Exhibit 10.3
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LEASE AGREEMENT
Dated as of March 12, 2001
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
as Owner Trustee under the DTSD Realty Trust 1999-1,
as Lessor
and
Respecting each particular Property, the Lessee referenced on the signature
pages hereto which has executed a Lease Supplement with respect to such
Property or such other Credit Party designated as Lessee in any Lease
Supplement respecting such Property
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This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Secured Parties (the "Agent") under a Security
Agreement dated as of March 12, 2001 between First Security Bank, National
Association, as Owner Trustee under the DTSD Realty Trust 1999-1 and the Agent,
as amended, modified, extended, supplemented, restated and/or replaced from time
to time in accordance with the applicable provisions thereof. This Lease
Agreement has been executed in several counterparts. To the extent, if any, that
this Lease Agreement 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 Agreement may be created through the transfer or
possession of any counterpart other than the original counterpart containing the
receipt therefor executed by the Agent on the signature page hereof.
TABLE OF CONTENTS
ARTICLE I......................................................................1
1.1 Definitions.........................................................1
1.2 Interpretation.....................................................2
ARTICLE II.....................................................................2
2.1 Property............................................................2
2.2 Lease Term..........................................................2
2.3 Title...............................................................2
2.4 Lease Supplements...................................................3
ARTICLE III....................................................................3
3.1 Rent................................................................3
3.2 Payment of Basic Rent...............................................3
3.3 Supplemental Rent...................................................3
3.4 Performance on a Non-Business Day...................................4
3.5 Rent Payment Provisions.............................................4
ARTICLE IV.....................................................................5
4.1 Taxes; Utility Charges..............................................5
ARTICLE V......................................................................5
5.1 Quiet Enjoyment.....................................................5
ARTICLE VI.....................................................................6
6.1 Net Lease...........................................................6
6.2 No Termination or Abatement.........................................6
ARTICLE VII....................................................................7
ARTICLE VIII...................................................................8
8.1 Condition of the Properties.........................................8
8.2 Possession and Use of the Properties................................9
8.3 Integrated Properties..............................................10
ARTICLE IX....................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements
and Manufacturer's Specifications and Standards....................10
ARTICLE X.....................................................................11
10.1 Maintenance and Repair; Return.....................................11
10.2 Environmental Inspection...........................................12
ARTICLE XI....................................................................13
11.1 Modifications......................................................13
ARTICLE XII...................................................................13
12.1 Warranty of Title..................................................13
ARTICLE XIII..................................................................14
13.1 Permitted Contests Other Than in Respect of Indemnities............14
13.2 Impositions, Utility Charges, Other Matters;
Compliance with Legal Requirements.................................15
ARTICLE XIV...................................................................15
14.1 Public Liability and Workers' Compensation Insurance...............15
14.2 Permanent Hazard and Other Insurance...............................16
14.3 Coverage...........................................................17
ARTICLE XV....................................................................18
15.1 Casualty and Condemnation..........................................18
15.2 Environmental Matters..............................................20
15.3 Notice of Environmental Matters....................................21
ARTICLE XVI...................................................................21
16.1 Termination Upon Certain Events....................................21
16.2 Procedures.........................................................22
ARTICLE XVII..................................................................22
17.1 Lease Events of Default............................................22
17.2 Surrender of Possession............................................26
17.3 Reletting..........................................................26
17.4 Damages............................................................26
17.5 Power of Sale......................................................27
17.6 Final Liquidated Damages...........................................27
17.7 Environmental Costs................................................28
17.8 Waiver of Certain Rights...........................................28
17.9 Assignment of Rights Under Contracts...............................28
17.10 Remedies Cumulative................................................29
ARTICLE XVIII.................................................................29
18.1 Lessor's Right to Cure Lessees' Lease Defaults.....................29
ARTICLE XIX...................................................................29
19.1 Provisions Relating to Any Lessee's Exercise of its
Purchase Option....................................................29
19.2 No Purchase or Termination With Respect to Less
than All of a Property.............................................29
ARTICLE XX....................................................................30
20.1 Purchase Option or Sale Option-General Provisions..................30
20.2 Lessee Purchase Option.............................................30
20.3 Third Party Sale Option............................................31
ARTICLE XXI...................................................................32
21.1 [Intentionally Omitted]............................................32
ARTICLE XXII..................................................................32
22.1 Sale Procedure.....................................................32
22.2 Application of Proceeds of Sale....................................35
22.3 Indemnity for Excessive Wear.......................................35
22.4 Appraisal Procedure................................................35
ARTICLE XXIII.................................................................36
23.1 Holding Over.......................................................36
ARTICLE XXIV..................................................................36
24.1 Risk of Loss.......................................................36
ARTICLE XXV...................................................................37
25.1 Assignment.........................................................37
25.2 Subleases..........................................................37
ARTICLE XXVI..................................................................38
26.1 No Waiver..........................................................38
ARTICLE XXVII.................................................................38
27.1 Acceptance of Surrender............................................38
27.2 No Merger of Title.................................................38
ARTICLE XXVIII................................................................38
28.1 Incorporation of Covenants.........................................38
ARTICLE XXIX..................................................................39
29.1 Notices............................................................39
ARTICLE XXX...................................................................40
30.1 Miscellaneous......................................................40
30.2 Amendments and Modifications.......................................40
30.3 Successors and Assigns.............................................40
30.4 Headings and Table of Contents.....................................40
30.5 Counterparts.......................................................40
30.6 GOVERNING LAW......................................................40
30.7 Calculation of Rent................................................40
30.8 Memoranda of Lease and Lease Supplements...........................41
30.9 Allocations between the Lenders and the Holders....................41
30.10 Limitations on Recourse............................................41
30.11 WAIVERS OF JURY TRIAL..............................................41
30.12 Exercise of Lessor Rights..........................................42
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.....................42
30.14 USURY SAVINGS PROVISION............................................42
EXHIBITS
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of March 12, 2001 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time, this
"Lease") is between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, having its principal office at 79 South Main Street, MAC:
U1254-031, Salt Lake City, Utah 84111, as Owner Trustee under the DTSD Realty
Trust 1999-1, as lessor (the "Lessor"), and respecting each particular Property
subject to this Lease as of the date hereof, the Credit Party referenced on the
signature pages hereto which has executed a Lease Supplement with respect to
such Property and respecting any other Property which becomes subject to this
Lease after the date hereof, each other Credit Party designated as a Lessee in
any Lease Supplement respecting any such Property, as lessee (each such entity
with respect to each such Property may be referred to herein as the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the
Participation Agreement and the Agency Agreement, Lessor will (i) purchase or
ground lease various parcels of real property, some of which will (or may) have
existing Improvements thereon, from one (1) or more third parties designated by
the applicable Lessee and (ii) fund the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of each Property by the applicable Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each
Property upon the Property Closing Date with respect thereto; provided, Basic
Rent with respect thereto shall not be payable until the applicable Rent
Commencement Date; and
C. WHEREAS, Lessor desires to lease to each applicable Lessee, and
each applicable Lessee desires to lease from Lessor, each Property for which
such Lessee has executed a Lease Supplement;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 Definitions.
For purposes of this Lease, capitalized terms used in this
Lease and not otherwise defined herein shall have the meanings assigned to them
in Appendix A to that certain Participation Agreement dated as of March 12, 2001
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time in accordance with the applicable provisions thereof, the
"Participation Agreement") among Lessees, the various parties thereto from time
to time, as the Guarantors, Lessor, the various banks and other lending
institutions which are parties thereto from time to time, as the Holders, the
various banks and other lending institutions which are parties thereto from time
to time, as the Lenders, and First Union National Bank, as agent for the Lenders
and respecting the Security Documents, as the agent for the Secured Parties.
Unless otherwise indicated, references in this Lease to articles, sections,
paragraphs, clauses, appendices, schedules and exhibits are to the same
contained in this Lease.
1.2 Interpretation.
The rules of usage set forth in Appendix A to the
Participation Agreement shall apply to this Lease.
ARTICLE II
2.1 Property.
Subject to the terms and conditions hereinafter set forth and
contained in the respective Lease Supplement relating to each Property, Lessor
hereby leases to each applicable Lessee and such Lessee hereby leases from
Lessor, each Property with respect to which such Lessee has executed a Lease
Supplement.
2.2 Lease Term.
The term of this Lease with respect to each Property (the
"Term") shall begin upon the earlier to occur of (a) the Completion Date for
such Property and (b) the date any Agency Agreement Event of Default shall occur
(in each case the "Commencement Date") and shall end on the fifth annual
anniversary of the Initial Closing Date, unless the Term is earlier terminated;
provided, this Lease shall be in full force and effect from and after the date
hereof, notwithstanding that the Term for any particular Property shall not
commence until the Commencement Date for such Property. Notwithstanding the
foregoing, no Lessee shall be obligated to pay Basic Rent until the Rent
Commencement Date with respect to such Property.
2.3 Title.
Each Property is leased to the Lessee that has executed a
Lease Supplement with respect to such Property without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the existing state of title (including without limitation
the Permitted Liens) and all applicable Legal Requirements. No Lessee shall in
any event have any recourse against Lessor for any defect in Lessor's title to
any Property or any interest of such Lessee therein other than for Lessor Liens.
2.4 Lease Supplements.
On or prior to the Property Closing Date for each Property,
each applicable Lessee and Lessor shall each execute and deliver a Lease
Supplement for the Property to be leased effective as of the Commencement Date
for such Property in substantially the form of Exhibit A hereto.
ARTICLE III
3.1 Rent.
(a) Each applicable Lessee shall pay Basic Rent in
arrears on each Payment Date, and on any date on which this Lease shall
terminate with respect to each Property with respect to which such
Lessee has executed a Lease Supplement during the Term; provided,
however, no Lessee shall have any obligation to pay Basic Rent with
respect to such Property until the Rent Commencement Date with respect
to such Property (notwithstanding that Basic Rent for such Property
shall accrue from and including the Scheduled Interest Payment Date
immediately preceding such Rent Commencement Date).
(b) Basic Rent shall be due and payable in lawful money
of the United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable
grace period) to such account or accounts at such bank or banks as
Lessor shall from time to time direct.
(c) The inability or failure of any Lessee to take
possession of all or any portion of any Property with respect to which
such Lessee has executed a Lease Supplement when delivered by Lessor,
whether or not attributable to any act or omission of Lessor, such
Lessee in its capacity as Construction Agent or as Lessee or any other
Person or for any other reason whatsoever, shall not delay or otherwise
affect such Lessee's obligation to pay Rent for such Property in
accordance with the terms of this Lease.
(d) Each applicable Lessee shall make all payments of
Rent allocable to such Lessee prior to 12:00 Noon, Charlotte, North
Carolina time, on the applicable date for payment of such amount.
3.2 Payment of Basic Rent.
Basic Rent shall be paid absolutely net to Lessor or its
designee, so that this Lease shall yield to Lessor the full amount thereof,
without setoff, deduction or reduction.
3.3 Supplemental Rent.
Each applicable Lessee shall pay to the Agent (on behalf of
the Person entitled thereto) any and all Supplemental Rent when and as the same
shall become due and payable, and if such Lessee fails to pay any Supplemental
Rent within three (3) days after the same is due, Lessor shall have all rights,
powers and remedies provided for herein or by law or equity or otherwise in the
case of nonpayment of Basic Rent. All such payments of Supplemental Rent shall
be in the full amount thereof, without setoff, deduction or reduction. Each
applicable Lessee shall pay to the appropriate Person, as Supplemental Rent due
and owing to such Person, among other things, on demand, (a) any and all payment
obligations (except for amounts payable as Basic Rent) owing from time to time
under the Operative Agreements by any Person to the Agent, any Lender, any
Holder or any other Person, (b) interest at the applicable Overdue Rate on any
installment of Basic Rent not paid when due (subject to the applicable grace
period) for the period for which the same shall be overdue and on any payment of
Supplemental Rent not paid when due or demanded by the appropriate Person
(subject to any applicable grace period) for the period from the due date or the
date of any such demand, as the case may be, until the same shall be paid and
(c) amounts referenced as Supplemental Rent obligations pursuant to Section 8.3
of the Participation Agreement. It shall be an additional Supplemental Rent
obligation of each applicable Lessee to pay to the appropriate Person all rent
and other amounts when such become due and owing from time to time under each
Ground Lease with respect to each Property subject to a Ground Lease and for
which such Lessee has executed a Lease Supplement and without the necessity of
any notice from Lessor with regard thereto. The expiration or other termination
of any Lessee's obligations to pay Basic Rent hereunder shall not limit or
modify the obligations of such Lessee with respect to Supplemental Rent. Unless
expressly provided otherwise in this Lease, in the event of any failure on the
part of any Lessee to pay and discharge any Supplemental Rent as and when due,
such Lessee shall also promptly pay and discharge any fine, penalty, interest or
cost which may be assessed or added for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4 Performance on a Non-Business Day.
