MASTER AGREEMENT
Dated as of January 13, 2000
among
DOLLAR TREE STORES, INC.,
as a Guarantor,
DOLLAR TREE DISTRIBUTION, INC. AND
CERTAIN OTHER SUBSIDIARIES OF
DOLLAR TREE STORES, INC.
THAT MAY HEREAFTER BECOME PARTY HERETO,
as Lessees
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders
and
CRESTAR BANK, as Agent
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; INTERPRETATION..................................2
ARTICLE II. ACQUISITION, CONSTRUCTION AND LEASE;
FUNDINGS; NATURE OF TRANSACTION..............................2
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease..............2
(a) Land...................................................2
(b) Building...............................................3
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs...........................................3
(a) Initial Funding and Payment of Purchase Price for
Land and Development Costs on Closing Date.............3
(b) Subsequent Fundings and Payments of Construction
Costs during Construction Term.........................4
(c) Aggregate Limits on Funded Amounts.....................4
(d) Notice, Time and Place of Fundings.....................4
(e) Lessee's Deemed Representation for Each Funding........5
(f) Not Joint Obligations..................................6
(g) Non-Pro Rata Fundings..................................6
(h) Commitment Fee.........................................6
SECTION 2.3 Funded Amounts and Interest and Yield Thereon................7
SECTION 2.4 Lessee Owner for Tax Purposes................................8
SECTION 2.5 Amounts Due Under Lease......................................8
ARTICLE III. CONDITIONS PRECEDENT; DOCUMENTS..............................9
SECTION 3.1 Conditions to the Obligations of the Funding Parties on
each Closing Date............................................9
(a) Documents.............................................10
(i) Deed and Purchase Agreement...................10
(ii) Lease Supplement..............................10
(iii) Mortgage or Deed of Trust and Assignment
of Lease and Rents............................10
(iv) Security Agreement and Assignment.............10
(v) Survey........................................11
(vi) Title and Title Insurance.....................11
(vii) Appraisal.....................................12
(viii) Environmental Audit and related Reliance
Letter........................................12
(ix) Evidence of Insurance.........................13
i
(x) UCC Financing Statement; Recording Fees;
Transfer Taxes................................13
(xi) Opinions......................................13
(xii) Good Standing Certificates....................14
(xiii) IDB Property..................................14
(b) Litigation............................................14
(c) Legality..............................................14
(d) No Events.............................................14
(e) Representations.......................................15
(f) Cutoff Date...........................................15
(g) Transaction Expenses..................................15
(h) Approval..............................................15
SECTION 3.2 Additional Conditions for the Initial Closing Date..........15
(i) Loan Agreement; Guaranty Agreement............15
(ii) Master Agreement..............................16
(iii) Construction Agency Agreement.................16
(iv) Lease.........................................16
(v) Lessee's Resolutions and Incumbency
Certificate, etc..............................16
(vi) Opinions of Counsel...........................17
(vii) Good Standing Certificate.....................17
(viii) Lessor's Consents and Incumbency
Certificate, etc..............................17
SECTION 3.3 Conditions to the Obligations of Lessee.....................17
(a) General Conditions....................................17
(b) Legality..............................................18
(c) Purchase Agreement; Ground Lease......................18
SECTION 3.4 Conditions to the Obligations of the Funding Parties on
each Funding Date...........................................18
(a) Funding Request.......................................18
(b) Condition Fulfilled...................................18
(c) Representations.......................................18
(d) No Bonded Stop Notice or Filed Mechanics Lien.........19
(e) Lease Supplement......................................19
SECTION 3.5 Completion Date Conditions..................................19
(a) Title Policy Endorsements; Architect's Certificate....19
(b) Construction Completion...............................20
(c) Construction Agent Certification......................20
SECTION 3.6 Addition of Lessees.........................................22
ARTICLE IV. REPRESENTATIONS.............................................22
SECTION 4.1 Representations of DTS and Lessees..........................22
SECTION 4.2 Survival of Representations and Effect of Fundings..........32
(a) Survival of Representations and Warranties............32
(b) Each Funding a Representation.........................32
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SECTION 4.3 Representations of the Lessor...............................33
(a) Securities Act........................................33
(b) Due Organization, etc.................................33
(c) Due Authorization; Enforceability, etc................33
(d) No Conflict...........................................33
(e) Litigation............................................34
(f) Lessor Liens..........................................34
(g) Employee Benefit Plans................................34
(h) General Partner.......................................34
(i) Financial Information.................................34
(j) No Offering...........................................35
(k) Investment Company....................................35
SECTION 4.4 Representations of each Lender..............................35
(a) Securities Act........................................35
(b) Employee Benefit Plans................................36
ARTICLE V. COVENANTS OF OBLIGORS AND THE LESSOR........................36
SECTION 5.1 Records and Accounts........................................36
SECTION 5.2 Financial Statements, Certificates and Information..........36
SECTION 5.3 Notices.....................................................38
(a) Defaults..............................................38
(b) Environmental Events..................................38
(c) Notice of Litigation and Judgments....................39
SECTION 5.4 Existence; Maintenance of Properties........................39
SECTION 5.5 Insurance...................................................39
SECTION 5.6 Taxes.......................................................40
SECTION 5.7 Inspection of Properties and Books..........................40
SECTION 5.8 Compliance with Laws, Contracts, Licenses, and
Permits.....................................................40
SECTION 5.9 ERISA Compliance............................................41
SECTION 5.10 Restrictions on Indebtedness................................41
SECTION 5.11 Restrictions on Liens, Etc..................................42
SECTION 5.12 Restrictions on Investments.................................44
SECTION 5.13 Merger, Consolidation.......................................44
SECTION 5.14 Sale and Leaseback..........................................44
SECTION 5.15 Compliance With Environmental Laws..........................45
SECTION 5.16 Distributions...............................................45
SECTION 5.17 Subsidiaries................................................45
SECTION 5.18 Fiscal Year.................................................45
SECTION 5.19 Loans and Advances..........................................45
SECTION 5.20 Transactions With Affiliates................................46
SECTION 5.21 Stock Ownership.............................................46
SECTION 5.22 Amendments to Organizational Documents......................46
SECTION 5.23 Financial Covenants of DTD..................................46
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SECTION 5.24 Tangible Net Worth..........................................46
SECTION 5.25 Funded Debt to EBITDA Ratio.................................47
SECTION 5.26 Operating Cash Flow to Debt Service Ratio...................47
SECTION 5.27 Maximum Capital Expenditures................................47
SECTION 5.28 Inventory Reliance..........................................48
SECTION 5.29 Current Ratio...............................................49
SECTION 5.30 Solvency....................................................49
SECTION 5.31 Use of Proceeds.............................................49
SECTION 5.32 Further Assurances..........................................49
SECTION 5.33 Additional Required Appraisals..............................49
SECTION 5.34 Lessor's Covenants..........................................50
ARTICLE VI. TRANSFERS BY LESSOR AND LENDERS.............................52
SECTION 6.1 Lessor Transfers............................................52
SECTION 6.2 Lender Transfers............................................52
ARTICLE VII. INDEMNIFICATION.............................................54
SECTION 7.1 General Indemnification.....................................54
SECTION 7.2 Environmental Indemnity.....................................57
SECTION 7.3 Proceedings in Respect of Claims............................59
SECTION 7.4 General Tax Indemnity.......................................61
(a) Tax Indemnity.........................................61
(b) Exclusions from General Tax Indemnity.................62
(c) Contests..............................................65
(d) Reimbursement for Tax Savings.........................67
(e) Payments..............................................68
(f) Reports...............................................68
(g) Verification..........................................69
SECTION 7.5 Increased Costs, etc........................................69
(a) Illegality............................................69
(b) Requirements of Law...................................70
(c) Capital Adequacy......................................71
(d) Taxes.................................................71
(e) Tax Forms.............................................72
(f) Breakage Costs........................................73
(g) Action of Affected Funding Parties....................74
SECTION 7.6 End of Term Indemnity.......................................75
ARTICLE VIII. MISCELLANEOUS...............................................76
SECTION 8.1 Survival of Agreements......................................76
SECTION 8.2 Notices.....................................................76
SECTION 8.3 Counterparts................................................77
SECTION 8.4 Amendments..................................................77
SECTION 8.5 Headings, etc...............................................78
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SECTION 8.6 Parties in Interest.........................................78
SECTION 8.7 GOVERNING LAW...............................................79
SECTION 8.8 Expenses....................................................79
SECTION 8.9 Severability................................................79
SECTION 8.10 Liabilities of the Funding Parties: Sharing of Payments.....79
SECTION 8.11 Submission to Jurisdiction; Waivers.........................81
SECTION 8.12 Liabilities of the Agent....................................81
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APPENDIX A Definitions and Interpretation
SCHEDULES
SCHEDULE 2.2 Commitments
SCHEDULE 4.1(g) Litigation
SCHEDULE 4.1(m) Contracts with Officers, Directors and Employees
SCHEDULE 4.1(p) Environmental Matters
SCHEDULE 4.1(q) Subsidiaries
SCHEDULE 4.1(r) Tradenames
SCHEDULE 5.5 Insurance
SCHEDULE 5.10 Indebtedness
SCHEDULE 5.11 Liens
SCHEDULE 5.12 Investments
SCHEDULE 5.19 Loans and Advances
SCHEDULE 8.2 Notice Addresses
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Assignment of Lease and Rents
EXHIBIT C Form of Security Agreement and Assignment
EXHIBIT D-1 Form of Mortgage
EXHIBIT D-2 Form of Deed of Trust
EXHIBIT E Form of Joinder Agreement
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G Forms of Opinions of Counsel
EXHIBIT H Form of Certification of Construction Completion
EXHIBIT I Form of Payment Date Notice
EXHIBIT J Form of Compliance Certificate
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MASTER AGREEMENT
THIS MASTER AGREEMENT, dated as of January 13, 2000 (as it may be
amended or modified from time to time in accordance with the provisions hereof,
this "Master Agreement"), is among DOLLAR TREE STORES, INC., a Virginia
corporation ("DTS" or "Guarantor"), DOLLAR TREE DISTRIBUTION, INC., a Virginia
corporation ("DTD"), and certain other Subsidiaries of DTS that may hereafter
become parties hereto as lessees pursuant to Section 3.6 (individually, together
with DTD in its capacity as a lessee, a "Lessee" and collectively the
"Lessees"), as Lessees, ATLANTIC FINANCIAL GROUP, LTD., a Texas limited
partnership (the "Lessor"), certain financial institutions parties hereto as
lenders (together with any other financial institution that becomes a party
hereto as a lender, collectively referred to as "Lenders" and individually as a
"Lender"), and CRESTAR BANK, a Virginia state bank, as agent for the Lenders (in
such capacity, the "Agent").
