Attn: Todd Shutley
If to a Lender, to the address provided in the Master Agreement.
Section 17.5 Severability. Any provision of this Lease that shall be
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, and Lessee shall remain
liable to perform its obligations hereunder except to the extent of such
unenforceability. To the extent permitted by Applicable Law, each Lessee hereby
waives any provision of law that renders any provision hereof prohibited or
unenforceable in any respect.
Section 17.6 Amendment; Complete Agreements. Neither this Lease nor any
of the terms hereof may be terminated, amended, supplemented, waived or modified
orally, except by an instrument in writing signed by Lessor and DTD in
accordance with the provisions of Section 8.4 of the Master Agreement. This
Lease, together with the applicable Lease Supplement and the other Operative
Documents, is intended by the parties as a final expression of their lease
agreement and as a complete and exclusive statement of the terms
29
thereof, all negotiations, considerations and representations between the
parties having been incorporated herein and therein. No course of prior dealings
between the parties or their officers, employees, agents or Affiliates shall be
relevant or admissible to supplement, explain, or vary any of the terms of this
Lease or any other Operative Document. Acceptance of, or acquiescence in, a
course of performance rendered under this or any prior agreement between the
parties or their Affiliates shall not be relevant or admissible to determine the
meaning of any of the terms of this Lease or any other Operative Document. No
representations, undertakings, or agreements have been made or relied upon in
the making of this Lease other than those specifically set forth in the
Operative Documents.
Section 17.7 Construction. This Lease shall not be construed more
strictly against any one party, it being recognized that both of the parties
hereto have contributed substantially and materially to the preparation and
negotiation of this Lease.
Section 17.8 Headings. The Table of Contents and headings of the
various Articles and Sections of this Lease are for convenience of reference
only and shall not modify, define or limit any of the terms or provisions
hereof.
Section 17.9 Counterparts. This Lease may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute but
one and the same instrument.
Section 17.10 GOVERNING LAW. THIS LEASE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE,
EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE LEASEHOLD OR MORTGAGE
ESTATES HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO,
WHICH SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATES IN WHICH SUCH ESTATES ARE LOCATED.
Section 17.11 Discharge of Lessee's Obligations by its Subsidiaries or
Affiliates. Lessor agrees that performance of any Lessee's obligations hereunder
by one or more of such Lessee's Subsidiaries or Affiliates shall constitute
performance by Lessee of such obligations to the same extent and with the same
effect hereunder as if such obligations were performed by such Lessee, but no
such performance shall excuse any Lessee from any obligation not performed by it
or on its behalf under the Operative Documents.
Section 17.12 Liability of Lessor Limited. Except as otherwise
expressly provided below in this Section 17.12, it is expressly understood and
agreed by and between each Lessee, Lessor and their respective successors and
assigns that nothing herein contained shall be construed as creating any
liability of Lessor or any of its Affiliates or any of their respective
officers, directors, employees or agents, individually or personally, for any
failure
30
to perform any covenant, either express or implied, contained herein, all such
liability (other than that resulting from Lessor's gross negligence or willful
misconduct, except to the extent imputed to Lessor by virtue of any Lessee's
action or failure to act), if any, being expressly waived by each Lessee and by
each and every Person now or hereafter claiming by, through or under any Lessee,
and that, so far as Lessor or any of its Affiliates or any of their respective
officers, directors, employees or agents, individually or personally, is
concerned, each Lessee and any Person claiming by, through or under any Lessee
shall look solely to the right, title and interest of Lessor in and to the
Leased Properties and any proceeds from Lessor's sale or encumbrance thereof
(provided, however, that no Lessee shall be entitled to any double recovery) for
the performance of any obligation under this Lease and under the Operative
Documents and the satisfaction of any liability arising therefrom (other than
that resulting from Lessor's gross negligence or willful misconduct, except to
the extent imputed to Lessor by virtue of any Lessee's action or failure to
act).