If any Basic Rent is required hereunder on a day that is not a
Business Day, then such Basic Rent shall be due on the corresponding Scheduled
Interest Payment Date or, to the extent such Basic Rent is not due on a
Scheduled Interest Payment Date, then on the next succeeding Business Day. If
any Supplemental Rent is required hereunder on a day that is not a Business Day,
then such Supplemental Rent shall be due on the next succeeding Business Day.
3.5 Rent Payment Provisions.
Each applicable Lessee shall make payment of all Basic Rent
and Supplemental Rent when due (subject to the applicable grace periods)
regardless of whether any of the Operative Agreements pursuant to which same is
calculated and is owing shall have been rejected, avoided or disavowed in any
bankruptcy or insolvency proceeding involving any of the parties to any of the
Operative Agreements. Such provisions of such Operative Agreements and their
related definitions are incorporated herein by reference and shall survive any
termination, amendment or rejection of any such Operative Agreements.
ARTICLE IV
4.1 Taxes; Utility Charges.
From and after the Commencement Date for any Property, each
applicable Lessee shall pay or cause to be paid all Impositions with respect to
each Property with respect to which such Lessee has executed a Lease Supplement
and/or the use, occupancy, operation, repair, access, maintenance or operation
thereof and all charges for electricity, power, gas, oil, water, telephone,
sanitary sewer service and all other rents, utilities and operating expenses of
any kind or type used in or on any Property with respect to which such Lessee
has executed a Lease Supplement and related real property during the Term. Prior
to the Commencement Date for any Property, Lessor (at the direction of the
Agent) shall make the payments referenced in the foregoing sentence (but only to
the extent amounts are available therefor with respect to the Available
Commitments and the Available Holder Commitments or the Lenders and Holders
increase the amounts of Available Commitments and Available Holder Commitments,
respectively, to fund such costs). Upon Lessor's request, each applicable Lessee
shall provide from time to time Lessor with evidence of all such payments
referenced in the foregoing sentence. Each applicable Lessee shall be entitled
to receive any credit or refund with respect to any Imposition or utility charge
paid by such Lessee. Unless an Event of Default shall have occurred and be
continuing, the amount of any credit or refund received by Lessor on account of
any Imposition or utility charge paid by any Lessee, net of the costs and
expenses incurred by Lessor in obtaining such credit or refund, shall be
promptly paid over to such Lessee. All charges for Impositions or utilities
imposed with respect to any Property for a period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and such Lessee, and each party shall pay or reimburse the other for such
party's pro rata share thereof.
ARTICLE V
5.1 Quiet Enjoyment.
Subject to the rights of Lessor contained in Sections 17.2,
17.3 and 20.3 and the other terms of this Lease and the other Operative
Agreements and so long as no Event of Default shall have occurred and be
continuing, each applicable Lessee shall peaceably and quietly have, hold and
enjoy each Property with respect to which such Lessee has executed a Lease
Supplement for the applicable Term, free of any claim or other action by Lessor
or anyone rightfully claiming by, through or under Lessor (other than such
Lessee) with respect to any matters arising from and after the applicable
Commencement Date.
ARTICLE VI
6.1 Net Lease.
This Lease shall constitute a net lease, and the obligations
of each applicable Lessee hereunder are absolute and unconditional. Each
applicable Lessee shall pay all operating expenses arising out of the use,
operation and/or occupancy of each Property with respect to which such Lessee
has executed a Lease Supplement. Any present or future law to the contrary
notwithstanding, this Lease shall not terminate, nor shall any Lessee be
entitled to any abatement, suspension, deferment, reduction, setoff,
counterclaim, or defense with respect to the Rent, nor shall the obligations of
any Lessee hereunder be affected (except as expressly herein permitted and by
performance of the obligations in connection therewith) for any reason
whatsoever, including without limitation by reason of: (a) any damage to or
destruction of any Property or any part thereof; (b) any taking of any Property
or any part thereof or interest therein by Condemnation or otherwise; (c) any
prohibition, limitation, restriction or prevention of any Lessee's use,
occupancy or enjoyment of any Property or any part thereof, or any interference
with such use, occupancy or enjoyment by any Person or for any other reason; (d)
any title defect, Lien or any matter affecting title to any Property; (e) any
eviction by paramount title or otherwise; (f) any default by Lessor hereunder;
(g) any action for bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding relating to or affecting the Agent, any Lender,
Lessor, Lessee, any Holder or any Governmental Authority; (h) the impossibility
or illegality of performance by Lessor, any Lessee or all of them; (i) any
action of any Governmental Authority or any other Person; (j) any Lessee's
acquisition of ownership of all or part of any Property; (k) breach of any
warranty or representation with respect to any Property or any Operative
Agreement; (l) any defect in the condition, quality or fitness for use of any
Property or any part thereof; or (m) any other cause or circumstance whether
similar or dissimilar to the foregoing and whether or not any Lessee shall have
notice or knowledge of any of the foregoing. The parties intend that the
obligations of each applicable Lessee hereunder shall be covenants, agreements
and obligations that are separate and independent from any obligations of Lessor
hereunder and shall continue unaffected unless such covenants, agreements and
obligations shall have been modified or terminated in accordance with an express
provision of this Lease. Lessor and each Lessee acknowledge and agree that the
provisions of this Section 6.1 have been specifically reviewed and subject to
negotiation.
6.2 No Termination or Abatement.
Each applicable Lessee shall remain obligated under this Lease
in accordance with its terms and shall not take any action to terminate, rescind
or avoid this Lease, notwithstanding any action for bankruptcy, insolvency,
reorganization, liquidation, dissolution, or other proceeding affecting
any Person or any Governmental Authority, or any action with respect to this
Lease or any Operative Agreement which may be taken by any trustee, receiver or
liquidator of any Person or any Governmental Authority or by any court with
respect to any Person, or any Governmental Authority. Each Lessee hereby waives
all right (a) to terminate or surrender this Lease (except as permitted under
the terms of the Operative Agreements) or (b) to avail itself of any abatement,
suspension, deferment, reduction, setoff, counterclaim or defense with respect
to any Rent. Each Lessee shall remain obligated under this Lease in accordance
with its terms and each Lessee hereby waives any and all rights now or hereafter
conferred by statute or otherwise to modify or to avoid strict compliance with
its obligations under this Lease. Notwithstanding any such statute or otherwise,
each Lessee shall be bound by all of the terms and conditions contained in this
Lease.
ARTICLE VII
7.1 Ownership of the Properties.
(a) Lessor and each Lessee intend that (i) for
financial accounting purposes with respect to each Lessee (A) this
Lease will be treated as an "operating lease" pursuant to Statement of
Financial Accounting Standards No. 13, as amended, (B) Lessor will be
treated as the owner and lessor of each Property and (C) the Lessee
that has executed a Lease Supplement respecting a particular Property
will be treated as the lessee of such Property, but (ii) for federal
and all state and local income tax purposes and bankruptcy purposes (A)
this Lease will be treated as a financing arrangement and (B) the
Lessee that has executed a Lease Supplement respecting a particular
Property will be treated as the owner of such Property and will be
entitled to all tax benefits ordinarily available to owners of property
similar to such Property for such tax purposes. Notwithstanding the
foregoing, neither party hereto has made, or shall be deemed to have
made, any representation or warranty as to the availability of any of
the foregoing treatments under applicable accounting rules, tax,
bankruptcy, regulatory, commercial or real estate law or under any
other set of rules. The applicable Lessee shall claim the cost recovery
deductions associated with each Property, and Lessor shall not, to the
extent not prohibited by Law, take on its tax return a position
inconsistent with such Lessee's claim of such deductions.
(b) In order to secure the obligations of any Lessee
now existing or hereafter arising under any and all Operative
Agreements, each Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of all
Financing Parties, a first priority security interest (but subject to
the security interest in the assets granted by such Lessee in favor of
the Agent in accordance with the Security Documents) in and lien on all
right, title and interest of such Lessee (now owned or hereafter
acquired) in and to all Properties, to the extent such is personal
property and irrevocably grants and conveys a lien, deed of trust, deed
to secure debt and mortgage, as appropriate, on all right, title and
interest of such Lessee (now owned or hereafter acquired) in and to all
Properties to the extent such is real property. Lessor and each Lessee
further intend and agree that, for the purpose of securing the
obligations of any Lessee and/or any Construction Agent now existing or
hereafter arising under the Operative Agreements, (i) the Lease and
each Lease Supplement shall be a security agreement and financing
statement respecting each of the Properties and all proceeds (including
without limitation insurance proceeds thereof) to the extent such is
personal property and an irrevocable grant and conveyance of a lien,
deed of trust, deed to secure debt and mortgage, as appropriate, on
each of the Properties and all proceeds (including without limitation
insurance proceeds thereof) to the extent such is real property; (ii)
the acquisition of title (or to the extent applicable, a leasehold
interest pursuant to a Ground Lease) in each Property referenced in
Article II constitutes a grant by each Lessee to Lessor of a security
interest, lien, deed of trust, deed to secure debt and mortgage, as
appropriate, in all of such Lessee's right, title and interest in and
to each Property and all proceeds (including without limitation
insurance proceeds thereof) of the conversion, voluntary or
involuntary, of the foregoing into cash, investments, securities or
other property, whether in the form of cash, investments, securities or
other property, and an assignment of all rents, profits and income
produced by each Property; and (iii) notifications to Persons holding
such property, and acknowledgments, receipts or confirmations from
financial intermediaries, bankers or agents (as applicable) of any
Lessee shall be deemed to have been given for the purpose of perfecting
such lien, security interest, mortgage lien, grant of deed to secure
debt and deed of trust under applicable law. Each Lessee shall promptly
take such actions as Lessor may reasonably request (including without
limitation the filing of Uniform Commercial Code Financing Statements,
Uniform Commercial Code Fixture Filings and memoranda (or short forms)
of this Lease and the various Lease Supplements) to ensure that the
lien, security interest, mortgage lien, grant of deed to secure debt
and deed of trust in each Property and the other items referenced above
will be deemed to be a perfected lien, security interest, mortgage
lien, grant of deed to secure debt and deed of trust of first priority
under applicable law and will be maintained as such throughout the
Term.
ARTICLE VIII
8.1 Condition of the Properties.
EACH APPLICABLE LESSEE ACKNOWLEDGES AND AGREES THAT IT IS
LEASING EACH PROPERTY WITH RESPECT TO WHICH SUCH LESSEE HAS EXECUTED A LEASE
SUPPLEMENT "AS-IS WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH SUCH PROPERTY
FREE AND CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE EXISTING
STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF ANY),
(C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN ACCURATE
SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E) VIOLATIONS OF
LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE DATE OF THE
APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY
HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR
COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR SHALL KEEP EACH PROPERTY FREE
AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER
AS TO THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION,
MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY (OR ANY PART THEREOF), OR ANY
OTHER REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY PROPERTY (OR ANY PART THEREOF), AND NEITHER LESSOR NOR THE AGENT
NOR ANY LENDER NOR ANY HOLDER SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT
DEFECT THEREON OR THE FAILURE OF ANY PROPERTY, OR ANY PART THEREOF, TO COMPLY
WITH ANY LEGAL REQUIREMENT. EACH APPLICABLE LESSEE HAS OR PRIOR TO THE
COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO INSPECT EACH
PROPERTY WITH RESPECT TO WHICH SUCH LESSEE HAS EXECUTED A LEASE SUPPLEMENT AND
THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE (INSOFAR AS LESSOR, THE AGENT,
EACH LENDER AND EACH HOLDER ARE CONCERNED) SATISFIED WITH THE RESULTS OF ITS
INSPECTIONS AND IS ENTERING INTO THIS LEASE SOLELY ON THE BASIS OF THE RESULTS
OF ITS OWN INSPECTIONS, AND ALL RISKS INCIDENT TO THE MATTERS DESCRIBED IN THE
PRECEDING SENTENCE, AS BETWEEN LESSOR, THE AGENT, THE LENDERS AND THE HOLDERS,
ON THE ONE (1) HAND, AND SUCH LESSEE, ON THE OTHER HAND, ARE TO BE BORNE BY SUCH
LESSEE.
8.2 Possession and Use of the Properties.
(a) At all times during the Term with respect to each
Property, such Property shall be a Permitted Facility and shall be used
by the applicable Lessee in the ordinary course of its business. Each
applicable Lessee shall pay, or cause to be paid, all charges and costs
required in connection with the use of each Property with respect to
which such Lessee has executed a Lease Supplement as contemplated by
this Lease. No Lessee shall commit or permit any waste of the
Properties or any part thereof.