PRELIMINARY STATEMENT
In accordance with the terms and provisions of this Master Agreement,
the Lease, the Loan Agreement and the other Operative Documents, (i) the Lessor
contemplates acquiring Land and, in certain cases, the Buildings on such Land
identified by DTD from time to time, and leasing such Land and Buildings thereon
to a Lessee, (ii) DTD, as Construction Agent for the Lessor, wishes, in certain
instances, to construct Buildings on Land for the Lessor and, when completed,
the related Lessee wishes to lease such Buildings from the Lessor as part of the
Leased Properties under the Lease, (iii) DTD, as agent, wishes to obtain, and
the Lessor is willing to provide, funding for the acquisition of the Land and
Buildings, or, in certain instances, the construction of Buildings, and (iv) the
Lessor wishes to obtain, and Lenders are willing to provide, from time to time,
financing of a portion of the funding of the acquisition of the Land and
Buildings and, if applicable, the construction of the Buildings.
In consideration of the mutual agreements contained in this Master
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix A hereto
for all purposes hereof; and the rules of interpretation set forth in Appendix A
hereto shall apply to this Master Agreement.
ARTICLE II.
1
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease.
(a) Land. Subject to the terms and conditions of this Master
Agreement, with respect to each parcel of Land identified by DTD, on the related
Closing Date (i) the Lessor agrees to acquire such interest in the related Land,
and any Building thereon, from the applicable Seller as is transferred, sold,
assigned and conveyed to the Lessor pursuant to the applicable Purchase
Agreement or to lease such interest in the related Land, and any Building
thereon, from the applicable Ground Lessor as is leased to the Lessor pursuant
to the applicable Ground Lease, (ii) the Lessor hereby agrees to lease, or
sublease, as the case may be, such Land and any Building thereon to the related
Lessee pursuant to the Lease, and (iii) the related Lessee hereby agrees to
lease, or sublease, as the case may be, such Land, and any Building thereon,
from the Lessor pursuant to the Lease. With respect to each IDB Property, (i)
the applicable Authority may acquire such interest in the related Land from the
applicable Seller as is transferred, sold, assigned and conveyed to the
Authority pursuant to the applicable Purchase Agreement, (ii) the applicable
Authority will lease such Land to the Lessor pursuant to the related IDB Lease,
and (iii) the related Lessee hereby agrees to sublease such Land from the Lessor
pursuant to the Lease (it being understood that any reference in the Operative
Documents to the lease by a Lessee of an IDB Property shall be deemed to refer
to the sublease thereof pursuant to the Lease).
(b) Building. With respect to each parcel of Land on which a
Building is to be constructed, subject to the terms and conditions of this
Master Agreement, from and after the Closing Date relating to such Land (i) the
Construction Agent agrees, pursuant to the terms of the Construction Agency
Agreement, to construct and install the Building on such Land for the Lessor
prior to the Scheduled Construction Termination Date, (ii) the Lenders and the
Lessor agree to fund the costs of such construction and installation (and
interest and yield thereon), (iii) the Lessor shall lease, or sublease, as the
case may be, such Building as part of such Leased Property to the related Lessee
pursuant to the Lease, and (iv) the related Lessee shall lease, or sublease, as
the case may be, such Building from the Lessor pursuant to the Lease.
SECTION 2.2 Fundings of Purchase Price, Development Costs and
Construction Costs.
(a) Initial Funding and Payment of Purchase Price for Land and
Development Costs on Closing Date. Subject to the terms and conditions of this
Master Agreement, on the Closing Date for any Land, and any Building thereon,
each Lender shall make available to the Lessor its initial Loan with respect to
such Land, and any Building thereon, in an amount equal to the product of such
Lender's Commitment Percentage times the purchase price for such Land, and any
Building thereon, and the development, transaction and closing costs incurred by
the Construction Agent, as agent, through such Closing Date, which funds the
Lessor shall use, together with the Lessor's own funds in an amount equal to the
product of the Lessor's Commitment Percentage times the purchase price for the
related Land and any Building thereon,
2
and the development, transaction and closing costs incurred by the Construction
Agent, as agent, through such Closing Date, to purchase such Land, and any
Building thereon, from the applicable Seller pursuant to the applicable Purchase
Agreement or lease the Land and any Building thereon, from the applicable Ground
Lessor pursuant to the applicable Ground Lease, as the case may be, and to pay
to the Construction Agent the amount of such development, transaction and
closing costs, and the Lessor shall lease, or sublease, as the case may be, such
Land to the related Lessee pursuant to the Lease.
(b) Subsequent Fundings and Payments of Construction Costs
during Construction Term. Subject to the terms and conditions of this Master
Agreement, if a Building is to be constructed on Land, on each Funding Date
following the Closing Date for each such parcel of Land until the related
Construction Term Expiration Date, (i) each Lender shall make available to the
Lessor a Loan in an amount equal to the product of such Lender's Commitment
Percentage times the amount of Funding requested by the Construction Agent for
such Funding Date, which funds the Lessor hereby directs each Lender to pay over
to the Agent, for distribution to the Construction Agent, as set forth in
paragraph (d), and (ii) the Lessor shall pay over to the Agent, for distribution
to the Construction Agent, its own funds (which shall constitute a part of, and
an increase in, the Lessor's Invested Amount with respect to such Leased
Property) in an amount equal to the product of the Lessor's Commitment
Percentage times the amount of Funding requested by the Construction Agent for
such Funding Date.
(c) Aggregate Limits on Funded Amounts. The aggregate amount
that the Funding Parties shall be committed to provide as Funded Amounts under
this Master Agreement and the Loan Agreement shall not exceed (x) with respect
to each Leased Property the costs of purchase and construction of such Leased
Property and the related development, transaction, closing and financing costs,
or (y) $35,000,000 in the aggregate for all Leased Properties. The aggregate
amount that any Funding Party shall be committed to fund under this Master
Agreement and the Loan Agreement shall not exceed the lesser of (i) such Funding
Party's Commitment and (ii) such Funding Party's Commitment Percentage of the
aggregate Fundings requested under this Master Agreement.
(d) Notice, Time and Place of Fundings. With respect to each
Funding, a Lessee or the Construction Agent, as the case may be, shall give the
Lessor and the Agent an irrevocable prior telephone (followed within one
Business Day with written) or written notice not later than 11:00 a.m., Atlanta,
Georgia time, at least three Business Days prior to the proposed Closing Date or
other Funding Date, as the case may be, pursuant, in each case, to a Funding
Request in the form of Exhibit A (a "Funding Request"), specifying the Closing
Date or subsequent Funding Date, as the case may be, the amount of Funding
requested, whether such Funding shall be a LIBOR Advance or a Base Rate Advance
or a combination thereof and the Rent Period(s) therefor. All documents and
instruments required to be delivered on such Closing Date pursuant to this
Master Agreement shall be delivered at the offices of Xxxxx, Xxxxx & Xxxxx, 000
Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other location as may
be determined by the Lessor, the Construction Agent and the Agent. Each Funding
shall occur on a Business Day and shall be in an amount equal to $500,000 or an
integral multiple of $1,000 in
3
excess thereof. All remittances made by any Lender and the Lessor for any
Funding shall be made in immediately available funds by wire transfer to or, as
is directed by, the Construction Agent, with receipt by the Construction Agent
not later than 12:00 noon, Atlanta, Georgia time, on the applicable Funding
Date, upon satisfaction or waiver of the conditions precedent to such Funding
set forth in Section 3; such funds shall (1) in the case of the initial Funding
on a Closing Date, be used to pay the purchase price to the applicable Seller
for the related Land and any Building thereon and pay development, transaction
and closing costs related to such Land, and (2) in the case of each subsequent
Funding be paid to the Construction Agent, for the payment or reimbursement of
Construction costs incurred through such Funding Date and not previously paid or
reimbursed.
(e) Lessee's Deemed Representation for Each Funding. Each
Funding Request by a Lessee or the Construction Agent shall be deemed a
reaffirmation of each Lessee's indemnity obligations in favor of the Indemnitees
under the Operative Documents and a representation and warranty to the Lessor,
the Agent and the Lenders that on the proposed Closing Date or Funding Date, as
the case may be, (i) the amount of Funding requested represents amounts owing in
respect of the purchase price of the related Land, and any Building thereon, and
development, transaction and closing costs in respect of the Leased Property (in
the case of the initial Funding on a Closing Date) or amounts that are then due
to third parties in respect of the Construction, or amounts paid by the
Construction Agent to third parties or incurred by the Construction Agent as
overhead expenses in respect of the Construction for which the Construction
Agent has not previously been reimbursed by a Funding (in the case of any
Funding), (ii) no Event of Default or Potential Event of Default exists, and
(iii) the representations and warranties of the Guarantor, DTD and each other
Lessee set forth in Section 4.1 are true and correct in all material respects as
though made on and as of such Funding Date, except to the extent such
representations or warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(f) Not Joint Obligations. Notwithstanding anything to the
contrary set forth herein or in the other Operative Documents, each Lender's and
the Lessor's commitments shall be several, and not joint. In no event shall any
Funding Party be obligated to fund an amount in excess of such Funding Party's
Commitment Percentage of any Funding, or to fund amounts in the aggregate in
excess of such Funding Party's Commitment.
(g) Non-Pro Rata Fundings. Notwithstanding anything to the
contrary set forth in this Master Agreement, but subject to Section 2.2(f)
above, at the Agent's option, Fundings may be made by drawing on the Lessor's
Commitment until such Commitment is fully funded before drawing on the Lenders'
Commitments. In such event, when the Lessor's Commitment is fully funded, the
Lenders will fund, on a pro rata basis as among themselves, 100% of the amount
of the Fundings thereafter, provided that, in no event will the Lessor's
Invested Amount be less than 3.5% of the aggregate Funded Amounts.