Section 17.13 Estoppel Certificates. Each party hereto agrees that at
any time and from time to time during the Lease Term, it will promptly, but in
no event later than thirty (30) days after request by the other party hereto,
execute, acknowledge and deliver to such other party or to any prospective
purchaser (if such prospective purchaser has signed a commitment or letter of
intent to purchase any Leased Property or any part thereof or any Note),
assignee or mortgagee or third party designated by such other party, a
certificate stating (a) that this Lease is unmodified and in force and effect
(or if there have been modifications, that this Lease is in force and effect as
modified, and identifying the modification agreements); (b) the date to which
Basic Rent has been paid; (c) whether or not there is any existing default by
any Lessee in the payment of Basic Rent or any other sum of money hereunder, and
whether or not there is any other existing default by either party with respect
to which a notice of default has been served, and, if there is any such default,
specifying the nature and extent thereof; (d) whether or not, to the knowledge
of the signer, there are any setoffs, defenses or counterclaims against
enforcement of the obligations to be performed hereunder existing in favor of
the party executing such certificate and (e) other items that may be reasonably
requested; provided that no such certificate may be requested unless the
requesting party has a good faith reason for such request.
Section 17.14 No Joint Venture. Any intention to create a joint
venture, partnership or other fiduciary relationship between Lessor and any
Lessee is hereby expressly disclaimed.
Section 17.15 No Accord and Satisfaction. The acceptance by Lessor of
any sums from any Lessee (whether as Basic Rent or otherwise) in amounts which
are less than the amounts due and payable by the Lessees hereunder is not
intended, nor shall be construed, to constitute an accord and satisfaction of
any dispute between Lessor and any Lessee regarding sums due and payable by any
Lessee hereunder, unless Lessor specifically deems it as such in writing.
31
Section 17.16 No Merger. In no event shall the leasehold interests,
estates or rights of any Lessee hereunder, or of the holder of any Notes secured
by a security interest in this Lease, merge with any interests, estates or
rights of Lessor in or to the Leased Properties, it being understood that such
leasehold interests, estates and rights of each Lessee hereunder, and of the
holder of any Notes secured by a security interest in this Lease, shall be
deemed to be separate and distinct from Lessor's interests, estates and rights
in or to the Leased Properties, notwithstanding that any such interests, estates
or rights shall at any time or times be held by or vested in the same person,
corporation or other entity.
Section 17.17 Survival. The obligations of each Lessee to be performed
under this Lease prior to the Lease Termination Date and the obligations of
Lessee pursuant to Articles III, X, XI, XIII, Sections 14.2, 14.3, 14.4, 14.5,
14.8, Articles XV, and XVI, and Sections 17.10 and 17.12 shall survive the
expiration or termination of this Lease. The extension of any applicable statute
of limitations by Lessor, any Lessee, the Agent or any Indemnitee shall not
affect such survival.
Section 17.18 Chattel Paper. To the extent that this Lease constitutes
chattel paper (as such term is defined in the Uniform Commercial Code in any
applicable jurisdiction), no security interest in this Lease may be created
through the transfer or possession of any counterpart other than the sole
original counterpart, which shall be identified as the original counterpart by
the receipt of the Agent.
Section 17.19 Time of Essence. Time is of the essence of this Lease.
Section 17.20 Recordation of Lease. Each Lessee will, at its expense,
cause this Lease or a memorandum of lease in form and substance reasonably
satisfactory to Lessor and such Lessee (if permitted by Applicable Law) to be
recorded in the proper office or offices in the States and the municipalities in
which the Land is located.
Section 17.21 Investment of Security Funds. The parties hereto agree
that any amounts not payable to a Lessee pursuant to any provision of Article
VIII, X or XIV or this Section 17.21 shall be held by the Agent (or Lessor if
the Loans have been fully paid) as security for the obligations of the Lessees
under this Lease and the Master Agreement and of Lessor under the Loan
Agreement. At such time as such amounts are payable to the Lessee, such amounts,
net of any amounts previously applied to the Lessees' obligations hereunder or
under the Master Agreement (which application is hereby agreed to by Lessee),
shall be paid to the related Lessee. Any such amounts which are held by the
Agent (or Lessor if the Loans have been fully paid) pending payment to a Lessee
shall until paid to such Lessee, as provided hereunder or until applied against
the Lessees' obligations herein and under the Master Agreement and distributed
as provided in the Loan Agreement or herein (after the Loan Agreement is no
longer in effect) in connection with any exercise of remedies hereunder, be
invested by the Agent or Lessor, as the case may be, as directed from time to
time in writing by Lessee (provided, however, if an Event of Default has
occurred and is
32
continuing it will be directed by the Agent or, if the Loans have been fully
paid, Lessor) and at the expense and risk of the Lessees, in Permitted
Investments. Any gain (including interest received) realized as the result of
any such investment (net of any fees, commissions and other expenses, if any,
incurred in connection with such investment) shall be applied in the same manner
as the principal invested. Lessee upon demand shall pay to the Agent or Lessor,
as appropriate, the amount of any loss incurred in connection with all such
investments and the liquidation thereof.