(b) The address of the applicable Lessee stated on the
signature page in each applicable Lease Supplement is the principal
place of business and chief executive office of such Lessee (as such
terms are used in Section 9-103(3) of the Uniform Commercial Code of
any applicable jurisdiction), and such Lessee will provide Lessor with
prior written notice of any change of location of its principal place
of business or chief executive office. Regarding a particular Property,
each Lease Supplement correctly identifies the initial location of the
related Equipment (if any) and Improvements (if any) and contains an
accurate legal description for the related parcel of Land or a copy of
the Ground Lease (if any). The Equipment and Improvements respecting
each particular Property will be located only at the location
identified in the applicable Lease Supplement.
(c) No Lessee will attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property in a manner that could give rise to the
assertion of any Lien on such item of Equipment by reason of such
attachment or the assertion of a claim that such item of Equipment has
become a fixture and is subject to a Lien in favor of a third party
that is prior to the Liens thereon created by the Operative Agreements.
(d) On the Property Closing Date for each Property,
Lessor and the applicable Lessee shall execute a Lease Supplement in
regard to such Property which shall contain an Equipment Schedule that
has a general description of the Equipment which shall comprise the
Property, an Improvement Schedule that has a general description of the
Improvements which shall comprise the Property and a legal description
of the Land to be leased hereunder (or in the case of any Property
subject to a Ground Lease to be subleased hereunder) as of the
Commencement Date for such Property. Each Property subject to a Ground
Lease shall be deemed to be ground subleased from Lessor to the
applicable Lessee as of the Commencement Date for such Property, and
such ground sublease shall be in effect until this Lease is terminated
or expires, in each case in accordance with the terms and provisions
hereof. Such Lessee shall satisfy and perform all obligations imposed
on Lessor under each Ground Lease. Simultaneously with the execution
and delivery of each Lease Supplement, such Equipment, Improvements,
Land, ground subleasehold interest, all additional Equipment and all
additional Improvements which are financed under the Operative
Agreements after the Commencement Date and the remainder of such
Property shall be deemed to have been accepted by such Lessee for all
purposes of this Lease and to be subject to this Lease.
(e) At all times from the Property Closing Date for
each Property and thereafter during the Term with respect to such
Property with respect to which a particular Lessee has executed a Lease
Supplement, such Lessee will comply with all obligations under and (to
the extent no Event of Default exists and provided that such exercise
will not impair the value, utility or remaining useful life of such
Property) shall be permitted to exercise all rights and remedies under,
all operation and easement agreements and related or similar agreements
applicable to such Property.
8.3 Integrated Properties.
On the Rent Commencement Date for each Property with respect
to which a particular Lessee has executed a Lease Supplement, such Lessee shall,
at its sole cost and expense, cause such Property and the applicable property
subject to a Ground Lease to constitute (and for the duration of the Term shall
continue to constitute) all of the equipment, facilities, rights, other personal
property and other real property necessary or appropriate to operate, utilize,
maintain and control a Permitted Facility in a commercially reasonable manner.
ARTICLE IX
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards.
Subject to the terms of Article XIII relating to permitted
contests, each applicable Lessee, at its sole cost and expense, shall (a) comply
with all applicable Legal Requirements (including without limitation all
Environmental Laws) and all Insurance Requirements relating to each Property
with respect to which such Lessee has executed a Lease Supplement, (b) procure,
maintain and comply with all licenses, permits, orders, approvals, consents and
other authorizations required for the acquisition, installation,
testing, use, development, construction, operation, maintenance, repair,
refurbishment and restoration of each Property with respect to which such Lessee
has executed a Lease Supplement, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of each Property with respect
to which such Lessee has executed a Lease Supplement, whether or not compliance
therewith shall require structural or extraordinary changes in any Property or
interfere with the use and enjoyment of any Property unless the failure to
procure, maintain and comply with such items identified in subparagraphs (b) and
(c), individually or in the aggregate, shall not and could not reasonably be
expected to have a Material Adverse Effect. At the expense of the applicable
Lessee, Lessor agrees to take such actions as may be reasonably requested by any
Lessee in connection with the compliance by such Lessee of its obligations under
this Section 9.1.
ARTICLE X
10.1 Maintenance and Repair; Return.
(a) Each Lessee, at its sole cost and expense, shall
maintain each Property with respect to which such Lessee has executed a
Lease Supplement in good condition, repair and working order (ordinary
wear and tear excepted) and in the repair and condition as when
originally delivered to such Lessee and make all necessary repairs
thereto and replacements thereof, of every kind and nature whatsoever,
whether interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to each such Property, such that each such Property is capable of being
immediately utilized by a third party and in compliance with standard
industry practice subject, however, to the provisions of Article XV
with respect to Casualty and Condemnation.
(b) No Lessee shall use or locate any component of any
Property outside of the Approved State therefor. No Lessee shall move
or relocate any component of any Property beyond the boundaries of the
Land (comprising part of such Property) described in the applicable
Lease Supplement, except for the temporary removal of Equipment and
other personal property for repair or replacement.
(c) If any component of any Property becomes worn out,
lost, destroyed, damaged beyond repair or otherwise permanently
rendered unfit for use, the applicable Lessee, at its own expense, will
within a reasonable time replace such component with a replacement
component which is free and clear of all Liens (other than Permitted
Liens) and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been maintained
and repaired in accordance with the requirements of this Lease). All
such replacement components which are added to any Property shall
immediately become the property of (and title thereto shall vest in)
Lessor and shall be deemed incorporated in such Property and subject to
the terms of this Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its
agents shall have the right to inspect each Property and all
maintenance records with respect thereto at any reasonable time during
normal business hours but shall not, in the absence of an Event of
Default, materially disrupt the business of any Lessee.
(e) The Lessees shall cause to be delivered to Lessor
(at Lessees' sole expense) one (1) or more additional Appraisals (or
reappraisals of Property) as Lessor may request if any one (1) of
Lessor, the Agent, the Trust Company, any Lender or any Holder is
required pursuant to any applicable Legal Requirement to obtain such
Appraisals (or reappraisals) and upon the occurrence of any Event of
Default.
(f) Lessor shall under no circumstances be required to
build any improvements or install any equipment on any Property, make
any repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and each Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any Property, or (ii)
make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenant,
condition or restriction at any time in effect.
(g) Each applicable Lessee shall, upon the expiration
or earlier termination of this Lease with respect to a Property with
respect to which such Lessee has executed a Lease Supplement, if such
Lessee shall not have exercised its Purchase Option with respect to
such Property and purchased such Property, surrender such Property (i)
to Lessor pursuant to the exercise of the applicable remedies upon the
occurrence of a Lease Event of Default or (ii) pursuant to the second
paragraph of Section 22.1(a) hereof, to Lessor or the third party
purchaser, as the case may be, subject to such Lessee's obligations
under this Lease (including without limitation the obligations of such
Lessee at the time of such surrender under Sections 9.1, 10.1(a)
through (f), 10.2, 11.1, 12.1, 22.1 and 23.1).
10.2 Environmental Inspection.
If any applicable Lessee has not given notice of exercise of
its Purchase Option on the Expiration Date pursuant to Section 20.1 or for
whatever reason such Lessee does not purchase a Property with respect to which
such Lessee has executed a Lease Supplement in accordance with the terms of this
Lease, then not more than one hundred eighty (180) days nor less than sixty (60)
days prior to the Expiration Date, such Lessee at its expense shall cause to be
delivered to Lessor a Phase I environmental site assessment with regard to such
Property recently prepared (no more than thirty (30) days prior to the date of
delivery) by an independent recognized professional reasonably acceptable to
Lessor, and in form, scope and content reasonably satisfactory to Lessor.
ARTICLE XI
11.1 Modifications.
(a) Each applicable Lessee at its sole cost and
expense, at any time and from time to time without the consent of
Lessor may make modifications, alterations, renovations, improvements
and additions to any Property with respect to which such Lessee has
executed a Lease Supplement or any part thereof and substitutions and
replacements therefor (collectively, "Modifications"), and each
applicable Lessee shall make any and all Modifications required to be
made pursuant to all Legal Requirements, Insurance Requirements and
manufacturer's specifications and standards; provided, that:
(i) no Modification shall materially impair the value, utility or
useful life of any Property from that which existed immediately prior
to such Modification; (ii) each Modification shall be done
expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is
in progress; (v) subject to the terms of Article XIII relating to
permitted contests, each applicable Lessee shall pay all costs and
expenses and discharge any Liens arising with respect to any
Modification; (vi) each Modification shall comply with the requirements
of this Lease (including without limitation Sections 8.2 and 10.1); and
(vii) no Improvement shall be demolished or otherwise rendered unfit
for use unless the applicable Lessee shall finance the proposed
replacement Modification outside of this lease facility; provided,
further, no Lessee shall make any Modification (unless required by any
Legal Requirement) to the extent any such Modification, individually or
in the aggregate, shall or could reasonably be expected to have a
Material Adverse Effect. All Modifications shall immediately and
without further action upon their incorporation into the applicable
Property (1) become property of Lessor, (2) be subject to this Lease
and (3) be titled in the name of Lessor. No Lessee shall remove or
attempt to remove any Modification from any Property. The Lessee that
has executed a Lease Supplement with respect to a particular Property,
at its own cost and expense, will pay for the repairs of any damage to
such Property caused by the removal or attempted removal of any
Modification.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
ARTICLE XII
12.1 Warranty of Title.
(a) Each applicable Lessee hereby acknowledges and
shall cause title in each Property with respect to which such Lessee
has executed a Lease Supplement (including without limitation all
Equipment, all Improvements, all replacement components to each such
Property and all Modifications) immediately and without further action
to vest in and become the property of Lessor and to be subject to the
terms of this Lease (provided, respecting each Property subject to a
Ground Lease, Lessor's interest therein is acknowledged to be a
leasehold interest pursuant to such Ground Lease) from and after the
date hereof or such date of incorporation into any Property. Each
applicable Lessee agrees that, subject to the terms of Article XIII
relating to permitted contests, such Lessee shall not directly or
indirectly create or allow to remain, and shall promptly discharge at
its sole cost and expense, any Lien, defect, attachment, levy, title
retention agreement or claim upon any Property with respect to which
such Lessee has executed a Lease Supplement, any component thereof or
any Modifications or any Lien, attachment, levy or claim with respect
to the Rent or with respect to any amounts held by Lessor, the Agent,
any Lender or any Holder pursuant to any Operative Agreement, other
than Permitted Liens. Each applicable Lessee shall promptly notify
Lessor in the event such Lessee receives actual knowledge that a Lien
other than a Permitted Lien has occurred with respect to a Property
with respect to which such Lessee has executed a Lease Supplement, the
Rent or any other such amounts, and each applicable Lessee represents
and warrants to, and covenants with, Lessor that the Liens in favor of
Lessor and/or the Agent created by the Operative Agreements are (and
until the Financing Parties under the Operative Agreements have been
paid in full shall remain), except to the extent expressly provided in
Section 8.10 of the Participation Agreement, first priority perfected
Liens subject only to Permitted Liens. At all times subsequent to the
Property Closing Date respecting a Property, each applicable Lessee
shall (i) cause a valid, perfected, first priority Lien on each
Property with respect to which such Lessee has executed a Lease
Supplement to be in place in favor of the Agent (for the benefit of the
Secured Parties) and (ii) file, or cause to be filed, all necessary
documents under the applicable real property law and Article 9 of the
Uniform Commercial Code to perfect such title and Liens.
(b) Nothing contained in this Lease shall be construed
as constituting the consent or request of Lessor, expressed or implied,
to or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER ANY
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
ARTICLE XIII
13.1 Permitted Contests Other Than in Respect of Indemnities.
Except to the extent otherwise provided for in Section 11 of
the Participation Agreement, each applicable Lessee, on its own or on Lessor's
behalf but at Lessee's sole cost and expense, may contest, by appropriate
administrative or judicial proceedings conducted in good faith and with due
diligence, the amount, validity or application, in whole or in part, of any
Legal Requirement, Imposition or utility charge payable pursuant to Section 4.1
or any Lien, attachment, levy, encumbrance or encroachment, and Lessor agrees
not to pay, settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
each Property with respect to which such Lessee has executed a Lease Supplement,
Lessor, each Holder, the Agent and each Lender; (b) there shall not be imposed a
Lien (other than Permitted Liens) on any such Property and no part of any such
Property nor any Rent would be in any danger of being sold, forfeited, lost or
deferred; (c) at no time during the permitted contest shall there be a risk of
the imposition of criminal liability or material civil liability on Lessor, any
Holder, the Agent or any Lender for failure to comply therewith; and (d) in the
event that, at any time, there shall be a material risk of extending the
application of such item beyond the end of the Term, then such Lessee shall
deliver to Lessor an Officer's Certificate certifying as to the matters set
forth in clauses (a), (b) and (c) of this Section 13.1. Lessor, at such Lessee's
sole cost and expense, shall execute and deliver to such Lessee such
authorizations and other documents as may reasonably be required in connection
with any such contest and, if reasonably requested by such Lessee, shall join as
a party therein at such Lessee's sole cost and expense.