4
(h) Commitment Fee. DTD shall pay to the Agent, for the
ratable benefit of each Funding Party based upon its Commitment Percentage of
the aggregate Commitments, a commitment fee (the "Commitment Fee") for the
period commencing on the date hereof to and including the Lease Termination Date
payable quarterly in arrears on each Quarterly Payment Date, and on the Lease
Termination Date in an amount equal to (i) the Commitment Fee Percentage, times
(ii) an amount equal to the aggregate Commitments, minus the aggregate Funded
Amounts on such day times (iii) 1/360 times (iv) the number of days from and
including the date hereof (in the case of the first Quarterly Payment Date) or
the immediately preceding Quarterly Payment Date (in the case of each other
Quarterly Payment Date) to, but excluding, such Quarterly Payment Date.
SECTION 2.3 Funded Amounts and Interest and Yield Thereon.
(a) The Lessor's Invested Amount for any Leased Property
outstanding from time to time shall accrue yield ("Yield") at the Lessor Rate,
computed using the actual number of days elapsed and a 360 day year. If all or a
portion of the principal amount of or yield on the Lessor's Invested Amounts
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall, without limiting the rights of the Lessor
under the Lease, to the maximum extent permitted by law, accrue yield at the
Overdue Rate, from the date of nonpayment until paid in full (both before and
after judgment).
(b) Each Lender's Funded Amount for any Leased Property
outstanding from time to time shall accrue interest as provided in the Loan
Agreement.
(c) During the Construction Term, in lieu of the payment of
accrued interest, on each Payment Date, each Lender's Funded Amount in respect
of a Construction Land Interest shall automatically be increased by the amount
of interest accrued and unpaid on the related Loans pursuant to the Loan
Agreement during the Rent Period ending immediately prior to such Payment Date
(except to the extent that at any time such increase would cause such Lender's
Funded Amount to exceed such Lender's Commitment, in which event the related
Lessee shall pay such excess amount to such Lender in immediately available
funds on such Payment Date). Similarly, in lieu of the payment of accrued Yield,
on each Payment Date, the Lessor's Invested Amount in respect of a Construction
Land Interest shall automatically be increased by the amount of Yield accrued on
the Lessor's Invested Amount in respect of such Leased Property during the Rent
Period ending immediately prior to such Payment Date (except to the extent that
at any time such increase would cause the Lessor's Invested Amount to exceed the
Lessor's Commitment, in which event the related Lessee shall pay such excess
amount to the Lessor in immediately available funds on such Payment Date). Such
increases in Funded Amounts shall occur without any disbursement of funds by the
Funding Parties.
(d) Three Business Days prior to the last day of each Rent
Period, DTD shall deliver (which delivery may be by facsimile) to the Lessor and
the Agent a notice substantially in the form of Exhibit I (each, a "Payment Date
Notice"), appropriately completed, specifying the allocation of the Funded
Amounts related to such Rent Period to LIBOR Advances and Base
5
Rate Advances and the Rent Periods therefor, provided that no such allocation to
LIBOR Advances shall be in an amount less than $1,000,000. Each such Payment
Date Notice shall be irrevocable. If no such notice is given, the Funded Amounts
shall be allocated to a LIBOR Advance with a Rent Period of three (3) months.
SECTION 2.4 Lessee Owner for Tax Purposes. With respect to each Leased
Property, it is the intent of the Lessees and the Funding Parties that for
federal, state and local tax purposes and bankruptcy law purposes the Lease
shall be treated as the repayment and security provisions of a loan by the
Lessor to the Lessees, and that the related Lessee shall be treated as the legal
and beneficial owner entitled to any and all benefits of ownership of such
Leased Property and all payments of Basic Rent during the Lease Term shall be
treated as payments of interest and principal. Nevertheless, each of DTD and
each Lessee acknowledges and agrees that neither the Agent, nor any Funding
Party, nor any other Person has made any representations or warranties
concerning the tax, financial, accounting or legal characteristics or treatment
of the Operative Documents and that each of DTD and each Lessee has obtained and
relied solely upon the advice of its own tax, accounting and legal advisors
concerning the Operative Documents and the accounting, tax, financial and legal
consequences of the transactions contemplated therein.
SECTION 2.5 Amounts Due Under Lease. With respect to each Leased
Property, anything else herein or elsewhere to the contrary notwithstanding, it
is the intention of the Lessees and the Funding Parties that: (i) subject to
clauses (ii) and (iii) below, the amount and timing of Basic Rent due and
payable from time to time from the related Lessee under the Lease shall be equal
to the aggregate payments due and payable with respect to interest on the Loans
in respect of such Leased Property and Yield on the Lessor's Invested Amounts in
respect of such Leased Property on each Payment Date; (ii) if the related Lessee
elects the Purchase Option with respect to a Leased Property or becomes
obligated to purchase such Leased Property under the Lease, the Funded Amounts
in respect of such Leased Property, all interest and Yield thereon and all other
obligations of the related Lessee owing to the Funding Parties in respect of
such Leased Property shall be paid in full by such Lessee, (iii) if the Lessees
properly elect the Remarketing Option, the Lessees will only be required to pay
the Recourse Deficiency Amount and the other amounts required to be paid
pursuant to Section 14.6 of the Lease, which amounts shall be used to pay the
principal of the A Loans, and the Lessees shall only be required to pay to the
Lenders the principal amount of the B Loans and to the Lessor the Lessor's
Invested Amounts, to the extent of the proceeds of the sale of the Leased
Properties in accordance with Section 14.6 of the Lease; and (iv) upon an Event
of Default resulting in an acceleration of the Lessees' obligation to purchase
the Leased Properties under the Lease, the amounts then due and payable by the
Lessees under the Lease shall include all amounts necessary to pay in full the
Loans, and accrued interest thereon, the Lessor's Invested Amounts and accrued
Yield thereon and all other obligations of the Lessees owing to the Funding
Parties pursuant to the Operative Documents.
6
ARTICLE III.
CONDITIONS PRECEDENT; DOCUMENTS
SECTION 3.1 Conditions to the Obligations of the Funding Parties on
each Closing Date. The obligations of the Lessor and each Lender to carry out
their respective obligations under Section 2 of this Master Agreement to be
performed on the Closing Date with respect to any Land and any Building thereon
shall be subject to the fulfillment to the satisfaction of, or waiver by, each
such party hereto (acting directly or through its counsel) on or prior to such
Closing Date of the following conditions precedent, provided that the
obligations of any Funding Party shall not be subject to any conditions
contained in this Section 3.1 which are required to be performed by such Funding
Party:
(a) Documents. The following documents shall have been
executed and delivered by the respective parties thereto:
(i) Deed and Purchase Agreement. The related original
Deed duly executed by the applicable Seller and in recordable
form, and copies of the related Purchase Agreement, assigned
to the Lessor, shall each have been delivered to the Agent by
DTD or the related Lessee, with copies thereof to each other
Funding Party or the related Ground Lease, duly assigned to
the Lessor, shall have been delivered to the Agent, with
copies thereof to each other Funding Party, as applicable (it
being understood, that each Purchase Agreement and each Ground
Lease shall be reasonably satisfactory in form and substance
to the Lessor and the Lenders).
(ii) Lease Supplement. The original of the related
Lease Supplement, duly executed by the related Lessee and the
Lessor and in recordable form, shall have been delivered to
the Agent by such Lessee.
(iii) Mortgage or Deed of Trust and Assignment of
Lease and Rents. Counterparts of the Mortgage or Deed of
Trust, as the case may be, (substantially in the form of
Exhibit D-1 or D-2, as the case may be, attached hereto), duly
executed by the Lessor and in recordable form, shall have been
delivered to the Agent (which Mortgage or Deed of Trust, as
the case may be, shall secure all of the debt to the Agent
unless such mortgage is subject to a tax based on the amount
of indebtedness secured thereby, in which case the amount
secured will be limited to debt in an amount equal to 125% of
the projected cost of acquisition and construction of such
Leased Property); and the Assignment of Lease and Rents
(substantially in the form of Exhibit B attached hereto) in
recordable form, duly executed by the Lessor, shall have been
delivered to the Agent by the Lessor.
(iv) Security Agreement and Assignment. If Buildings
are to be constructed on the Land, counterparts of the
Security Agreement and Assignment (substantially in the form
of Exhibit C attached hereto), duly executed by the
7
Construction Agent, with an acknowledgment and consent thereto
satisfactory to the Lessor and the Agent duly executed by the
related General Contractor and the related Architect, as
applicable, and complete copies of the related Construction
Contract and the related Architect's Agreement certified by
the Construction Agent, shall have been delivered to the
Lessor and the Agent (it being understood and agreed that if
no related Construction Contract or Architect's Agreement
exists on such Closing Date, such delivery shall not be a
condition precedent to the Funding on such Closing Date, and
in lieu thereof the Construction Agent shall deliver complete
copies of such Security Agreement and Assignment and consents
concurrently with the Construction Agent's entering into such
contracts).
(v) Survey. The related Lessee shall have delivered,
or shall have caused to be delivered, to the Lessor and the
Agent, at such Lessee's expense, an accurate survey certified
to the Lessor and the Agent in a form reasonably satisfactory
to the Lessor and the Agent and showing no state of facts
unsatisfactory to the Lessor or the Agent and prepared within
ninety (90) days of such Closing Date (or such other time
period agreed to by the Lessor and the Agent) by a Person
reasonably satisfactory to the Lessor and the Agent. Such
survey shall (1) be acceptable to the Title Insurance Company
for the purpose of providing extended coverage to the Lessor
and a lender's comprehensive endorsement to the Agent, (2)
show no encroachments on such Land by structures owned by
others, and no encroachments from any part of such Leased
Property onto any land owned by others, and (3) disclose no
state of facts reasonably objectionable to the Lessor, the
Agent or the Title Insurance Company, and be reasonably
acceptable to each such Person.