Section 17.22 Ground Leases. Each Lessee will, at its expense, timely
perform all of the obligations of Lessor, in its capacity as ground lessee,
under each Ground Lease and, if requested by Lessor shall provide satisfactory
evidence to Lessor of such performance.
Section 17.23 Land and Building. If any Building and the Land on which
such Building is located are subject to separate Lease Supplements, at any time
that the related Lessee exercises an option to purchase such Building or such
Land, or to renew this Lease with respect to such Building or such Land, or is
obligated to purchase such Building or such Land as a result of an Event of
Loss, an Event of Taking or an Event of Default, such purchase or renewal shall
be made simultaneously with respect to all of such Building and such Land.
Section 17.24 Joint and Several. Each obligation of each Lessee
hereunder shall be a joint and several obligation of all of the Lessees.
Section 17.25 Construction Land Interests. Notwithstanding any other
provision of this Lease or any of the Operative Documents, the following shall
apply with respect to any Construction Land Interest and take priority over any
other provision hereof or any of the Operative Documents from the date hereof
until the earlier of the Completion Date for such Leased Property or the
Construction Term Expiration Date:
(a) If the Completion Date for such Leased Property has not
occurred prior to the Construction Term Expiration Date, which failure is not
waived by the Lessor; or
(b) If the cost of the acquisition of Land and construction
of the Buildings exceeds the Construction Budget for such Leased Property which
is not accepted and waived by the Lessor; or
(c) Upon the occurrence of an Event of Default which is based
upon the existence of any mechanics, materialmen or similar lien based upon
goods or services provided to such Leased Property which is not a Permitted
Lien; or
(d) Upon the occurrence of an Event of Default which is based
upon a casualty loss of all or substantially all of such Leased Property;
33
which, in any event, is both (i) unrelated to any breach by any Lessee, the
Guarantor or the Construction Agent of any representation, warranty or
obligation under any Operative Document, (ii) such event or circumstances are
beyond the control of such Persons, and (iii) not caused by any fraud,
misrepresentation, misapplication of funds or malfeasance of any Lessee, the
Guarantor or the Construction Agent then, in any such event, the Construction
Agent shall immediately, at its option, either pay to Lessor the Construction
Failure Payment for such Leased Property or purchase such Leased Property
pursuant to the Construction Agency Agreement, whereupon this Lease shall
terminate with respect to such Leased Property.
Section 17.26 IDB Documentation. If any Leased Property is subject to
an IDB Lease, this Lease shall be deemed to be a sublease. Each Lessee hereby
agrees to perform all of its obligations and all obligations of Lessor under all
IDB Documentation related to any Leased Property.
[Signature page follows]
34
IN WITNESS WHEREOF, the undersigned have each caused this Lease
Agreement to be duly executed and delivered and attested by their respective
officers thereunto duly authorized as of the day and year first above written.
Witnessed: DOLLAR TREE DISTRIBUTION, INC.,
as a Lessee
By: /s/ Karen L. Joyner By: /s/ Frederick C. Coble
Name:Karen L. Joyner Name: Frederick C. Coble
Title: Senior Vice President, CFO
By: /s/ Virginia Collins
Name: Virginia Collins
LEASE
AGREEMENT
S-1
ATLANTIC FINANCIAL GROUP, LTD.,
as Lessor
By: Atlantic Financial Managers,
Inc., its General Partner
Witnessed:
By: /s/ Pattie Keath By: /s/ Stephen Brookshire
Name:Pattie Keath Name: Stephen Brookshire
Title: President
By: /s/ Lori Decker
Name: Lori Decker
LEASE
AGREEMENT
S-2
Receipt of this original counterpart of the foregoing Lease is hereby
acknowledged as of the date hereof.