13.2 Impositions, Utility Charges, Other Matters; Compliance with
Legal Requirements.
Except with respect to Impositions, Legal Requirements,
utility charges and such other matters referenced in Section 13.1 which are the
subject of ongoing proceedings contesting the same in a manner consistent with
the requirements of Section 13.1, each Lessee shall cause (a) all Impositions,
utility charges and such other matters to be timely paid, settled or
compromised, as appropriate, with respect to each Property with respect to which
such Lessee has executed a Lease Supplement and (b) each Property with respect
to which such Lessee has executed a Lease Supplement to comply with all
applicable Legal Requirements.
ARTICLE XIV
14.1 Public Liability and Workers' Compensation Insurance.
During the Term for each Property with respect to which such
Lessee has executed a Lease Supplement, such Lessee shall procure and carry, at
such Lessee's sole cost and expense, commercial general liability and umbrella
liability insurance for claims for injuries or death sustained by persons or
damage to property while on such Property or respecting the Equipment with
respect to such Property and such other public liability coverages as are then
customarily carried by similarly situated companies conducting business similar
to that conducted by such Lessee. Prior to the Commencement Date for any
Property, the Lessee that has executed a Lease Supplement respecting such
Property shall procure and carry all such insurance referenced in the
immediately preceding sentence, but Lessor (at the direction of the Agent) shall
pay the costs and expenses incurred respecting the insurance referenced in the
foregoing sentence (but only to the extent amounts are available therefor with
respect to the Available Commitments and the Available Holder Commitments or the
Lenders and Holders increase the amounts of Available Commitments and Available
Holder Commitments, respectively, to fund such costs and expenses). Such
insurance shall be on terms and in amounts that are no less favorable than
insurance maintained by such Lessee with respect to similar properties and
equipment that it owns and are then carried by similarly situated companies
conducting business similar to that conducted by such Lessee, and in no event
shall have a minimum combined single limit per occurrence coverage (i) for
commercial general liability of less than $1,000,000 and (ii) for umbrella
liability of $2,000,000. The policies shall name such Lessee as the insured and
shall be endorsed to name Lessor, the Holders, the Agent and the Lenders as
additional insureds. The policies shall also specifically provide that such
policies shall be considered primary insurance which shall apply to any loss or
claim before any contribution by any insurance which Lessor, any Holder, the
Agent or any Lender may have in force. In the operation of each Property with
respect to which such Lessee has executed a Lease Supplement, such Lessee shall
comply with applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 Permanent Hazard and Other Insurance.
(a) During the Term for each Property with respect to
which a particular Lessee has executed a Lease Supplement, such Lessee
shall keep such Property insured against all risk of physical loss or
damage by fire and other risks and shall maintain builders' risk
insurance during construction of any Improvements or Modifications in
each case (i) in amounts no less than the Property Cost of such
Property from time to time and (ii) on terms that (A) are no less
favorable than insurance covering other similar properties owned by
such Lessee and (B) are then carried by similarly situated companies
conducting business similar to that conducted by such Lessee. The
policies shall name such Lessee as the insured and shall be endorsed to
name Lessor and the Agent (on behalf of the Secured Parties) as a named
additional insured and loss payee; provided, so long as no Event of
Default exists, any loss payable under the insurance policies required
by this Section for losses up to $1,000,000 will be paid to Lessee.
Prior to the Commencement Date for any Property, the Lessee that has
executed a Lease Supplement with respect to such Property shall procure
and carry all such insurance referenced in this Section 14.2(a), but
Lessor (at the direction of the Agent) shall pay the costs and expenses
incurred respecting the insurance referenced in this Section 14.2(a)
(but only to the extent amounts are available therefor with respect to
the Available Commitments and the Available Holder Commitments or the
Lenders and Holders increase the amounts of Available Commitments and
Available Holder Commitments, respectively, to fund such costs and
expenses).
(b) If, during the Term with respect to a Property the
area in which such Property is located is designated a "flood-prone"
area pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto or is in a zone designated A or V,
then the applicable Lessee that has executed a Lease Supplement with
respect to such Property shall comply with the National Flood Insurance
Program as set forth in the Flood Disaster Protection Act of 1973. In
addition, such Lessee will fully comply with the requirements of the
National Flood Insurance Act of 1968 and the Flood Disaster Protection
Act of 1973, as each may be amended from time to time, and with any
other Legal Requirement, concerning flood insurance to the extent that
it applies to any such Property. During the Term, each applicable
Lessee shall, in the operation and use of each such Property, maintain
workers' compensation insurance consistent with that carried by
similarly situated companies conducting business similar to that
conducted by such Lessee and containing minimum liability limits of no
less than $100,000. In the operation of each Property with respect to
which a particular Lessee has executed a Lease Supplement, such Lessee
shall comply with workers' compensation laws applicable to such Lessee,
and protect Lessor, each Holder, the Agent and each Lender against any
liability under such laws. Prior to the Commencement Date for any
Property, the Lessee that has executed a Lease Supplement with respect
to such Property shall procure and carry all such insurance referenced
in this Section 14.2(b), but Lessor (at the direction of the Agent)
shall pay the costs and expenses incurred respecting the insurance
referenced in this Section 14.2(b) (but only to the extent amounts are
available therefor with respect to the Available Commitments and the
Available Holder Commitments or the Lenders and Holders increase the
amounts of Available Commitments and Available Holder Commitments,
respectively, to fund such costs and expenses).
14.3 Coverage.
(a) As of the date of this Lease and annually
thereafter during the Term, each Lessee shall furnish the Agent (on
behalf of Lessor and the other beneficiaries of such insurance
coverage) with certificates prepared by the insurers or insurance
broker of each such Lessee showing the insurance required under
Sections 14.1 and 14.2 to be in effect, naming (to the extent of their
respective interests) Lessor, the Holders, the Agent and the Lenders as
additional insureds and loss payees and evidencing the other
requirements of this Article XIV. All such insurance shall be at the
cost and expense of each Lessee with respect to such Properties for
which such Lessee has executed a Lease Supplement and provided by
nationally recognized, financially sound insurance companies having an
A+ or better rating by A.M. Best's Key Rating Guide. Each applicable
Lessee shall cause such certificates to include a provision for thirty
(30) days' advance written notice by the insurer to the Agent (on
behalf of Lessor and the other beneficiaries of such insurance
coverage) in the event of cancellation or material alteration of such
insurance. If an Event of Default has occurred and is continuing and
the Agent (on behalf of Lessor and the other beneficiaries of such
insurance coverage) so requests, each applicable Lessee shall deliver
to the Agent (on behalf of Lessor and the other beneficiaries of such
insurance coverage) copies of all insurance policies required by
Sections 14.1 and 14.2.
(b) Each applicable Lessee agrees that the insurance
policy or policies required by Sections 14.1, 14.2(a) and 14.2(b) shall
include an appropriate clause pursuant to which any such policy shall
provide that it will not be invalidated should such Lessee or any
Contractor, as the case may be, waive, at any time, any or all rights
of recovery against any party for losses covered by such policy or due
to any breach of warranty, fraud, action, inaction or misrepresentation
by such Lessee or any Person acting on behalf of such Lessee. Each
applicable Lessee hereby waives any and all such rights against Lessor,
the Holders, the Agent and the Lenders to the extent of payments made
to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate
insurance concurrent in kind or form or contributing in the event of
loss with any insurance required under this Article XIV, except that
Lessor may carry separate liability insurance at Lessor's sole cost so
long as (i) each Lessee's insurance is designated as primary and in no
event excess or contributory to any insurance Lessor may have in force
which would apply to a loss covered under any Lessee's policy and (ii)
each such insurance policy will not cause any Lessee's insurance
required under this Article XIV to be subject to a coinsurance
exception of any kind.
(d) Each Lessee shall pay as they become due all
premiums for the insurance required by Section 14.1 and Section 14.2
regarding each Property with respect to which such Lessee has executed
a Lease Supplement, shall renew or replace each policy prior to the
expiration date thereof or otherwise maintain the coverage required by
such Sections without any lapse in coverage.
ARTICLE XV
15.1 Casualty and Condemnation.
(a) Subject to the provisions of the Agency Agreement
and this Article XV and Article XVI (in the event any applicable Lessee
delivers, or is obligated to deliver or is deemed to have delivered, a
Termination Notice), and prior to the occurrence and continuation of a
Default or an Event of Default, such Lessee shall be entitled to
receive (and Lessor hereby irrevocably assigns to such Lessee all of
Lessor's right, title and interest in) any condemnation proceeds,
award, compensation or insurance proceeds under Sections 14.2(a) or
14.2(b) hereof to which such Lessee or Lessor may become entitled by
reason of their respective interests in a Property with respect to
which such Lessee and the Lessor have executed a Lease Supplement (i)
if all or a portion of such Property is damaged or destroyed in whole
or in part by a Casualty or (ii) if the use, access, occupancy,
easement rights or title to such Property or any part thereof is the
subject of a Condemnation; provided, however, if a Default or an Event
of Default shall have occurred and be continuing or if such award,
compensation or insurance proceeds shall exceed $1,000,000, then such
award, compensation or insurance proceeds shall be paid directly to
Lessor or, if received by such Lessee, shall be held in trust for
Lessor, and shall be paid over by such Lessee to Lessor and held in
accordance with the terms of this paragraph (a). All amounts held by
Lessor hereunder on account of any award, compensation or insurance
proceeds either paid directly to Lessor or turned over to Lessor shall
be deposited in a interest-bearing account and shall be held as
security for the performance of all Lessees' obligations hereunder and
under the other Operative Agreements and when all such obligations of
all Lessees with respect to such matters (and all other obligations of
all Lessees which should have been satisfied pursuant to the Operative
Agreements as of such date) have been satisfied, all amounts so held by
Lessor (including interest earned on such amounts) shall be paid over
to the applicable Lessee.
(b) Each applicable Lessee may appear in any proceeding
or action to negotiate, prosecute, adjust or appeal any claim for any
award, compensation or insurance payment on account of any such
Casualty or Condemnation and shall pay all expenses thereof. At such
Lessee's reasonable request, and at such Lessee's sole cost and
expense, Lessor and the Agent shall participate in any such proceeding,
action, negotiation, prosecution or adjustment. Lessor and each Lessee
agree that this Lease shall control the rights of Lessor and such
Lessee in and to any such award, compensation or insurance payment.
(c) If any Lessee shall receive notice of a Casualty or
a Condemnation of a Property or any interest therein where damage to
the affected Property is estimated to equal or exceed fifty percent
(50%) of the Property Cost of such Property, such Lessee shall give
notice thereof to Lessor promptly after such Lessee's receipt of such
notice. In the event such a Casualty or Condemnation occurs (regardless
of whether the applicable Lessee gives notice thereof), then such
Lessee shall be deemed to have delivered a Termination Notice to Lessor
and the provisions of Sections 16.1 and 16.2 shall apply.
(d) In the event of a Casualty or a Condemnation
(regardless of whether notice thereof must be given pursuant to
paragraph (c)), this Lease shall terminate with respect to the
applicable Property with respect to which any particular Lessee has
executed a Lease Supplement in accordance with Section 16.1 if such
Lessee, within thirty (30) days after such occurrence, delivers to
Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall
continue in full force and effect following a Casualty or Condemnation
with respect to the affected Property, the Lessee that has executed a
Lease Supplement with respect thereto shall, at its sole cost and
expense (subject to reimbursement in accordance with Section 15.1(a))
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built Plans and
Specifications or manufacturer's specifications for the applicable
Improvements, Equipment or other components of the applicable Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable Legal
Requirements), so as to restore the applicable Property to the same or
a greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied). In such event, title to the applicable Property shall
remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
any Lessee's obligations to pay Rent pursuant to Article III.