(vi) Title and Title Insurance. On such Closing Date,
the Lessor shall receive from a title insurance company
acceptable to the Lessor and the Agent an ALTA Owner's Policy
of Title Insurance issued by such title insurance company and
the Agent shall receive from such title insurance company an
ALTA Mortgagee's Policy of Title Insurance issued by such
title insurance company, in each case, in the amount of the
projected cost of acquisition and construction of such Leased
Property, reasonably acceptable in form and substance to the
Lessor and the Agent, respectively (collectively, the "Title
Policy"). The Title Policy shall be dated as of such Closing
Date, and, to the extent permitted under Applicable Law, shall
include such affirmative endorsements as the Lessor or the
Agent shall reasonably request.
(vii) Appraisal. Each Funding Party shall have
received a report of the Appraiser (an "Appraisal"), paid for
by DTD or the related Lessee, which shall meet the
requirements of the Financial Institutions Reform, Recovery
and Enforcement Act of 1989, shall be satisfactory to such
Funding Party and shall state in a manner satisfactory to such
Funding Party the estimated "as vacant" value of such Land and
existing Buildings or any Building to be constructed
8
thereon. Such Appraisal must show that the "as vacant" value
of such Leased Property (if a Building is to be constructed on
the Land, determined as if the Building had already been
completed in accordance with the related Plans and
Specifications and by excluding from such value the amount of
assessments on such Leased Property) is at least 45% of the
total cost of such Leased Property.
(viii) Environmental Audit and related Reliance
Letter. The Lessor and the Agent shall have received an
Environmental Audit for such Leased Property, which shall be
conducted in accordance with ASTM standards and shall not
include a recommendation for further investigation and is
otherwise satisfactory to the Lessor and the Agent; and the
firm that prepared the Environmental Audit for such Leased
Property shall have delivered to the Lessor and the Agent a
letter stating that the Lessor, the Agent and the Lenders may
rely upon such firm's Environmental Audit of such Land, it
being understood that the Lessor's and the Agent's acceptance
of any such Environmental Audit shall not release or impair
any Lessee's obligations under the Operative Documents with
respect to any environmental liabilities relating to such
Leased Property.
(ix) Evidence of Insurance. The Lessor and the Agent
shall have received from the related Lessee certificates of
insurance evidencing compliance with the provisions of Article
VIII of the Lease (including the naming of the Lessor, the
Agent and the Lenders as additional insured or loss payee with
respect to such insurance, as their interests may appear), in
form and substance reasonably satisfactory to the Lessor and
the Agent.
(x) UCC Financing Statement; Recording Fees; Transfer
Taxes. Each Funding Party shall have received satisfactory
evidence of (i) the execution and delivery to Agent of a UCC-1
and, if required by applicable law, UCC-2 financing statement
to be filed with the Secretary of State of the applicable
State (or other appropriate filing office) and the county
where the related Land is located, respectively, and such
other Uniform Commercial Code financing statements as any
Funding Party deems necessary or desirable in order to perfect
such Funding Party's interests and (ii) the payment of all
recording and filing fees and taxes with respect to any
recordings or filings made of the related Deed, the Lease, the
related Lease Supplement, the related Mortgage and the related
Assignment of Lease and Rents.
(xi) Opinions. An opinion of local counsel for the
related Lessee qualified in the jurisdiction in which such
Leased Property is located, substantially in the form set
forth in Exhibit G-2 attached hereto, and containing such
other matters as the parties to whom they are addressed shall
reasonably request, shall have been delivered and addressed to
each of the Lessor, the Agent and the Lenders. To the extent
requested by the Agent, opinions supplemental to those
delivered under
9
Section 3.2(vi) and reasonably satisfactory to the Agent shall
have been delivered and addressed to each of the Lessor, the
Agent and the Lenders.
(xii) Good Standing Certificates. The Agent shall
have received good standing certificates for the Lessor and
the related Lessee from the appropriate offices of the state
where the related Land is located.
(xiii) IDB Property. If such Leased Property is an
IDB Property or is otherwise subject to industrial development
or revenue bonds, the IDB Documentation shall have been
executed by the parties thereto, and shall be in form and
substance reasonably acceptable to the Agent, the Lessor and
the Lenders.
(b) Litigation. No action or proceeding shall have been
instituted or, to the knowledge of any Funding Party, threatened nor shall any
governmental action, suit, proceeding or investigation be instituted or
threatened before any Governmental Authority, nor shall any order, judgment or
decree have been issued or proposed to be issued by any Governmental Authority,
to set aside, restrain, enjoin or prevent the performance of this Master
Agreement or any transaction contemplated hereby or by any other Operative
Document or which is reasonably likely to materially adversely affect any Leased
Property or any transaction contemplated by the Operative Documents or which
would reasonably be expected to result in a Material Adverse Effect.
(c) Legality. In the opinion of such Funding Party or its
counsel, the transactions contemplated by the Operative Documents shall not
violate any Applicable Law, and no change shall have occurred or been proposed
in Applicable Law that would make it illegal for such Funding Party to
participate in any of the transactions contemplated by the Operative Documents.
(d) No Events. (i) No Event of Default, Potential Event of
Default, Event of Loss or Event of Taking relating to such Leased Property shall
have occurred and be continuing, (ii) no action shall be pending or threatened
by a Governmental Authority to initiate a Condemnation or an Event of Taking,
and (iii) there shall not have occurred any event that would reasonably be
expected to have a Material Adverse Effect since December 31, 1998.
(e) Representations. Each representation and warranty of the
parties hereto or to any other Operative Document contained herein or in any
other Operative Document shall be true and correct in all material respects as
though made on and as of such Closing Date, except to the extent such
representations or warranties relate solely to an earlier date, in which case
such representations and warranties shall have been true and correct in all
material respects on and as of such earlier date.
(f) Cutoff Date. No Closing Date shall occur after the Funding
Termination Date.
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(g) Transaction Expenses. The related Lessee shall have paid,
or made arrangements to pay, the transaction costs then accrued and invoiced
which the Lessees have agreed to pay pursuant to Section 8.8.
(h) Approval. The Agent shall not have rejected such Leased
Property for inclusion in the Lease by written notice to DTD.
SECTION 3.2 Additional Conditions for the Initial Closing Date. The
obligations of the Lessor and each Lender to carry out their respective
obligations under Section 2 of this Master Agreement to be performed on the
Initial Closing Date shall be subject to the satisfaction of, or waiver by, each
such party hereto (acting directly or through its counsel) on or prior to the
Initial Closing Date of the following conditions precedent in addition to those
set forth in Section 3.1, provided that the obligations of any Funding Party
shall not be subject to any conditions contained in this Section 3.2 which are
required to be performed by such Funding Party:
(i) Loan Agreement; Guaranty Agreement. Counterparts
of the Loan Agreement, duly executed by the Lessor, the Agent
and each Lender shall have been delivered to each of the
Lessor and the Agent. An A Note and a B Note, duly executed by
the Lessor, shall have been delivered to the Agent. The
Guaranty Agreement, duly executed by DTS and DTD, shall have
been delivered to the Agent.
(ii) Master Agreement. Counterparts of this Master
Agreement, duly executed by the parties hereto, shall have
been delivered to each of the parties hereto.
(iii) Construction Agency Agreement. Counterparts of
the Construction Agency Agreement, duly executed by the
parties thereto shall have been delivered to each of the
parties hereto.
(iv) Lease. Counterparts of the Lease, duly executed
by the Lessees party to this Master Agreement on the Initial
Closing Date, and the Lessor, shall have been delivered to
each Funding Party and the original, chattel paper copy of the
Lease shall have been delivered to the Agent.
(v) Lessee's Resolutions and Incumbency Certificate,
etc. Each of the Agent and the Lessor shall have received (x)
a certificate of the Secretary or an Assistant Secretary of
each of Guarantor and each Lessee party hereto on the Initial
Closing Date, attaching and certifying as to (i) the Board of
Directors' (or appropriate committee's) resolution duly
authorizing the execution, delivery and performance by it of
each Operative Document to which it is or will be a party,
(ii) the incumbency and signatures of persons authorized to
execute and deliver such documents on its behalf, (iii) its
articles or certificate of incorporation, certified as of a
recent date by the Secretary of State of the state of its
11
incorporation and (iv) its by-laws, and (y) good standing
certificates for each of Guarantor and each Lessee party
hereto on the Initial Closing Date from the appropriate
offices of the States of Guarantor's or such Lessee's
incorporation and principal place of business.
(vi) Opinions of Counsel. The opinion of Xxxxxxxxx
Xxxxxxx, P.C. dated the Initial Closing Date, substantially in
the form set forth in Exhibit G-1, attached hereto, and
containing such other matters as the parties to whom it is
addressed shall reasonably request, shall have been delivered
and addressed to each of the Lessor, the Agent and the
Lenders. The opinion of Xxxxx XxXxxxxxx & Oaks Xxxxxxxx, LLP,
dated the Initial Closing Date, substantially in the form set
forth in Exhibit G-3 attached hereto, and containing such
other matters as the parties to whom it is addressed shall
reasonably request, shall have been delivered to each of the
Agent, the Lenders and DTD.
(vii) Good Standing Certificate. The Agent and DTD
shall have received a good standing certificate for the Lessor
from the appropriate office of the State of Texas.
(viii) Lessor's Consents and Incumbency Certificate,
etc. The Agent and DTD shall have received a certificate of
the Secretary or an Assistant Secretary of the General Partner
of the Lessor attaching and certifying as to (i) the consents
of the partners of the Lessor duly authorizing the execution,
delivery and performance by it of each Operative Document to
which it is or will be a party, (ii) the incumbency and
signatures of persons authorized to execute and deliver such
documents on its behalf, and (iii) the Partnership Agreement.
SECTION 3.3 Conditions to the Obligations of Lessee. The obligations of
any Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the related Closing Date to the satisfaction of, or waiver by,
such Lessee, of the following conditions precedent:
(a) General Conditions. The conditions set forth in Sections
3.1 and 3.2 that require fulfillment by the Lessor or the Lenders shall have
been satisfied, including the delivery of good standing certificates by the
Lessor pursuant to Sections 3.1(a)(xiv) and 3.2(vii) and the delivery of an
opinion of counsel for the Lessor pursuant to Section 3.2(vi) and the execution
and delivery of the Operative Documents to be executed by the Lessor or the
Lenders in connection with such Leased Property.