CRESTAR BANK,
as the Agent
By: /s/ Bruce W. Nave
Name: Bruce W. Nave
Title: Sr. Vice President
LEASE
AGREEMENT
S-3
Recording requested by EXHIBIT A TO THE LEASE
and when recorded mail to:
============================
============================
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
LEASE SUPPLEMENT NO. __ AND MEMORANDUM OF LEASE
THIS LEASE SUPPLEMENT NO. __ (this "Lease Supplement") dated as of [ ],
between ATLANTIC FINANCIAL GROUP, LTD., as lessor (the "Lessor"), and [DOLLAR
TREE DISTRIBUTION, INC., a Virginia corporation,] as lessee (the "Related
Lessee").
WHEREAS Lessor is the owner of the Land described on Schedule I hereto
and wishes to lease the Land together with any Building and other improvements
thereon or which thereafter may be constructed thereon pursuant to the Lease to
Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. Definitions; Interpretation. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Master Lease Agreement,
dated as of January 13, 2000 (as amended and supplemented from time to time, the
"Lease"), among the Lessees named therein and Lessor; and the rules of
interpretation set forth in Appendix A to the Lease shall apply to this Lease
Supplement.
SECTION 2. The Properties. Attached hereto as Schedule I is the
description of certain Land (the "Subject Property"). Effective upon the
execution and delivery of this Lease Supplement by Lessor and Lessee, such Land,
together with any Building and other improvements thereon or which thereafter
may be constructed thereon shall be subject to the terms and provisions of the
Lease and Lessor hereby grants, conveys, transfers and assigns to the Related
Lessee those interests, rights, titles, estates, powers and privileges provided
for in the Lease with respect to the Subject Property.
A-1
SECTION 3. Amendments to Lease with Respect to Subject Property.
Effective upon the execution and delivery of this Lease Supplement by Lessor and
the Related Lessee, the following terms and provisions shall apply to the Lease
with respect to the Subject Property:
[Insert Applicable Sections per Local Law
as contemplated by the Master Agreement]
SECTION 4. Ratification; Incorporation. Except as specifically modified
hereby, the terms and provisions of the Lease are hereby ratified and confirmed
and remain in full force and effect. The terms of the Lease (as amended by this
Lease Supplement) are by this reference incorporated herein and made a part
hereof.
SECTION 5. Original Lease Supplement. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF GEORGIA, BUT EXCLUDING
ALL OTHER CHOICE OF LAW AND CONFLICTS OF LAW RULES OF SUCH STATE, EXCEPT AS TO
MATTERS RELATING TO THE CREATION OF THE LEASEHOLD AND MORTGAGE ESTATES
HEREUNDER, AND THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN
WHICH SUCH ESTATES ARE LOCATED.
SECTION 7. Counterpart Execution. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one and the same
instrument.
A-2
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
Witnessed: ATLANTIC FINANCIAL GROUP, LTD.,
as the Lessor
By: By: Atlantic Financial Managers,
Name: Inc., its General Partner
By: By:____________________________
Name: Name:
Title:
Witnessed: [DOLLAR TREE DISTRIBUTION, INC.],
as Related Lessee
By: ____________________________ By:____________________________
Name: Name:
Title:
By: ____________________________
Name:
S-1
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ______________, ____ ____, this
_____ day of __________, _______________, by _____________________, as
____________________ of Atlantic Financial
Group, Ltd., on behalf of such partnership.
[Notarial Seal] ___________________________
Notary Public
My commission expires: _____________
STATE OF _________________ )
) ss.:
COUNTY OF ________________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ______________, ___ ____, this _____
day of __________, __________, by ___________, as _____________, of [Dollar Tree
Distribution, Inc., a Virginia] corporation, on behalf of the corporation.
[Notarial Seal] ______________________________
Notary Public
My commission expires: ______________
N-1
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as of the date hereof.
CRESTAR BANK,
as the Agent
By: __________________________
Name:
Title:
S-2