(g) Notwithstanding anything to the contrary set forth
in Section 15.1(a) or Section 15.1(e), if during the Term with respect
to a Property a Casualty occurs with respect to such Property or the
Lessee that has executed a Lease Supplement with respect thereto
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, the applicable Property cannot
reasonably be restored, repaired or replaced on or before the day one
hundred eighty (180) days prior to the Expiration Date or the date nine
(9) months after the occurrence of such Casualty or Condemnation (if
such Casualty or Condemnation occurs during the Term) to the same or a
greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied) or on or before such day such Property is not in fact so
restored, repaired or replaced, then such Lessee shall be required to
exercise its Purchase Option for such Property on the next Payment Date
(notwithstanding the limits on such exercise contained in Section 20.2)
and pay Lessor the Termination Value for such Property; provided, if
any Default or Event of Default has occurred and is continuing, such
Lessee shall also promptly (and in any event within three (3) Business
Days) pay Lessor any award, compensation or insurance proceeds received
on account of any Casualty or Condemnation with respect to any
Property; provided, further, that if no Default or Event of Default has
occurred and is continuing, any Excess Proceeds shall be paid to such
Lessee. If a Default or an Event of Default has occurred and is
continuing and any Loans, Holder Advances or other amounts are owing
with respect thereto, then any Excess Proceeds (to the extent of any
such Loans, Holder Advances or other amounts owing with respect
thereto) shall be paid to Lessor, held as security for the performance
of all Lessees' obligations hereunder and under the other Operative
Agreements and applied to such obligations upon the exercise of
remedies in connection with the occurrence of an Event of Default, with
the remainder of such Excess Proceeds in excess of such Loans, Holder
Advances and other amounts owing with respect thereto being distributed
to the applicable Lessee.
15.2 Environmental Matters.
Promptly upon any applicable Lessee's actual knowledge of the
presence of Hazardous Substances in any portion of any Property with respect to
which such Lessee has executed a Lease Supplement in concentrations and
conditions that constitute an Environmental Violation and which, in the
reasonable opinion of such Lessee, the cost to undertake any legally required
response, clean up, remedial or other action will or might result in a cost to
such Lessee of more than $50,000, such Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), such Lessee shall, not later than thirty
(30) days after such Lessee has actual knowledge of such Environmental
Violation, either deliver to Lessor a Termination Notice with respect to the
applicable Property or Properties pursuant to Section 16.1, if applicable, or,
at such Lessee's sole cost and expense, promptly and diligently undertake and
diligently complete any response, clean up, remedial or other action (including
without limitation the pursuit by such Lessee of appropriate action against any
off-site or third party source for contamination) necessary to remove, cleanup
or remediate the Environmental Violation in accordance with all Environmental
Laws. Any such undertaking shall be timely completed in accordance with prudent
industry standards. If such Lessee does not deliver a Termination Notice with
respect to such Property pursuant to Section 16.1, Lessee shall, upon completion
of remedial action by such Lessee, cause to be prepared by a reputable
environmental consultant acceptable to Lessor and the Agent a report describing
the Environmental Violation and the actions taken by such Lessee (or its agents)
in response to such Environmental Violation, and a statement by the consultant
that the Environmental Violation has been remedied in full compliance with
applicable Environmental Law. Not less than sixty (60) days and not more than
one hundred eighty (180) days prior to any time that such Lessee elects to cease
operations with respect to any Property or to remarket any Property pursuant to
Section 20.1 hereof or any other provision of any Operative Agreement, such
Lessee at its expense shall cause to be delivered to Lessor a Phase I
environmental site assessment respecting such Property recently prepared (no
more than thirty (30) days prior to the date of delivery) by an independent
recognized professional acceptable to Lessor in its reasonable discretion and in
form, scope and content satisfactory to Lessor in its reasonable discretion.
Notwithstanding any other provision of any Operative Agreement, if such Lessee
fails to comply with the foregoing obligation regarding the Phase I
environmental site assessment, such Lessee shall be obligated to purchase such
Property for its Termination Value and shall not be permitted to exercise (and
Lessor shall have no obligation to honor any such exercise) any rights under any
Operative Agreement regarding a sale of such Property to a Person other than
such Lessee or any Affiliate of such Lessee.
15.3 Notice of Environmental Matters.
Promptly, but in any event within five (5) Business Days from
the date any applicable Lessee has actual knowledge thereof, such Lessee shall
provide to Lessor written notice of any pending or threatened claim, action or
proceeding involving any Environmental Law or any Release on or in connection
with any Property with respect to which such Lessee has executed a Lease
Supplement. All such notices shall describe in reasonable detail the nature of
the claim, action or proceeding and such Lessee's proposed response thereto. In
addition, such Lessee shall provide to Lessor, within five (5) Business Days of
receipt, copies of all material written communications with any Governmental
Authority relating to any Environmental Law in connection with any Property with
respect to which such Lessee has executed a Lease Supplement. The applicable
Lessee shall also promptly provide such detailed reports of any such material
environmental claims as may reasonably be requested by Lessor or the Agent.
Actual knowledge of any Lessee shall be deemed actual knowledge of an officer of
such Lessee at the level of Vice President or above.
ARTICLE XVI
16.1 Termination Upon Certain Events.
If any Lessee has delivered, or is deemed to have delivered,
written notice of a termination of this Lease with respect to any Property with
respect to which such Lessee has executed a Lease Supplement to Lessor in the
form described in Section 16.2(a) (a "Termination Notice") pursuant to the
provisions of this Lease, then following the applicable Casualty, Condemnation
or Environmental Violation, this Lease shall terminate with respect to the
affected Property on the applicable Termination Date.
16.2 Procedures.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of the applicable Lessee to pay the
Termination Value for the applicable Property and purchase such
Property on such Termination Date.
(b) On each Termination Date, the applicable Lessee
shall pay to Lessor the Termination Value for the applicable Property,
and Lessor shall convey such Property or the remaining portion thereof,
if any, to such Lessee (or such Lessee's designee), all in accordance
with Section 20.2.
ARTICLE XVII
17.1 Lease Events of Default.
If any one (1) or more of the following events (each a "Lease
Event of Default") shall occur:
(a) Any Lessee shall fail to make payment of (i) any
Basic Rent regarding any Property with respect to which such Lessee has
executed a Lease Supplement (except as set forth in clause (ii)) within
three (3) Business Days after the same has become due and payable or
(ii) any Termination Value payable by such Lessee, on the date any such
payment is due and payable, or any payment of Basic Rent or
Supplemental Rent payable by such Lessee due on the due date of any
such payment of Termination Value, or any amount payable by such Lessee
due on the Expiration Date;
(b) Any Lessee shall fail to make payment of any
Supplemental Rent payable by such Lessee (other than Supplemental Rent
referred to in Section 17.1(a)(ii)) or any other Credit Party shall
fail to make any payment payable by such Credit Party of any amount
under any Operative Agreement which has become due and payable within
three (3) Business Days after receipt of notice that such payment is
due;
(c) [Reserved];
(d) (i) Any Credit Party shall fail to perform, comply
with or observe any term, covenant or agreement applicable to it
contained in Sections 5.4(a), 5.7(a) or 5.9 of the Lessee Credit
Agreement or in Article VI of the Lessee Credit Agreement (each of
which is incorporated herein by reference pursuant to Section 28.1), or
(ii) any Lessee shall fail to observe or perform any term, covenant,
obligation or condition of such Lessee under this Lease (including
without limitation the Incorporated Covenants) or any other Operative
Agreement to which such Lessee is a party other than those set forth in
Sections 17.1(a), (b), (c) or (d)(i) hereof, or any other Credit Party
shall fail to observe or perform any term, covenant, obligation or
condition of such Credit Party under any Operative Agreement other than
those set forth in Section 17.1(b) or (d)(i) hereof and in the event
such breach or failure to comply is capable of cure, is not cured
within thirty (30) days (or with respect to the Incorporated Covenants,
the grace period, if any, applicable thereto) of its occurrence, or
(iii) any representation or warranty made or deemed made by any Lessee
or any other Credit Party set forth in this Lease (including without
limitation the Incorporated Representations and Warranties) or in any
other Operative Agreement or in any document entered into in connection
herewith or therewith or in any document, certificate or financial or
other statement delivered in connection herewith or therewith shall be
incorrect, false or misleading in any respect on or as of the date made
or deemed made;
(e) An Agency Agreement Event of Default shall have
occurred and be continuing;
(f) DTS or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness (other than
Indebtedness arising under the ELLF Facility) in a principal amount
outstanding of at least $500,000 in the aggregate for DTS and any of
its Subsidiaries beyond the period of grace (not to exceed 30 days), if
any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any
Indebtedness in a principal amount outstanding of at least $500,000 in
the aggregate for DTS and its Subsidiaries or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries
of such Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated
maturity;
(g) (i) DTS or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for
it or for all or any substantial part of its assets, or DTS or any
Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against DTS or any
Subsidiary any case, proceeding or other action of a nature referred to
in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against DTS or any Subsidiary any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv)
DTS or any Subsidiary shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) DTS or any
Subsidiary shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due;
(h) [Reserved];
(i) [Reserved];
(j) The entering of any order in any proceedings
against any Credit Party or any Subsidiary of any Credit Party
decreeing the dissolution, divestiture or split-up of any Credit Party
or any Subsidiary of any Credit Party, and such order remains in effect
for more than sixty (60) days;
(k) Any report, certificate, financial statement or
other instrument delivered to Lessor by or on behalf of any Credit
Party pursuant to the terms of this Lease or any other Operative
Agreement is false or misleading in any respect when made or delivered;
(l) Any Lessee Credit Agreement Event of Default (other
than a Lessee Credit Agreement Event of Default under Section 7.1(i) of
the Lessee Credit Agreement or under Section 7.1(c) of the Lessee
Credit Agreement to the extent such Lessee Credit Agreement Event of
Default under Section 7.1(c) arises as a result of a breach of the
covenants set forth in Section 5.4(a) of the Lessee Credit Agreement or
Section 6.4 of the Lessee Credit Agreement) shall have occurred and be
continuing and shall not have been waived;
(m) One or more judgments or decrees shall be entered
against DTS or any of its Subsidiaries involving in the aggregate a
liability (to the extent not paid when due or covered by insurance) of
$2,000,000 or more and all such judgments or decrees shall not have
been paid and satisfied, vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof;
(n) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
(other than a Permitted Lien) shall arise on the assets of DTS, any of
its Subsidiaries or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable
Event or commencement of proceedings or appointment of a trustee is, in
the reasonable opinion of the Majority Secured Parties, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) DTS, any of its Subsidiaries or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Majority
Secured Parties is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could have a Material Adverse
Effect;
(o) A Change of Control shall occur and (y) a majority
of the Board of Directors of DTS has duly authorized and approved such
Change of Control or (z) prior to such Change of Control, a Poison Pill
was not enacted to prevent the same;
(p) Any Operative Agreement shall cease to be in full force
and effect;
(q) Except as to any Credit Party which is released in
connection with the Operative Agreements, the guaranty given by any
Guarantor under the Participation Agreement or any provision thereof
shall cease to be in full force and effect, or any Guarantor or any
Person acting by or on behalf of such Guarantor shall deny or disaffirm
such Guarantor's obligations under such guaranty, or any Guarantor
shall default in the due performance or observance of any term,
covenant or agreement on its part to be performed or observed pursuant
to any guaranty; or
(r) A reasonable basis shall exist for the assertion
against DTS or any of its Subsidiaries, or any predecessor in
interest of DTS or any of its Subsidiaries, of (or there shall have
been asserted against DTS or any of its Subsidiaries) an Environmental
Claim that, in the judgment of the Majority Secured Parties, is
reasonably likely to be determined adversely to DTS or any of its
Subsidiaries, and the amount thereof (either individually or in the
aggregate) is reasonably likely to have a Material Adverse Effect
(insofar as such amount is payable by DTS or any of its Subsidiaries
but after deducting any portion thereof that is reasonably expected to
be paid by other creditworthy Persons jointly and severally liable
therefor); then, in any such event, Lessor may, in addition to the
other rights and remedies provided for in this Article XVII and in
Section 18.1, terminate this Lease by giving each Lessee five (5) days
notice of such termination (provided, notwithstanding the foregoing,
this Lease shall be deemed to be automatically terminated without the
giving of notice upon the occurrence of a Lease Event of Default under
Sections 17.1(g)), and this Lease shall terminate, and all rights
of each Lessee under this Lease shall cease. Each Lessee shall, to the
fullest extent permitted by law, pay as Supplemental Rent all costs and
expenses incurred by or on behalf of Lessor or any other Financing
Party, including without limitation reasonable fees and expenses of
counsel, as a result of any Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LESSOR TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING TO
COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF DEFAULT.
17.2 Surrender of Possession.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, each Lessee shall, upon thirty (30) days' written notice,
surrender to Lessor possession of each Property with respect to which such
Lessee has executed a Lease Supplement. Lessor may enter upon and repossess the
Properties by such means as are available at law or in equity, and may remove
each applicable Lessee and all other Persons and any and all personal property
and each Lessee's equipment and personalty and severable Modifications from the
Properties. Lessor shall have no liability by reason of any such entry,
repossession or removal performed in accordance with applicable law. Upon the
written demand of Lessor, each Lessee shall return each Property with respect to
which such Lessee has executed a Lease Supplement promptly to Lessor, in the
manner and condition required by, and otherwise in accordance with the
provisions of, Section 22.1(c) hereof.