(b) Legality. In the opinion of such Lessee or its counsel,
the transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in Applicable
Law that would make it illegal for such Lessee to participate in any of the
transactions contemplated by the Operative Documents.
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(c) Purchase Agreement; Ground Lease. The Purchase Agreement
and, if applicable, the Ground Lease and all documents to be delivered under the
Purchase Agreement or Ground Lease, including title insurance, survey and
environmental audit, shall be reasonably satisfactory to such Lessee.
SECTION 3.4 Conditions to the Obligations of the Funding Parties on
each Funding Date. The obligations of the Lessor and each Lender to carry out
their respective obligations under Section 2 of this Master Agreement to be
performed on each Funding Date shall be subject to the fulfillment to the
satisfaction of, or waiver by, each such party hereto (acting directly or
through their respective counsel) on or prior to each such Funding Date of the
following conditions precedent, provided that the obligations of any Funding
Party shall not be subject to any conditions contained in this Section 3.4 which
are required to be performed by such Funding Party:
(a) Funding Request. The Lessor and the Agent shall have
received from the Construction Agent or a Lessee the Funding Request therefor
pursuant to Section 2.2(d).
(b) Condition Fulfilled. As of such Funding Date, the
condition set forth in Section 3.1A(d)(i) shall have been satisfied.
(c) Representations. As of such Funding Date, both before and
after giving effect to the Funding requested by the Construction Agent or a
Lessee on such date, the representations and warranties that the Construction
Agent or such Lessee is deemed to make pursuant to Section 2.2(e) shall be true
and correct in all material respects on and as of such Funding Date as though
made on and as of such Funding Date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.
(d) No Bonded Stop Notice or Filed Mechanics Lien. As of such
Funding Date, and as to any Funded Amount requested for any Leased Property on
such Funding Date, (i) none of the Lessor, the Agent or any Lender has received
(with respect to such Leased Property) a bonded notice to withhold Loan funds
that has not been discharged by the related Lessee or the Construction Agent,
and (ii) no mechanic's liens or materialman's liens have been filed against such
Leased Property that have not been discharged by the related Lessee, bonded over
in a manner reasonably satisfactory to the Agent or insured over by the Title
Insurance Company.
(e) Lease Supplement. If the Funding relates to a Building
that will be leased under a Lease Supplement separate from the Lease Supplement
for the related Land, the original of such separate Lease Supplement, duly
executed by the related Lessee and the Lessor and in recordable form, shall have
been delivered to the Agent.
SECTION 3.5 Completion Date Conditions. The occurrence of the
Completion Date with respect to any Leased Property shall be subject to the
fulfillment to the satisfaction of, or
13
waiver by, each party hereto (acting directly or through its counsel) of the
following conditions precedent:
(a) Title Policy Endorsements; Architect's Certificate. The
Construction Agent shall have furnished to each Funding Party (1) the following
endorsements to the related Title Policy (each of which shall be subject to no
exceptions other than those reasonably acceptable to the Agent): a date-down
endorsement (redating and confirming the coverage provided under the Title
Policy and each endorsement thereto) and a "Form 9" endorsement (if available in
the applicable jurisdiction), in each case, effective as of a date not earlier
than the date of completion of the Construction, and (2) a certificate of the
Architect dated at or about the Completion Date, in form and substance
reasonably satisfactory to the Agent, the Lessor and the Lenders, and stating
that (i) the related Building has been completed substantially in accordance
with the Plans and Specifications therefor, and such Leased Property is ready
for occupancy, (ii) such Plans and Specifications comply in all material
respects with all Applicable Laws in effect at such time, and (iii) to the best
of the Architect's knowledge, such Leased Property, as so completed, complies in
all material respects with all Applicable Laws in effect at such time. The
Construction Agent shall also deliver to the Agent true and complete copies of:
(A) an "as built" or "record" set of the Plans and Specifications, (B) a plat of
survey of such Leased Property "as built" to a standard reasonably acceptable to
the Agent showing all easements, paving, driveways, fences and exterior
improvements, and (C) copies of a certificate or certificates of occupancy for
such Leased Property or other legally equivalent permission to occupy such
Leased Property.
(b) Construction Completion. Any related Construction shall
have been completed substantially in accordance with the related Plans and
Specifications (subject to minor punch list requirements), the related Deed and
all Applicable Laws, and such Leased Property shall be ready for occupancy and
operation. All fixtures, equipment and other property contemplated under the
Plans and Specifications to be incorporated into or installed in such Leased
Property shall have been substantially incorporated or installed, free and clear
of all Liens except for Permitted Liens.
(c) Construction Agent Certification. The Construction Agent
shall have furnished the Lessor, the Agent and each Lender with a certification
of the Construction Agent (substantially in the form of Exhibit H) that:
(i) all amounts owing to third parties for the
related Construction have been paid in full (other than
contingent obligations for which the Construction Agent has
made adequate reserves), and no litigation or proceedings are
pending, or to the best of the Construction Agent's knowledge,
are threatened, against such Leased Property or the
Construction Agent or the related Lessee which could
reasonably be expected to have a Material Adverse Effect;
14
(ii) all material consents, licenses and permits and
other governmental authorizations or approvals required for
such Construction and operation of such Leased Property have
been obtained and are in full force and effect;
(iii) such Leased Property has available all services
of public facilities and other utilities necessary for use and
operation of such Leased Property for its intended purposes
including, without limitation, adequate water, gas and
electrical supply, storm and sanitary sewerage facilities,
telephone, other required public utilities and means of access
between the related Building and public highways for
pedestrians and motor vehicles;
(iv) all material agreements, easements and other
rights, public or private, which are necessary to permit the
lawful use and operation of such Leased Property as the
related Lessee intends to use such Leased Property under the
Lease and which are necessary to permit the lawful intended
use and operation of all then intended utilities, driveways,
roads and other means of egress and ingress to and from the
same have been obtained and are in full force and effect and
neither the Construction Agent nor the related Lessee has any
knowledge of any pending modification or cancellation of any
of the same; and the use of such Leased Property does not
depend on any variance, special exception or other municipal
approval, permit or consent that has not been obtained and is
in full force and effect for its continuing legal use;
(v) all of the requirements and conditions set forth
in Section 3.5(b) hereof have been completed and fulfilled
with respect to such Leased Property and the related
Construction; and
(vi) to the best of the Construction Agent's
knowledge, such Leased Property is in compliance in all
material respects with all applicable zoning laws and
regulations.
SECTION 3.6 Addition of Lessees. After the date hereof, additional
Subsidiaries of DTS may become Lessees hereunder and under the other Operative
Documents upon satisfaction of the following conditions precedent:
(a) such Subsidiary and the Guarantor shall have executed and
delivered to the Agent and the Lessor a Joinder Agreement, substantially in the
form of Exhibit E;
(b) such Subsidiary shall have delivered to each of the Agent
and the Lessor (x) a certificate of the Secretary or an Assistant Secretary of
such Subsidiary, attaching and certifying as to (i) the Board of Directors'
resolution duly authorizing the execution, delivery and performance by it of
each Operative Document to which it is or will be a party, (ii) the incumbency
and signatures of persons authorized to execute and deliver such documents on
its behalf, (iii) its certificate of incorporation, certified as of a recent
date by the Secretary of State of its incorporation and (iv) its by-laws, and
(y) good
15
standing certificates from the appropriate offices of the States of such
Subsidiary's incorporation and principal place of business;
(c) such Subsidiary shall have delivered an opinion of
Xxxxxxxxx Xxxxxxx, P.C., addressed to each of the Lessor, the Agent and the
Lenders, substantially in the form set forth in Exhibit G-1; and
(d) the Agent, the Lessor and the Lenders shall have received
such other documents, certificates and information as any of them shall have
reasonably requested.
ARTICLE IV.
REPRESENTATIONS
SECTION 4.1 Representations of DTS, DTD and other Lessees. Effective as
of the date of execution hereof, as of each Closing Date and as of each Funding
Date, each of DTS, DTD and each other Lessee represents and warrants to each of
the other parties hereto as follows:
(a) Corporate Authority; Etc.
(1) Incorporation; Good Standing. Each of the DTD and
DTS (i) is a Virginia corporation, validly existing and in
good standing under the laws of the State of Virginia, (ii)
has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated,
and(iii) is in good standing as a foreign corporation and is
duly authorized to do business in each jurisdiction where a
Leased Property is located and in each other jurisdiction
where such qualification is necessary except where a failure
to be so qualified in such other jurisdiction would not have a
Materially Adverse Effect.
(2) Authorization. The execution, delivery and
performance of this Master Agreement and the other Operative
Documents to which any Obligor or the Founders is to become a
party and the transactions contemplated hereby and thereby (i)
are within the authority of each Obligor, (ii) have been duly
authorized by all necessary proceedings, (iii) do not and will
not conflict with or result in any breach or contravention of
any provision of law, statute, rule, regulation or agreement
to which any Obligor is subject or any judgment, order, writ,
injunction, license or permit applicable to any Obligor, and
(iv) do not and will not conflict with any provision of any
Obligor's organization documents or other charter documents or
bylaws of, or any agreement or other instrument binding upon,
any Obligor.
(3) Enforceability. The execution and delivery of
this Master Agreement and the other Operative Documents to
which each Obligor is or is to become a party will result in
valid and legally binding obligations of each Obligor
enforceable against it in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium
or other
16
laws relating to or affecting generally the enforcement of
creditors' rights and except to the extent that availability
of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) Governmental Approvals. The execution, delivery and
performance by each Obligor of this Master Agreement and the other Operative
Documents to which any Obligor is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained and the filing of related Mortgages, Assignments of Lease and Rents,
Lease Supplements and financing statements in the appropriate records office
with respect thereto.
(c) Title to Properties; Leases. DTS and its Subsidiaries own,
or possess under Capitalized Leases, all of the assets reflected in the
consolidated balance sheet of DTS and its Subsidiaries as at the Balance Sheet
Date or acquired since that date (except property and assets sold or otherwise
disposed of in the ordinary course of business since that date), and such assets
are not subject to any mortgages, leases (other than Capitalized
Leases),conditional sales agreements, title retention agreements, liens or other
encumbrances except General Permitted Liens.