17.3 Reletting.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, Lessor may, but shall be under no obligation to, relet any or all
of the Properties, for the account of each applicable Lessee or otherwise, for
such term or terms (which may be greater or less than the period which would
otherwise have constituted the balance of the Term) and on such conditions
(which may include concessions or free rent) and for such purposes as Lessor may
determine, and Lessor may collect, receive and retain the rents resulting from
such reletting. Lessor shall not be liable to any Lessee for any failure to
relet any Property or for any failure to collect any rent due upon such
reletting.
17.4 Damages.
Neither (a) the termination of this Lease as to all or any of
the Properties pursuant to Section 17.1; (b) the repossession of all or any of
the Properties; nor (c) the failure of Lessor to relet all or any of the
Properties, the reletting of all or any portion thereof, nor the failure of
Lessor to collect or receive any rentals due upon any such reletting, shall
relieve any Lessee of its liabilities and obligations hereunder, all of which
shall survive any such termination, repossession or reletting. If any Lease
Event of Default shall have occurred and be continuing and notwithstanding any
termination of this Lease pursuant to Section 17.1, each Lessee shall forthwith
pay to Lessor all Rent and other sums due and payable hereunder by such Lessee
to and including without limitation the date of such termination. Thereafter, on
the days on which the Basic Rent or Supplemental Rent, as applicable, are
payable under this Lease or would have been payable under this Lease if the same
had not been terminated pursuant to Section 17.1 and until the end of the Term
hereof or what would have been the Term in the absence of such termination, each
applicable Lessee shall pay Lessor, as current liquidated damages (it being
agreed that it would be impossible accurately to determine actual damages) an
amount equal to the Basic Rent and Supplemental Rent that are payable by such
Lessee under this Lease or would have been payable by such Lessee hereunder if
this Lease had not been terminated pursuant to Section 17.1, less the net
proceeds, if any, which are actually received by Lessor with respect to the
period in question of any reletting of any Property with respect to which such
Lessee has executed a Lease Supplement or any portion thereof; provided, that
such Lessee's obligation to make payments of Basic Rent and Supplemental Rent
under this Section 17.4 shall continue only so long as Lessor shall not have
received the amounts specified in Section 17.6. In calculating the amount of
such net proceeds from reletting, there shall be deducted all of Lessor's, any
Holder's, the Agent's and any Lender's reasonable expenses in connection
therewith, including without limitation repossession costs, brokerage or sales
commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses incurred in preparation for such reletting. To the
extent Lessor receives any damages pursuant to this Section 17.4, such amounts
shall be regarded as amounts paid on account of Rent. Each Lessee specifically
acknowledges and agrees that its obligations under this Section 17.4 shall be
absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 Power of Sale.
Without limiting any other remedies set forth in this Lease,
Lessor and each Lessee agree that each Lessee has granted, pursuant to Section
7.1(b) hereof and each Lease Supplement, a Lien against each Property with
respect to which such Lessee has executed a Lease Supplement WITH POWER OF SALE,
and that, upon the occurrence and during the continuance of any Lease Event of
Default, Lessor shall have the power and authority, to the extent provided by
law, after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of the Properties.
17.6 Final Liquidated Damages.
If a Lease Event of Default shall have occurred and be
continuing, whether or not this Lease shall have been terminated pursuant to
Section 17.1 and whether or not Lessor shall have collected any current
liquidated damages pursuant to Section 17.4, Lessor shall have the right to
recover, by demand to each Lessee as to each Property for which such Lessee has
executed a Lease Supplement and at Lessor's election, and each Lessee shall pay
to Lessor, as and for final liquidated damages, but exclusive of the indemnities
payable under Section 11 of the Participation Agreement (which, if requested,
shall be paid concurrently), and in lieu of all current liquidated damages
beyond the date of such demand (it being agreed that it would be impossible
accurately to determine actual damages) the Termination Value with respect to
each Property for which such Lessee has executed a Lease Supplement. Upon
payment of the amount specified pursuant to the first sentence of this Section
17.6, each applicable Lessee shall be entitled to receive from Lessor, either at
such Lessee's request or upon Lessor's election, in either case at such Lessee's
cost, an assignment of Lessor's entire right, title and interest in and to the
applicable Properties, Improvements, Fixtures, Modifications, Equipment and all
components thereof, in each case in recordable form and otherwise in conformity
with local custom and free and clear of the Lien of this Lease (including
without limitation the release of any memoranda of Lease and/or the Lease
Supplement recorded in connection therewith) and any Lessor Liens. The
applicable Properties shall be conveyed to such Lessee "AS-IS, WHERE-IS" and in
their then present physical condition. If any statute or rule of law shall limit
the amount of such final liquidated damages to less than the amount agreed upon,
Lessor shall be entitled to the maximum amount allowable under such statute or
rule of law; provided, however, no Lessee shall be entitled to receive an
assignment of Lessor's interest in the Properties, the Improvements, Fixtures,
Modifications, Equipment or the components thereof unless each Lessee shall have
paid in full the Termination Value with respect to each Property for which such
Lessee has executed a Lease Supplement. Each Lessee specifically acknowledges
and agrees that its obligations under this Section 17.6 shall be absolute and
unconditional under any and all circumstances and shall be paid and/or
performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 Environmental Costs.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, each Lessee shall pay directly to any third party (or at Lessor's
election, reimburse Lessor) for the cost of any environmental testing and/or
remediation work undertaken respecting any Property with respect to which such
Lessee has executed a Lease Supplement, as such testing or work is deemed
appropriate in the reasonable judgment of Lessor, and shall indemnify and hold
harmless Lessor and each other Indemnified Person therefrom. Each Lessee shall
pay all amounts referenced in the immediately preceding sentence within ten (10)
days of any request by Lessor for such payment. The provisions of this Section
17.7 shall not limit the obligations of any Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 Waiver of Certain Rights.
If this Lease shall be terminated pursuant to Section 17.1,
each Lessee waives, to the fullest extent permitted by Law, (a) any right of
redemption, re-entry or possession; (b) the benefit of any laws now or hereafter
in force exempting property from liability for rent or for debt; and (c) any
other rights which might otherwise limit or modify any of Lessor's rights or
remedies under this Article XVII.
17.9 Assignment of Rights Under Contracts.
If a Lease Event of Default shall have occurred and be
continuing, and whether or not this Lease shall have been terminated pursuant to
Section 17.1, each Lessee shall upon Lessor's demand immediately assign,
transfer and set over to Lessor all of such Lessee's right, title and interest
in and to each agreement executed by such Lessee in connection with the
acquisition, installation, testing, use, development, construction,
operation, maintenance, repair, refurbishment and restoration of each Property
with respect to which such Lessee has executed a Lease Supplement (including
without limitation all right, title and interest of such Lessee with respect to
all warranty, performance, service and indemnity provisions), as and to the
extent that the same relate to the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of each Property with respect to which such Lessee has executed a
Lease Supplement.
17.10 Remedies Cumulative.
The remedies herein provided shall be cumulative and in
addition to (and not in limitation of) any other remedies available at law,
equity or otherwise, including without limitation any mortgage foreclosure
remedies.
ARTICLE XVIII
18.1 Lessor's Right to Cure Lessees' Lease Defaults.
Lessor, without waiving or releasing any obligation or Lease
Event of Default, may (but shall be under no obligation to) remedy any Lease
Event of Default for the account and at the sole cost and expense of each
applicable Lessee, including without limitation the failure by any Lessee to
maintain the insurance required by Article XIV, and may, to the fullest extent
permitted by law, and notwithstanding any right of quiet enjoyment in favor of
any Lessee, enter upon any Property, and take all such action thereon as may be
necessary or appropriate therefor. No such entry shall be deemed an eviction of
any Lessee. All out-of-pocket costs and expenses so incurred (including without
limitation fees and expenses of counsel), together with interest thereon at the
Overdue Rate from the date on which such sums or expenses are paid by Lessor,
shall be paid by the applicable Lessee to Lessor on demand.
ARTICLE XIX
19.1 Provisions Relating to Any Lessee's Exercise of its Purchase
Option.
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with any Lessee's exercise of its Purchase Option, upon the
date on which this Lease is to terminate with respect to any Property, and upon
tender by any Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as
applicable, Lessor shall execute and deliver to such Lessee (or to such Lessee's
designee) at such Lessee's cost and expense an assignment (by deed or other
appropriate instrument) of Lessor's entire interest in such Property, in each
case in recordable form and otherwise in conformity with local custom and free
and clear of any Lessor Liens attributable to Lessor but without any other
warranties (of title or otherwise) from Lessor. Such Property shall be conveyed
to such Lessee "AS-IS, "WHERE-IS" and in then present physical condition.
19.2 No Purchase or Termination With Respect to Less than All of a
Property.
No Lessee shall be entitled to exercise its Purchase Option or
the Sale Option separately with respect to a portion of any Property consisting
of Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease
but shall be required to exercise its Purchase Option or the Sale Option with
respect to an entire Property.
ARTICLE XX
20.1 Purchase Option or Sale Option-General Provisions.
Not less than one hundred eighty (180) days (or respecting the
Purchase Option only, not less than sixty (60) days) and no more than two
hundred forty (240) days prior to the Expiration Date or, respecting the
Purchase Option only, any Payment Date (such Expiration Date or, respecting the
Purchase Option only, any such Payment Date being hereinafter referred to as the
"Election Date"), the applicable Lessee respecting one or more Properties may
give Lessor irrevocable written notice (the "Election Notice") that such Lessee
is electing to exercise either (a) the option to purchase one or more Properties
on the applicable Election Date (the "Purchase Option") or (b) with respect to
an Election Notice given in connection with the Expiration Date only, the option
to remarket one or more of such Properties to a Person other than Lessee or any
Affiliate of Lessee and cause a sale of such Properties to occur on the
applicable Election Date pursuant to the terms of Section 22.1 (the "Sale
Option"). If the applicable Lessee does not give an Election Notice indicating
the Purchase Option or the Sale Option at least one hundred eighty (180) days
and not more than two hundred forty (240) days prior to the Expiration Date,
then the applicable Lessee shall be deemed to have elected for the Purchase
Option to apply with respect to all Properties for which the Lessee has executed
a Lease Supplement on the Expiration Date. If the applicable Lessee shall elect
(or be deemed to have elected) to exercise the Purchase Option for one or more
Properties then the applicable Lessee shall pay to Lessor on the date on which
such purchase is scheduled to occur an amount equal to the Termination Value for
the affected Property or Properties (which the parties do not intend to be a
"bargain" purchase price) and, upon receipt of such amounts and satisfaction of
such obligations, Lessor shall transfer to the applicable Lessee all of Lessor's
right, title and interest in and to such Property or Properties in accordance
with Section 20.2.
20.2 Lessee Purchase Option.
Provided, no Default or Event of Default shall have occurred
and be continuing (other than those that will be cured by the payment of the
Termination Value for one or more of the Properties) and provided, that the
Election Notice has been appropriately given specifying the Purchase Option, the
applicable Lessee shall purchase the Property or Properties identified (or
deemed to be identified) in the applicable Election Notice on the applicable
Election Date at a price equal to the Termination Value for such Property or
Properties (which the parties do not intend to be a "bargain" purchase price).
Subject to Section 19.2, in connection with any termination of
this Lease with respect to any Property pursuant to the terms of Section 16.2,
or in connection with a particular Lessee's exercise of its Purchase Option,
upon the date on which this Lease is to terminate with respect to one or more
Properties, and upon tender by Lessee of the amounts set forth in Section
16.2(b) or this Section 20.2, as applicable, Lessor shall execute, acknowledge
(where required) and deliver to such Lessee, at such Lessee's cost and expense,
each of the following: (a) a termination or assignment (as requested by the
applicable Lessee) of each applicable Ground Lease and special or limited
warranty Deeds conveying each affected Property (to the extent it is real
property not subject to a Ground Lease) to the applicable Lessee free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (b) a Bill of Sale conveying each affected Property (to the extent it is
personal property) to the applicable Lessee free and clear of the Lien of this
Lease, the Lien of the Credit Documents and any Lessor Liens; (c) any real
estate tax affidavit or other document required by law to be executed and filed
in order to record the applicable Deed and/or the applicable Ground Lease
termination; and (d) FIRPTA affidavits. All of the foregoing documentation must
be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to the applicable Lessee "AS-IS, WHERE-IS" and in
then present physical condition.
If any Property is the subject of remediation efforts
respecting Hazardous Substances at the applicable Election Date which could
materially and adversely impact the Fair Market Sales Value of such Property
(with materiality determined in Lessor's discretion), then the applicable Lessee
shall be obligated to purchase each such Property pursuant to Section 20.2.