(d) Solvency; Financial Statements. Each of the Obligors is
Solvent. The following financial statements have been furnished to the Agent and
each of the Funding Parties:
(1) A consolidated balance sheet of DTS and its
Subsidiaries as of December 31, 1998, and a consolidated
statement of income for the fiscal year then ended,
accompanied by an auditor's report prepared without
qualification by KPMG Peat Marwick or another independent
certified public accountant selected by DTS and satisfactory
to the Agent. Such balance sheet and statement of income have
been prepared in accordance with Generally Accepted Accounting
Principles and fairly present the financial condition of DTS
and its Subsidiaries as at the close of business on the date
thereof and the results of operations for the fiscal year then
ended. There are no contingent liabilities of DTS or any of
its Subsidiaries as of such date involving material amounts,
known to the officers of DTS or any of its Subsidiaries not
disclosed in said balance sheet and the related notes thereto.
(2) A consolidated balance sheet, a consolidated
statement of income and a consolidated statement of cash flow
of DTS and its Subsidiaries for each of the fiscal quarters of
DTS ended since December 31, 1998 certified by the chief
financial officer of DTS to have been prepared in accordance
with Generally Accepted Accounting Principles consistent with
those used in the preparation of the annual audited statements
delivered pursuant to paragraph (a) above and to fairly
present the financial condition of DTS and its Subsidiaries as
at the close of business on the dates thereof and the results
of operations for the fiscal quarters then ended (subject to
year-end adjustments). There are no contingent liabilities of
DTS or any of its Subsidiaries as of such dates involving
17
material amounts, known to the officers of DTS or any of its
Subsidiaries, not disclosed in such balance sheets and the
related notes thereto.
(e) No Material Changes, Etc. From the Balance Sheet Date to
the date of this Master Agreement, there has occurred no materially adverse
change in the financial condition or business of DTD, DTS or its Subsidiaries as
shown on or reflected in the consolidated balance sheet of DTS and its
Subsidiaries as of the Balance Sheet Date, or the consolidated statement of
income for the fiscal year then ended, other than changes in the ordinary course
of business that have not had any materially adverse effect either individually
or in the aggregate on the business or financial condition of DTD, DTS or its
Subsidiaries.
(f) Franchises, Patents, Copyrights, Etc. The Obligors possess
all franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any rights
of others, except where failure to possess such rights has not had, and would
not have, a Material Adverse Effect..
(g) Litigation. Except as stated on Schedule 4.1(g), there are
no actions, suits, proceedings or investigations of any kind pending or, to the
knowledge of DTD, threatened against any Obligors before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of any Obligor or materially impair the
right of any Obligor to carry on business substantially as now conducted by it,
or result in any substantial liability not adequately covered by insurance, or
for which adequate reserves are not maintained on the consolidated balance sheet
of DTS and its Subsidiaries, or which question the validity of this Master
Agreement or any of the other Operative Documents, or any action taken or to be
taken pursuant hereto or thereto.
(h) No Materially Adverse Contracts, Etc. None of the Obligors
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of any Obligor. None of the Obligors is a party to any contract or
agreement that has or is expected, in the judgment of DTD's officers, to have
any materially adverse effect on the business of any Obligor.
(i) Compliance with Other Instruments, Laws, Etc. None of the
Obligors is in violation of any provision of its charter or other organization
documents, by-laws, or any agreement or instrument to which it may be subject or
by which it or any of its properties may be bound or any decree, order,
judgment, statute, license, rule or regulation, in any of the foregoing cases in
a manner that could result in the imposition of substantial penalties or
materially and adversely affect the financial condition, properties or business
of any Obligor.
(j) Tax Status. Each Obligor (a) has made or filed, or placed
under lawful extension, all federal and state income and all other tax returns,
reports and declarations required
18
by any jurisdiction to which it is subject, except where the failure to so make
or file such tax returns, reports or declarations has not had, and would not
have, a Material Adverse Effect, (b) has paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and by appropriate
proceedings and except where the failure to pay such taxes and other amounts has
not had, and would not have, a Material Adverse Effect, and (c) has set aside on
its books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of DTD know of no basis
for any such claim.
(k) No Event of Default. No Potential Event of Default or
Event of Default has occurred and is continuing.
(l) Holding Company and Investment Company Acts. None of the
Obligors is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is it an "investment
company", or an "affiliated company" or a "principal underwriter" of
an"investment company", as such terms are defined in the Investment Company Act
of 1940.
(m) Certain Transactions. Except as set forth on Schedule
4.1(m), none of the officers, directors, or employees of any Obligor is
presently a party to any transaction with any Obligor (other than for services
as employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by, providing
for rental of real or personal property to or from, or otherwise requiring
payments to or from any officer, trustee, director or such employee or, to the
knowledge of DTD, any corporation, partnership, trust or other entity in which
any officer, trustee, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
(n) Employee Benefit Plans; Multiemployer Plans; Guaranteed
Pension Plans.
(1) No ERISA Reportable Event has occurred and is
continuing with respect to any such Plan; (ii) PBGC has not
instituted proceedings to terminate any such Plan; (iii) none
of the Obligors has (A) incurred any liability to PBGC with
respect to any such Plan other than for premiums not yet due
or payable, or (B)instituted or does not intend to institute
proceedings to terminate any such Plan under Sections 4041 or
4041A of ERISA or withdraw from any Multi-Employer Pension
Plan (as that term is defined in Section 3(37) of ERISA); (iv)
each such Plan of the Obligors has been maintained and funded
in all material respects in accordance with its terms and with
all provisions of ERISA and the Code applicable thereto; (v)
where applicable, each of the Obligors has complied with all
applicable minimum funding requirements of ERISA and the Code
with respect to each Plan; (vi) there are no unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA) with
respect to any such Plan of any of the Obligors which pose a
risk of causing a lien to be created in its assets; and(vii)
no material
19
prohibited transaction under the Code or ERISA has occurred
with respect to any such Plan of any of the Obligors.
(o) Regulations U and X. No portion of any Advance is to be
used for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
(p) Environmental Compliance. Except as disclosed on Schedule
4.1(p),
(1) the operations of the Obligors comply in all
material respects with all applicable Environmental Laws;
(2) none of the operations of any Obligor is the
subject of any judicial or administrative proceeding alleging
the violation of any Environmental Laws;
(3) none of the operations of any Obligor is the
subject of any federal or state investigation evaluating
whether DTD or any of the Subsidiaries disposed of any
hazardous or toxic waste, substance or constituent at any site
that may require remedial action, or any federal or state
investigation evaluating whether any remedial action is needed
to respond to are lease of any hazardous or toxic waste,
substance or constituent into the environment;
(4) none of the Obligors has filed any notice under
any federal or state law indicating past or present treatment,
storage or disposal of a hazardous waste or reporting a spill
or release of a hazardous or toxic waste, substance or
constituent into the environment;
(5) none of the Obligors has any contingent liability
of which DTD has knowledge or reasonably should have knowledge
in connection with any release of any hazardous or toxic
waste, substance or constituent into the environment, nor has
any Obligor received any notice, letter or other indication of
potential liability arising from the disposal of any hazardous
or toxic waste, substance or constituent into the environment.
(q) Subsidiaries. Schedule 4.1(q) sets forth all of the
Subsidiaries of DTD and DTS. Except as set forth in Schedule 4.1(q), DTD or DTS,
as applicable, is the owner, free and clear of all liens and encumbrances, of
all of the issued and outstanding capital stock of each Subsidiary. Except as
set forth in Schedule 4.1(q), all shares of such stock have been validly issued
and are fully paid and nonassessable and no rights to subscribe to any
additional shares have been granted, and no options, warrants, or similar rights
are outstanding.
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(r) Trade Names. The Obligors do not transact or engage, and
have not transacted or engaged, in business under any names other than those set
forth in Schedule 4.1(r) hereto.
(s) Hazardous Materials - Leased Properties.
(i) To the best knowledge of the related Lessee,
except as described in the related Environmental Audit, on the
Closing Date for each Leased Property, there are no Hazardous
Materials present at, upon, under or within such Leased
Property or released or transported to or from such Leased
Property (except in compliance in all material respects with
all Applicable Law).
(ii) To the best knowledge of the related Lessee, on
the related Closing Date, no Governmental Actions have been
taken or are in process or have been threatened, which could
reasonably be expected to subject such Leased Property, any
Lender or the Lessor to any Material Claims or Liens with
respect to such Leased Property under any Environmental Law or
would otherwise have a Material Adverse Effect.
(iii) The related Lessee has, or will obtain on or
before the date required by Applicable Law, all Environmental
Permits necessary to operate each Leased Property, if any, in
accordance with Environmental Laws and is complying with and
has at all times complied with all such Environmental Permits,
except to the extent the failure to obtain such Environmental
Permits or to so comply would not have a Material Adverse
Effect.
(iv) Except as set forth in the related Environmental
Audit or in any notice subsequently furnished by the related
Lessee to the Agent and approved by the Agent in writing prior
to the respective times that the representations and
warranties contained herein are made or deemed made hereunder,
no notice, notification, demand, request for information,
citations, summons, complaint or order has been issued or
filed to or with respect to the related Lessee, no penalty has
been assessed on the related Lessee and no investigation or
review is pending or, to its best knowledge, threatened by any
Governmental Authority or other Person in each case relating
to any Leased Property with respect to any alleged material
violation or liability of the related Lessee under any
Environmental Law. To the best knowledge of the related
Lessee, no material notice, notification, demand, request for
information, citations, summons, complaint or order has been
issued or filed to or with respect to any other Person, no
material penalty has been assessed on any other Person and no
investigation or review is pending or threatened by any
Governmental Authority or other Person relating to any Leased
Property with respect to any alleged material violation or
liability under any Environmental Law by any other Person.
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(v) Each Leased Property and each portion thereof are
presently in compliance in all material respects with all
Environmental Laws, and, to the best knowledge of the related
Lessee, there are no present or past facts, circumstances,
activities, events, conditions or occurrences regarding such
Leased Property (including without limitation the release or
presence of Hazardous Materials) that would reasonably be
anticipated to (A) form the basis of a material Claim against
such Leased Property, any Funding Party or the related Lessee,
(B) cause such Leased Property to be subject to any material
restrictions on ownership, occupancy, use or transferability
under any Environmental Law, (C) require the filing or
recording of any notice or restriction relating to the
presence of Hazardous Materials in the real estate records in
the county or other appropriate municipality in which such
Leased Property is located, other than notices filed in the
ordinary cause of business, or (D) prevent or materially
interfere with the continued operation and maintenance of such
Leased Property as contemplated by the Operative Documents.
For purposes of this Section 4.1(s), the term "material" with respect to any
event or circumstance means that such event or circumstance would reasonably be
anticipated to result in criminal or material liability on the part of any
Funding Party, or to have a material adverse effect on the value of any Leased
Property or to otherwise have a Material Adverse Effect.
(t) Leased Property. The present condition of each Leased
Property conforms in all material respects with all conditions or requirements
of all existing material permits and approvals issued with respect to such
Leased Property, and the related Lessee's future intended use of such Leased
Property under the Lease does not, in any material respect, violate any
Applicable Law. To the best knowledge of the related Lessee, no material
notices, complaints or orders of violation or non-compliance have been issued or
threatened or contemplated by any Governmental Authority with respect to any
Leased Property or any present or intended future use thereof. All material
agreements, easements and other rights, public or private, which are necessary
to permit the lawful use and operation of each Leased Property as the related
Lessee intends to use such Leased Property under the Lease and which are
necessary to permit the lawful intended use and operation of all presently
intended utilities, driveways, roads and other means of egress and ingress to
and from the same have been, or to the related Lessee's best knowledge will be,
obtained and are or will be in full force and effect, and the related Lessee has
no knowledge of any pending material modification or cancellation of any of the
same.
(u) Flood Hazard Areas. No portion of any Leased Property is
located in an area identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable agency, or if any such Leased
Property is located in an area identified as a special flood hazard area by the
Federal Emergency Management Agency or other applicable agency, then flood
insurance has been obtained for such Leased Property in accordance with the
Lease and in accordance with the National Flood Insurance Act of 1968, as
amended.
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SECTION 4.2 Survival of Representations and Effect of Fundings.
(a) Survival of Representations and Warranties. All
representations and warranties made in Section 4.1 shall survive delivery of the
Operative Documents and every Funding, and shall remain in effect until all of
the Obligations are fully and irrevocably paid.
(b) Each Funding a Representation. Each Funding accepted by a
Lessee or the Construction Agent shall be deemed to constitute a representation
and warranty by DTS, DTD and each other Lessee to the effect of Section 4.1.
SECTION 4.3 Representations of the Lessor. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, in each
case, with respect to each of the Leased Properties, the Lessor represents and
warrants to the Agent, the Lenders and the Lessees as follows:
(a) Securities Act. The interest being acquired or to be
acquired by the Lessor in such Leased Property is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
provided that the Lessor shall be entitled to assign, convey or transfer its
interest in accordance with Section 6.1.
(b) Due Organization, etc. The Lessor is a limited partnership
duly organized and validly existing in good standing under the laws of Texas and
each state in which a Leased Property is located and has full power, authority
and legal right to execute, deliver and perform its obligations under the Lease,
this Master Agreement and each other Operative Document to which it is or will
be a party.
(c) Due Authorization; Enforceability, etc. This Master
Agreement and each other Operative Document to which the Lessor is or will be a
party have been or will be duly authorized, executed and delivered by or on
behalf of the Lessor and are, or upon execution and delivery will be, legal,
valid and binding obligations of the Lessor enforceable against it in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by general equitable principles.
(d) No Conflict. The execution and delivery by the Lessor of
the Lease, this Master Agreement and each other Operative Document to which the
Lessor is or will be a party, are not or will not be, and the performance by the
Lessor of its obligations under each will not be, inconsistent with its
Partnership Agreement, do not and will not contravene any Applicable Law
applicable generally to parties providing financing and do not and will not
contravene any provision of, or constitute a default under, any Contractual
Obligation of Lessor, do not and will not require the consent or approval of,
the giving of notice to, the registration with or taking of any action in
respect of or by, any Governmental Authority applicable generally to parties
providing financing, except such as have been obtained, given or accomplished,
and the Lessor
23
possesses all requisite regulatory authority to undertake and perform its
obligations under the Operative Documents.
(e) Litigation. There are no pending or, to the knowledge of
the Lessor, threatened actions or proceedings against the Lessor before any
court, arbitrator or administrative agency with respect to any Operative
Document or that would have a material adverse effect upon the ability of the
Lessor to perform its obligations under this Master Agreement or any other
Operative Documents to which it is or will be a party.
(f) Lessor Liens. No Lessor Liens (other than those created by
the Operative Documents) exist on any Closing Date on the Leased Property, or
any portion thereof, and the execution, delivery and performance by the Lessor
of this Master Agreement or any other Operative Document to which it is or will
be a party will not subject any Leased Property, or any portion thereof, to any
Lessor Liens (other than those created by the Operative Documents).
(g) Employee Benefit Plans. The Lessor is not and will not be
making its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
(h) General Partner. The sole general partner of the Lessor is
Atlantic Financial Managers, Inc.
(i) Financial Information. (A) The unaudited balance sheet of
the Lessor as of December 31, 1998 and the related statements of income,
partners' capital and cash flows for the year then ended, copies of which have
been delivered to the Agent, fairly present, in conformity with sound accounting
principles, consistent with the income tax basis reports provided to DTS for the
period ended on December 31, 1998, the financial condition of the Lessor as of
such date and the results of operations and cash flows for such period.
(B) Since December 31, 1998, there has been no event, act,
condition or occurrence having a material adverse effect upon the financial
condition, operations, performance or properties of the Lessor, or the ability
of the Lessor to perform in any material respect its obligations under the
Operative Documents.
(C) The Lessor has no recourse indebtedness, and the Lessor
has not entered into any other transactions, purchases, leases or other
agreements, other than immaterial transactions, purchases, leases and other
agreements entered into by the Lessor in the ordinary course of its business, in
which the Lessor has any liability to the other parties to such transactions,
purchases, leases or other agreements that is in excess of the Lessor's
ownership or other interest in the property subject to such transactions,
purchases, leases or other agreements other than liability for required
fundings, breach of contract, misrepresentation, gross negligence, willful
misconduct, fraud, failure to turn over funds and similar exceptions to
limitations on recourse.
24
(j) No Offering. The Lessor has not offered the Notes to any
Person in any manner that would subject the issuance thereof to registration
under the Securities Act or any applicable state securities laws.
(k) Investment Company. The Lessor is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
SECTION 4.4 Representations of each Lender. Effective as of the date of
execution hereof, as of each Closing Date and as of each Funding Date, each
Lender represents and warrants to the Lessor and to the Lessees as follows:
(a) Securities Act. The interest being acquired or to be
acquired by such Lender in the Funded Amounts is being acquired for its own
account, without any view to the distribution thereof or any interest therein,
provided that such Lender shall be entitled to assign, convey or transfer its
interest in accordance with Section 6.2.
(b) Employee Benefit Plans. Such Lender is not and will not be
making its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
ARTICLE V.
COVENANTS OF OBLIGORS AND THE LESSOR
SECTION 5.1 Records and Accounts. Each Obligor will (a) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with Generally Accepted Accounting Principles and
(b)maintain adequate accounts and reserves for all taxes (including income
taxes),depreciation and amortization of its properties, contingencies, and other
reserves.
SECTION 5.2 Financial Statements, Certificates and Information. DTS
will deliver to each of the Agent and each of the Funding Parties:
(a) As soon as practicable, but in any event not later than
one hundred twenty (120) days after the end of each fiscal year of DTS, the
audited consolidated balance sheet of DTS and its Subsidiaries at the end of
such year, and the related audited consolidated statements of earnings and cash
flows for such year, each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable detail,
prepared in accordance with Generally Accepted Accounting Principles, and
accompanied by an auditor's report prepared without qualification by KPMG Peat
Marwick or by another independent certified public accountant acceptable to the
Agent), together with the notes accompanying the financial statements.
25
(b) As soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter of DTS, copies of the
unaudited consolidated balance sheet of DTS and its Subsidiaries as of the end
of such quarter, and the related unaudited consolidated statements of income and
cash flow for such quarter and that portion of the fiscal year of DTS then
elapsed, all in reasonable detail and prepared in accordance with Generally
Accepted Accounting Principles, in each case setting forth in comparative form
the figures for the corresponding period of the prior fiscal year, together with
a certification by the principal financial or accounting officer, or Corporate
Controller, of DTS that the information contained in such financial statements
fairly presents the financial position of DTS and its Subsidiaries on the date
thereof (subject to year-end adjustments). In addition, DTD shall include an
analysis of gross margins and of "same store sales", as applicable for each
Obligor, in form satisfactory to the Agent and each of the Funding Parties.
(c) Simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b), above, a statement in the
form of Exhibit J hereto signed by the principal financial or accounting
officer, or Corporate Controller, of DTD and setting forth in reasonable detail
computations evidencing compliance with the covenants contained in Section 5.23
through 5.29 and (if applicable) reconciliations to reflect changes in Generally
Accepted Accounting Principles since the Balance Sheet Date.
(d) As soon as available and in any event within ninety (90)
days after the close of each Fiscal Year, (i) copies of internally prepared
unaudited consolidated and consolidating balance sheets and statements of income
of Obligors for such Fiscal Year prepared in a manner consistent with past
practice and in form and substance satisfactory to the Funding Parties and (ii)
internally prepared reports reflecting gross margin results and providing such
"same store" analysis of financial performance as the Funding Parties may
request, all of which shall be in form satisfactory to the Funding Parties.
(e) As soon as practicable, but in any event not later than
sixty (60) days after the close of each Fiscal Year, monthly projections of the
financial condition and results of operations of the Obligors for the current
fiscal year and annual projections thereof for each fiscal year thereafter
through and including the Fiscal Year of the Lease Termination Date, including,
but not limited to, a projected Consolidated balance sheet, statement of
operations, and statement of cash flows for each of such Fiscal Years.