On the applicable Election Date on which a particular Lessee
has elected to exercise its Purchase Option, such Lessee shall pay (or cause to
be paid) to Lessor, the Bank and all other parties, as appropriate, the sum of
all costs and expenses incurred by any such party in connection with the
election by such Lessee to exercise its Purchase Option and all Rent and all
other amounts then due and payable or accrued under this Lease and/or any other
Operative Agreement.
20.3 Third Party Sale Option.
(a) Provided, that (i) no Default or Event of Default
shall have occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, the applicable Lessee shall
undertake to cause a sale of the applicable Property or Properties on the
applicable Election Date (all as specified in the Election Notice), in
accordance with the provisions of Section 22.1 hereof. Such Election Date on
which a sale is required may be hereafter referred to as the "Sale Date".
(b) In the event a particular Lessee exercises the Sale
Option then, as soon as practicable and in all events not less than sixty (60)
days prior to the Sale Date, such Lessee at its expense shall cause to be
delivered to Lessor a Phase I environmental site assessment for each such
Property recently prepared (no more than thirty (30) days old prior to the Sale
Date) by an independent recognized professional reasonably acceptable to Lessor
and in form, scope and content reasonably satisfactory to Lessor. In the event
that Lessor shall not have received such environmental site assessment by the
date sixty (60) days prior to the Sale Date or in the event that such
environmental assessment shall reveal the existence of any material violation of
Environmental Laws, other material Environmental Violation or potential material
Environmental Violation (with materiality determined in each case by Lessor in
its reasonable discretion), then such Lessee on the Sale Date shall pay to
Lessor an amount equal to the Termination Value for the applicable Property or
Properties and any and all other amounts due and owing hereunder. Upon receipt
of such payment and all other amounts due under the Operative Agreements, Lessor
shall transfer to such Lessee all of Lessor's right, title and interest in and
to all the Properties in accordance with Section 19.1.
20.4 Appointment of Dollar Tree as Agent for the Lessees with
Respect to the Purchase Option or the Sale Option.
Each Lessee hereby appoints Dollar Tree to act as its agent,
and Dollar Tree hereby accepts such appointment, for the purpose of providing
the Election Notice pursuant to Section 20.1 on behalf of each of the Lessees.
ARTICLE XXI
21.1 [Intentionally Omitted].
ARTICLE XXII
22.1 Sale Procedure.
(a) During the Marketing Period, the Lessee that
has executed a Lease Supplement respecting one or more Properties for
which the Sale Option has been elected, on behalf of Lessor, shall
obtain bids for the cash purchase of such Property or Properties in
connection with a sale to one (1) or more third party purchasers to be
consummated on the Sale Date for the highest price available, shall
notify Lessor promptly of the name and address of each prospective
purchaser and the cash price which each prospective purchaser shall
have offered to pay for each such Property and shall provide Lessor
with such additional information about the bids and the bid
solicitation procedure as Lessor may reasonably request from time to
time. All such prospective purchasers must be Persons other than the
applicable Lessee or any Affiliate of the applicable Lessee.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject the bids for
any Property submitted by the applicable Lessee if such bids, in the
aggregate, are greater than or equal to the sum of the Limited Recourse
Amount for such Property plus Closing Costs related to the sale of such
Property, and represent bona fide offers from one (1) or more third
party purchasers. If the highest price which a prospective purchaser or
the prospective purchasers shall have offered to pay for a Property on
the Sale Date is less than the sum of the Limited Recourse Amount for
such Property plus Closing Costs related to the sale of such Property
or if such bids do not represent bona fide offers from one (1) or more
third parties or if there are no bids or if such Property is otherwise
not sold on the Sale Date, Lessor may elect to retain such Property by
giving the applicable Lessee prior written notice of Lessor's election
to retain the same, and promptly upon receipt of such notice, the
applicable Lessee shall surrender, or cause to be surrendered, each of
the Properties specified in such notice in accordance with the terms
and conditions of Section 10.1. Upon acceptance of any bid, Lessor
agrees, at the applicable Lessee's request, to execute a contract of
sale with respect to such sale, so long as the same is consistent with
the terms of this Article 22 and provides by its terms that it is
nonrecourse to Lessor.
Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph, the
applicable Lessee shall arrange for Lessor to sell each other Property
for which the Sale Option has been elected and a bid has been accepted
free and clear of the Lien of this Lease and any Lessor Liens
attributable to Lessor, without recourse or warranty (of title or
otherwise), for cash on the Sale Date to the purchaser or purchasers
offering the highest cash sales price, as identified by the applicable
Lessee or Lessor, as the case may be; provided, however, solely as to
Lessor or the Trust Company, in its individual capacity, any Lessor
Lien shall not constitute a Lessor Lien so long as Lessor or the Trust
Company, in its individual capacity, is diligently and in good faith
contesting, at the cost and expense of Lessor or the Trust Company, in
its individual capacity, such Lessor Lien by appropriate proceedings in
which event the applicable Sale Date, all without penalty or cost to
the applicable Lessee, shall be delayed for the period of such contest.
To effect such transfer and assignment, Lessor shall execute,
acknowledge (where required) and deliver to the appropriate purchaser
each of the following: (a) special or limited warranty Deeds conveying
each such Property (to the extent it is real property titled to Lessor)
and an assignment of the Ground Lease conveying the leasehold interest
of Lessor in each such Property (to the extent it is real property and
subject to a Ground Lease) to the appropriate purchaser free and clear
of the Lien of this Lease, the Lien of the Credit Documents and any
Lessor Liens; (b) a Bill of Sale conveying each such Property (to the
extent it is personal property) titled to Lessor to the appropriate
purchaser free and clear of the Lien of this Lease, the Lien of the
Credit Documents and any Lessor Liens; (c) any real estate tax
affidavit or other document required by law to be executed and filed in
order to record each Deed and/or each Ground Lease assignment; and (d)
FIRPTA affidavits, as appropriate. All of the foregoing
documentation must be in form and substance reasonably satisfactory to
Lessor. The applicable Lessee shall surrender the Properties so sold or
subject to such documents to each purchaser in the condition specified
in Section 10.1, or in such other condition as may be agreed between
the applicable Lessee and such purchaser. The applicable Lessee shall
not take or fail to take any action which would have the effect of
unreasonably discouraging bona fide third party bids for any Property.
In the event any Property for which the Sale Option has been elected
has not been sold by the Expiration Date, each applicable Lessee shall
continue to use its best efforts to market all remaining unsold
Properties.
(b) If any Property is sold on a Sale Date to a third
party purchaser in accordance with the terms of Section 22.1(a) and the
purchase price paid for such Property is less than the Property Cost
for such Property (hereinafter such difference shall be referred to as
the "Deficiency Balance"), then the Lessee that has executed a Lease
Supplement with respect to such Property hereby
unconditionally promises to pay to Lessor on the Sale Date the lesser
of (i) the Deficiency Balance, or (ii) the Maximum Residual Guarantee
Amount for such Property. On a Sale Date if Lessor receives any amount
in excess of the Termination Value for such Property from a third party
purchaser, then Lessor shall pay to the applicable Lessee any such
excess amounts. If one or more of the Properties are retained by Lessor
pursuant to an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a) or if any Property for which the Sale
Option has been elected is not sold on or prior to the Expiration Date,
then the Lessee that has executed a Lease Supplement with respect to
such Property hereby unconditionally promises to pay to Lessor on the
Sale Date an amount equal to the Maximum Residual Guarantee Amount for
each such Property so retained, together with any and all Rent and all
other amounts then due and owing by such Lessee to the Financing
Parties pursuant to the Operative Agreements. Each Lessee shall also
pay to the Bank, on the Expiration Date, such Lessee's pro rata share
of the Remarketing Fee (based on the ratio of the Property Cost
allocable to such retained Properties for which such Lessee has
executed a Lease Supplement to the aggregate Property Cost for all
Properties so retained). The failure to pay the Deficiency Balance or
the Maximum Residual Guarantee Amount, the Remarketing Fee or any such
other amounts referenced in this Section 22.1(b) shall constitute a
Lease Event of Default.
Upon the sale to a third party purchaser (which is not a
Subsidiary or Affiliate of any Credit Party) of any Property, provided
that the Deficiency Balance or Maximum Residual Guarantee Amount, the
Remarketing Fee and all such other amounts referenced in this Section
22.1(b) have been paid, the proceeds from the sale of such Property
will be applied in accordance with Section 22.2.
(c) In the event that any Property is either sold to
one (1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date the applicable Lessee shall provide Lessor or
such third party purchaser (unless otherwise agreed by such third party
purchaser) with (i) all permits, certificates of occupancy,
governmental licenses and authorizations necessary to use, operate,
repair, access and maintain each such Property for the purpose it is
being used by the applicable Lessee, and (ii) such manuals, permits,
easements, licenses, intellectual property, know-how, rights-of-way and
other rights and privileges in the nature of an easement as are
reasonably necessary or desirable in connection with the use,
operation, repair, access to or maintenance of each such Property for
its intended purpose or otherwise as Lessor or such third party
purchaser(s) shall reasonably request (and a royalty-free license or
similar agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to Lessor or such third party purchaser(s), as
applicable, and shall be fully assignable (including without limitation
both primary assignments and assignments given in the nature of
security) without payment of any fee, cost or other charge. The
applicable Lessee shall also execute any documentation requested by
Lessor or such third party purchaser(s), as applicable, evidencing the
continuation or assignment of each Ground Lease.
(d) Notwithstanding the foregoing provisions of this
Section 22.1 and the rights of each Lessee to remarket the Property or
Properties with respect to which such Lessee has executed a Lease
Supplement, Lessor and each other Financing Party at all times shall be
permitted, but shall be under no duty, to market the Properties and
solicit bids therefor.
22.2 Application of Proceeds of Sale.
Lessor shall apply the proceeds of sale of each Property sold
in the following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the
Agent or any other Financing Party, as the case may be) for the
payment of Closing Costs;
(b) SECOND, so long as the Credit Agreement is in
effect and any Loans or Holder Advances or any amount is owing to the
Financing Parties under any Operative Agreement, to the Agent to be
allocated in accordance with Section 8.7 of the Participation
Agreement; and
(c) THIRD, to the applicable Lessee.
22.3 Indemnity for Excessive Wear.
If the proceeds of the sale described in Section 22.1 with
respect to the Properties shall be less than the Limited Recourse Amount with
respect to the Properties, and at the time of such sale it shall have been
reasonably determined (pursuant to the Appraisal Procedure) that the Fair Market
Sales Value of the Properties shall have been impaired by greater than expected
wear and tear during the term of the Lease, each applicable Lessee shall pay to
Lessor within ten (10) days after receipt of Lessor's written statement (i) the
amount of such excess wear and tear determined by the Appraisal Procedure or
(ii) the amount of the Sale Proceeds Shortfall, whichever amount is less.
22.4 Appraisal Procedure.
For determining the Fair Market Sales Value of the Properties
or any other amount which may, pursuant to any provision of any Operative
Agreement, be determined by an appraisal procedure, Lessor and each applicable
Lessee shall use the following procedure (the "Appraisal Procedure"). Lessor and
each applicable Lessee shall endeavor to reach a mutual agreement as to such
amount for a period of ten (10) days from commencement of the Appraisal
Procedure under the applicable section of the Lease, and if they cannot agree
within ten (10) days, then two (2) qualified appraisers, one (1) chosen by such
Lessee and one (1) chosen by Lessor, shall mutually agree thereupon, but if
either party shall fail to choose an appraiser within twenty (20) days after
notice from the other party of the selection of its appraiser, then the
appraisal by such appointed appraiser shall be binding on such Lessee and
Lessor. If the two (2) appraisers cannot agree within twenty (20) days after
both shall have been appointed, then a third appraiser shall be selected by the
two (2) appraisers or, failing agreement as to such third appraiser within
thirty (30) days after both shall have been appointed, by the American
Arbitration Association. The decisions of the three (3) appraisers shall be
given within twenty (20) days of the appointment of the third appraiser and the
decision of the appraiser most different from the average of the other two (2)
shall be discarded and such average shall be binding on Lessor and such Lessee;
provided, that if the highest appraisal and the lowest appraisal are equidistant
from the third appraisal, the third appraisal shall be binding on Lessor and
such Lessee. The fees and expenses of the appraiser appointed by such Lessee
shall be paid by such Lessee; the fees and expenses of the appraiser appointed
by Lessor shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 11 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between such Lessee and
Lessor (such fees and expenses not being indemnified pursuant to Section 11 of
the Participation Agreement).
ARTICLE XXIII
23.1 Holding Over.
If any Lessee shall for any reason remain in possession of a
Property after the expiration or earlier termination of this Lease as to such
Property (unless such Property is conveyed to such Lessee), such possession
shall be as a tenancy at sufferance during which time such Lessee shall continue
to pay Supplemental Rent that would be payable by such Lessee hereunder were the
Lease then in full force and effect with respect to such Property and such
Lessee shall continue to pay Basic Rent allocable to such Lessee at the lesser
of the highest lawful rate and one hundred ten percent (110%) of the last
payment of Basic Rent due with respect to such Property prior to such expiration
or earlier termination of this Lease. Such Basic Rent shall be payable from time
to time upon demand by Lessor and such additional amount of Basic Rent shall be
applied by Lessor ratably to the Lenders and the Holders based on their relative
amounts of the then outstanding aggregate Property Cost for all Properties.
During any period of tenancy at sufferance, such Lessee shall, subject to the
second preceding sentence, be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to tenants at sufferance, to continue
their occupancy and use of such Property. Nothing contained in this Article
XXIII shall constitute the consent, express or implied, of Lessor to the holding
over of any Lessee after the expiration or earlier termination of this Lease as
to any Property (unless such Property is conveyed to such Lessee) and nothing
contained herein shall be read or construed as preventing Lessor from
maintaining a suit for possession of such Property or exercising any other
remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 Risk of Loss.
During the Term, unless any applicable Lessee shall not be in
actual possession of any Property in question solely by reason of Lessor's
exercise of its remedies of dispossession under Article XVII, the risk of loss
or decrease in the enjoyment and beneficial use of such Property as a result of
the damage or destruction thereof by fire, the elements, casualties, thefts,
riots, wars or otherwise is assumed by such Lessee, and Lessor shall in no event
be answerable or accountable therefor.
ARTICLE XXV
25.1 Assignment.
(a) No Lessee may assign this Lease or any of its
rights or obligations hereunder or with respect to any Property with
respect to which such Lessee has executed a Lease Supplement in whole
or in part to any Person without the prior written consent of the
Agent, the Lenders, the Holders and Lessor (except for any assignment
arising by operation of law as a result of a merger of such Lessee
permitted without consent under Section 6.4 of the Lessee Credit
Agreement).
(b) No assignment by any Lessee (referenced in this
Section 25.1 or otherwise) or other relinquishment of possession to any
Property with respect to which such Lessee has executed a Lease
Supplement shall in any way discharge or diminish any of the
obligations of such Lessee to Lessor hereunder and such Lessee shall
remain directly and primarily liable under the Operative Agreements as
to any rights or obligations assigned by such Lessee or regarding any
such Property in which rights or obligations have been assigned or
otherwise transferred.
25.2 Subleases.
(a) Promptly, but in any event within five (5) Business
Days, following the execution and delivery of any sublease permitted by
this Article XXV, Lessee shall notify Lessor of the execution of such
sublease. As of the date of each Lease Supplement, each Lessee that has
executed a Lease Supplement shall lease the respective Property
described in such Lease Supplement from Lessor, and any existing tenant
respecting such Property shall automatically be deemed to be a
subtenant of the applicable Lessee with respect to such Property and
not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor, (i) the Stockton Sublease shall be
permitted, and (ii) subject to the other provisions of this Section
25.2, any Lessee may sublet any Property or portion thereof to any
wholly-owned Subsidiary of such Lessee or DTS; provided, however, no
such sublease otherwise permitted under this Section 25.2(b)(ii) shall
be permitted with respect to the Property located in Stockton,
California and more particularly described in Lease Supplement No. 1
while the Stockton Sublease is in effect. Except as referenced in the
immediately preceding sentence, no other subleases shall be permitted
unless consented to in writing by Lessor. Except with respect to the
Stockton Sublease, all subleasing shall be done on market terms and
shall in no way diminish the fair market value or useful life of any
applicable Property.
(c) No sublease (referenced in this Section 25.2 or
otherwise) or other relinquishment of possession to any Property shall
in any way discharge or diminish any of any Lessee's obligations to
Lessor hereunder and each Lessee shall remain directly and primarily
liable under this Lease as to each Property with respect to which such
Lessee has executed a Lease Supplement, or portion thereof, so sublet.
The term of any such sublease shall not extend beyond the Term. Each
sublease shall be expressly subject and subordinate to this Lease.
ARTICLE XXVI
26.1 No Waiver.
No failure by Lessor or any Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXVII
27.1 Acceptance of Surrender.
No surrender to Lessor of this Lease or of all or any portion
of any Property or of any part of any thereof or of any interest therein shall
be valid or effective unless agreed to and accepted in writing by Lessor and no
act by Lessor or the Agent or any representative or agent of Lessor or the
Agent, other than a written acceptance, shall constitute an acceptance of any
such surrender.
27.2 No Merger of Title.
There shall be no merger of this Lease or of the leasehold
estate created hereby by reason of the fact that the same Person may acquire,
own or hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 Incorporation of Covenants.
Reference is made to the Lessee Credit Agreement and the
representations and warranties of the Credit Parties contained in Article III of
the Lessee Credit Agreement (hereinafter referred to as the "Incorporated
Representations and Warranties") and the covenants contained in Articles V and
VI of the Lessee Credit Agreement, exclusive of the covenants set forth in
Sections 5.4(a) and 6.4 of the Lessee Credit Agreement (hereinafter referred to
as the "Incorporated Covenants"). Lessee agrees with Lessor that the
Incorporated Representations and Warranties and the Incorporated Covenants (and
all other relevant provisions of the Lessee Credit Agreement related thereto,
including without limitation the defined terms contained in Section 1.1 thereof
which are used in the Incorporated Representations and Warranties and the
Incorporated Covenants, hereinafter referred to as the "Additional Incorporated
Terms") are hereby incorporated by reference into this Lease to the same extent
and with the same effect as if set forth fully herein and shall inure to the
benefit of Lessor, without giving effect to any waiver, amendment, modification
or replacement of the Lessee Credit Agreement or any term or provision of the
Incorporated Representations and Warranties or the Incorporated Covenants
occurring subsequent to the date of this Lease, except to the extent otherwise
specifically provided in the following provisions of this paragraph. In the
event a waiver is granted under the Lessee Credit Agreement or an amendment or
modification is executed with respect to the Lessee Credit Agreement, and such
waiver, amendment and/or modification affects the Incorporated
Representations and Warranties, the Incorporated Covenants or the Additional
Incorporated Terms, then such waiver, amendment or modification shall be
effective with respect to the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms as incorporated by
reference into this Lease only if consented to in writing by the Agent (acting
upon the direction of the Majority Secured Parties). In the event of any
replacement of the Lessee Credit Agreement with a similar credit facility (the
"New Facility") the representations and warranties, covenants and additional
terms contained in the New Facility which correspond to the representations and
warranties, covenants contained in Article III and Articles V and VI, exclusive
of the covenants set forth in Sections 5.4(a) and 6.4 of the Lessee Credit
Agreement, respectively, and such additional terms (each of the foregoing
contained in the Lessee Credit Agreement) shall become the Incorporated
Representations and Warranties, the Incorporated Covenants and the Additional
Incorporated Terms only if consented to in writing by the Agent (acting upon the
direction of the Majority Secured Parties) and, if such consent is not granted
or if the Lessee Credit Agreement is terminated and not replaced, then the
representations and warranties and covenants contained in Article III and
Articles V and VI, exclusive of the covenants set forth in Sections 5.4(a) and
6.4 of the Lessee Credit Agreement, respectively, and such additional terms
(each of the foregoing contained in the Lessee Credit Agreement (together with
any modifications or amendments approved in accordance with this paragraph))
shall continue to be the Incorporated Representations and Warranties, the
Incorporated Covenants and the Additional Incorporated Terms hereunder.
ARTICLE XXIX
29.1 Notices.
All notices required or permitted to be given under this Lease
shall be in writing and delivered as provided in the Participation Agreement.
ARTICLE XXX
30.1 Miscellaneous.
Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of any Lessee or Lessor
arising from events commencing prior to the expiration or earlier termination of
this Lease shall survive such expiration or earlier termination. If any
provision of this Lease shall be held to be unenforceable in any jurisdiction,
such unenforceability shall not affect the enforceability of any other provision
of this Lease and such jurisdiction or of such provision or of any other
provision hereof in any other jurisdiction.
30.2 Amendments and Modifications.
Neither this Lease nor any Lease Supplement may be amended,
waived, discharged or terminated except in accordance with the provisions of
Section 12.4 of the Participation Agreement.
30.3 Successors and Assigns.
All the terms and provisions of this Lease shall inure to the
benefit of the parties hereto and their respective successors and permitted
assigns.
30.4 Headings and Table of Contents.
The headings and table of contents in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
30.5 Counterparts.
This Lease may be executed in any number of counterparts, each
of which shall be an original, but all of which shall together constitute one
(1) and the same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW),
EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS
LOCATED ARE REQUIRED TO APPLY.
30.7 Calculation of Rent.
All calculation of Rent payable hereunder shall be computed
based on the actual number of days elapsed over a year of three hundred sixty
(360) days or, to the extent such Rent is based on the Prime Lending Rate, three
hundred sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
30.8 Memoranda of Lease and Lease Supplements.
This Lease shall not be recorded; provided, Lessor and each
applicable Lessee shall, subject to Section 8.10 of the Participation Agreement,
promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to Lessor) regarding
each Property with respect to which such Lessee has executed a Lease Supplement
promptly after the acquisition thereof in the local filing office with respect
thereto, in all cases at such Lessee's cost and expense, and as required under
applicable law to sufficiently evidence this Lease and any such Lease Supplement
in the applicable real estate filing records.
30.9 Allocations between the Lenders and the Holders.
Notwithstanding any other term or provision of this Lease to
the contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 Limitations on Recourse.
Notwithstanding anything contained in this Lease to the
contrary, each Lessee agrees to look solely to Lessor's estate and interest in
the Properties (and in no circumstance to the Agent, the Lenders, the Holders or
otherwise to Lessor) for the collection of any judgment requiring the payment of
money by Lessor in the event of liability by Lessor, and no other property or
assets of Lessor or any shareholder, owner or partner (direct or indirect) in or
of Lessor, or any director, officer, employee, beneficiary, Affiliate of any of
the foregoing shall be subject to levy, execution or other enforcement procedure
for the satisfaction of the remedies of any Lessee under or with respect to this
Lease, the relationship of Lessor and any Lessee hereunder or any Lessee's use
of the Properties or any other liability of Lessor to any Lessee. Nothing in
this Section shall be interpreted so as to limit the terms of Sections 6.1 or
6.2 or the provisions of Section 12.9 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO
THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY
COUNTERCLAIM THEREIN.
30.12 Exercise of Lessor Rights.
Each Lessee hereby acknowledges and agrees that the rights and
powers of Lessor under this Lease have been assigned to the Agent pursuant to
the terms of the Security Agreement and the other Operative Agreements. Lessor
and each Lessee hereby acknowledge and agree that (a) the Agent shall, in its
discretion, direct and/or act on behalf of Lessor pursuant to the provisions of
Sections 8.2(h) and 8.6 of the Participation Agreement, (b) all notices to be
given to Lessor shall be given to the Agent and (c) all notices to be given by
Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO
SUBMISSION TO JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY
REFERENCE HEREIN, MUTATIS MUTANDIS.
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND
CONTRACT IN STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN
EFFECT. TO THE EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER
CHARACTERIZED BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF
PRINCIPAL AND INTEREST THEREON, THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR
PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST."
ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF
THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW
EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY
EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF
THE MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED
FOR, CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO THE APPLICABLE LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE
EXTENT SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF
PAYMENTS DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS
EVIDENCED BY ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO
RECEIVE ANY INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND,
AND LESSOR DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE
EVENT OF SUCH DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO
THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND
SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL
OR EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.
[signature pages follow]
DTSD Realty Trust 1999-1
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
FIRST SECURITY BANK,
NATIONAL ASSOCIATION, as
Owner Trustee under the
DTSD Realty Trust 1999-1,
as Lessor
By: /s/ Val T. Orton
-----------------------------------------------------------
Name: Val T. Orton
---------------------------------------------------------
Title: Vice President
--------------------------------------------------------
[signature pages continue]
DOLLAR TREE DISTRIBUTION, INC., as a Lessee
By: /s/ Frederick C. Coble
-----------------------------------------------------------
Name: Frederick C. Coble
---------------------------------------------------------
Title: Senior Vice President
--------------------------------------------------------
[signature pages continue]
DT KEYSTONE DISTRIBUTION, R.L.L.L.P., as a Lessee, by
DT Keystone Management, Inc., its general partner
By: /s/ Frederick C. Coble
-----------------------------------------------------------
Name: Frederick C. Coble
---------------------------------------------------------
Title: Senior Vice President
--------------------------------------------------------
[signature pages continue]
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK, as the Agent
By: /s/ Evander S. Jones, Jr.
------------------------------------------------
Name: Evander S. Jones, Jr.
----------------------------------------------
Title: Vice President
---------------------------------------------
[signature pages end]