(f) Promptly after the filing of any report on Form 8-K with
the Securities and Exchange Commission by any Obligor, notice of such filing.
(g) From time to time such other financial data and
information as the Agent or any Funding Party may reasonably request.
26
SECTION 5.3 Notices.
(a) Defaults. DTD will, and shall cause each other Obligor to,
promptly notify the Agent and each of the Funding Parties in writing of the
occurrence of any Potential Event of Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under any Operative Document
or under any note, evidence of indebtedness, indenture or other obligation to
which or with respect to which any Obligor is a party or obligor, whether as
principal or surety, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on any Obligor, DTD
shall, and shall cause each other Obligor to, forthwith give written notice
thereof to the Agent and each of the Funding Parties, describing the notice or
action and the nature of the claimed default.
(b) Environmental Events. DTD will, and will cause each other
Obligor to, promptly give notice to the Agent (i) of any violation of any
Environmental Law that any Obligor reports in writing or is reportable by such
Person in writing to any federal, state or local environmental agency and (ii)
upon becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
or any federal, state or local environmental agency or board, that in either
case involves any Real Estate or has the potential to have a Material Adverse
Effect.
(c) Notice of Litigation and Judgments. DTD will, and will
cause each other Obligor to, give notice to the Agent and each of the Funding
Parties in writing within fifteen (15) days of becoming aware of any litigation
or proceedings threatened in writing or any pending litigation and proceedings
affecting any Obligor or to which any Obligor is or is to become a party
involving an uninsured claim against any Obligor that could reasonably be
expected to have a materially adverse effect on any Obligor and stating the
nature and status of such litigation or proceedings. DTD will, and will cause
each other Obligor to, give notice to the Agent and each of the Funding Parties,
in writing, in form and detail satisfactory to the Agent and each of the Funding
Parties, within ten (10) days of any judgment in excess of $100,000.00, not
covered by insurance, final or otherwise, against any Obligor.
SECTION 5.4 Existence; Maintenance of Properties. Each Obligor will do
or cause to be done all things necessary to preserve and keep in full force and
effect its existence as a Virginia corporation. DTD will do or cause to be done
all things necessary to preserve and keep in full force all of its rights and
franchises and those of the other Obligors. Each Obligor (a) will cause all of
its properties used or useful in the conduct of its business to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment, (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
such Obligor may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will each continue to engage primarily in the businesses now conducted by it and
in related businesses.
27
SECTION 5.5 Insurance. The Obligors will maintain insurance on all
Leased Properties as required by the Lease and will maintain with respect to its
other properties, with financially sound and reputable insurers, insurance with
respect to such properties and its business against such casualties and
contingencies as shall be in accordance with the general practices of businesses
engaged in similar activities in similar geographic areas and in amounts,
containing such terms, in such forms and for such periods as may be reasonable
and prudent.
SECTION 5.6 Taxes. Each Obligor will duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies,
except where the failure to so pay has not had, and would not have, a Material
Adverse Effect; provided, however, that Obligors shall not be required to pay
any such tax, assessment, charge or levy if and so long as the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings, appropriate accruals and cash reserves therefor have
been established in accordance with Generally Accepted Accounting Principles and
no lien with respect thereto has been filed against such Obligor or any of its
assets.
SECTION 5.7 Inspection of Properties and Books. Each Obligor shall
permit the Agent or any of the Agent's designated representatives upon
twenty-four (24) hours prior notice to DTD (at DTD's expense),to visit and
inspect any of the properties of any Obligor to examine the books of account of
any Obligor (and to make copies thereof and extracts therefrom)and to discuss
the affairs, finances and accounts of any Obligor with, and to be advised as to
the same by, its officers, all at such reasonable times and intervals as the
Agent may reasonably request (but in no event in excess of once in any fiscal
year if no Potential Event of Default or Event of Default has arisen).
SECTION 5.8 Compliance with Laws, Contracts, Licenses, and Permits.
Each Obligor will comply with (a) all material applicable laws and regulations
now or hereafter in effect wherever its business is conducted, including all
Environmental Laws, (b) the provisions of its corporate charter and other
charter documents and by-laws, (c) all agreements and instruments to which it is
a party or by which it or any of its properties may be bound, except where the
failure to so comply has not had, and would not have, a Material Adverse Effect,
and (d) all applicable decrees, orders, and judgments except for violations
which, in the aggregate, do not have a material adverse effect on the business,
operations, properties, assets, or financial condition of such Obligor. If at
any time while any Obligation is Outstanding or the Funding Parties have any
obligation to make Advances hereunder, any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that any Obligor may fulfill any of
its obligations hereunder, each Obligor will promptly take or cause to be taken
all reasonable steps to obtain such authorization, consent, approval, permit or
license and furnish the Agent and the Funding Parties with evidence thereof.
SECTION 5.9 ERISA Compliance. Each of the Obligors shall at all times
make prompt payment of all contributions required under all Employee Benefit
Plans, Multiemployer Plans
28
and Guaranteed Pension Plans and required to meet the minimum funding standard
set forth in ERISA with respect to all such Plans.
SECTION 5.10 Restrictions on Indebtedness. No Obligor will create,
incur, assume, guarantee or be or remain liable, contingently or otherwise, with
respect to any Indebtedness other than:
(a) Indebtedness arising under any of the Operative Documents
or under the Credit Agreement;
(b) current liabilities of any Obligor incurred in the
ordinary course of business but not incurred through (i) the borrowing of money,
or (ii) the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 5.6;
(d) Indebtedness in respect of judgments or awards not in
excess of $2,000,000.00 in the aggregate that have been in force for less than
the applicable period for taking an appeal so long as execution is not levied
thereunder or in respect of which the Obligor shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a stay
of execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary course
of business;
(f) the Intercompany Loans;
(g) Indebtedness incurred for the construction of the new
distribution and office center for the Obligors, the terms of which Indebtedness
are approved by the Agent in its discretion, which approval shall not be
unreasonably withheld;
(h) Indebtedness existing on the date of this Master Agreement
and listed and described on Schedule 5.10 hereto;
(i) Indebtedness arising under Capitalized Leases; and
(j) other Indebtedness in an aggregate amount not to exceed
ten percent (10%) of the Consolidated Total Assets of the Obligor (other than
those properly classified as intangible assets under Generally Accepted
Accounting Principles) at any one time.
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SECTION 5.11 Restrictions on Liens, Etc. No Obligor will (a) create or
incur or suffer to be created or incurred or to exist any lien, encumbrance,
mortgage, pledge, charge, restriction or other security interest of any kind
upon any of its property or assets of any character whether now owned or
hereafter acquired, or upon the income or profits therefrom; (b) transfer any of
its property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than thirty (30) days
after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or
(e)sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse;
provided that any Obligor may create or incur or suffer to be created or
incurred or to exist:
(i) liens in favor of any Obligor on all or part of the assets of
another Obligor securing Indebtedness owing by such other
Obligor;
(ii) liens on properties to secure taxes, assessments and other
government charges or claims for labor, material or supplies
in respect of obligations not overdue;
(iii) deposits or pledges made in connection with, or to secure
payment of, worker's compensation, unemployment insurance, old
age pensions or other social security obligations;
(iv) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section
5.10(d);
(v) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties in existence less than 40
days from the date of creation thereof in respect of
obligations not overdue;
(vi) encumbrances on properties consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which any Obligor
is a party, and other minor liens or encumbrances none of
which interferes materially with the use of the property
affected in the ordinary conduct of the business of any
Obligor, which defects do not individually or in the aggregate
have a materially adverse effect on the business of any
Obligor individually or of DTS and its Subsidiaries on a
consolidated basis;
(vii) presently outstanding liens listed on Schedule 5.11 hereto; and
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(viii) liens in favor of the Agent and the Lenders under the Operative
Documents.
SECTION 5.12 Restrictions on Investments. No Obligor will make or
permit to exist or to remain outstanding any Investment, except Investments
which constitute:
(a) short term Investments (determined in accordance with
Generally Accepted Accounting Principles), including, without limitation,
marketable direct or guaranteed obligations of the United States of America;
demand deposits, certificates of deposit, bankers acceptances and time deposits
of United States banks; securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United States of
America or any state thereof; and repurchase agreements secured by any of the
foregoing;
(b) Investments existing on the date hereof and listed on
Schedule 5.12 hereto; and
(c) Investments otherwise permitted pursuant to the Credit
Agreement.
SECTION 5.13 Merger, Consolidation. Without the prior written consent
of the Agent, no Obligor will become a party to any merger or consolidation, or
agree to or effect any asset acquisition or disposition or stock acquisition or
disposition (other than the acquisition or disposition of assets in the ordinary
course of business for fair consideration and consistent with past practices)
except (i) the merger or consolidation of one or more of the Subsidiaries of DTS
with and into DTS, (ii) the merger or consolidation of two or more Subsidiaries
of DTS, or (iii) as long as no Potential Event of Default or Event of Default
then exists or would arise therefrom, the merger of any other Person with any
Obligor, provided that the Obligor is the surviving entity and provided further
that the consideration paid by the Obligors in any such merger consists of any
combination of (A) capital stock of DTS and/or (B) other consideration not to
exceed ten percent (10%) of the Consolidated Total Assets of the Obligors (other
than those properly classified as intangible assets under Generally Accepted
Accounting Principles) immediately prior to giving effect to such merger.
SECTION 5.14 Sale and Leaseback. Without the prior written consent of
the Agent (which shall not be unreasonably withheld), no Obligor will enter into
any arrangement, directly or indirectly, whereby any Obligor shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property that such Obligor intends to use for
substantially the same purpose as the property being sold or transferred.
SECTION 5.15 Compliance With Environmental Laws. No Obligor will do any
of the following: (a) use any of the Real Estate or any portion thereof as a
facility for the handling, processing, storage or disposal of Hazardous
Substances, except in full compliance with Environmental Laws, (b) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances except in full
compliance with Environmental Laws, (c) generate or dispose of any Hazardous
Substances
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on any of the Real Estate except in full compliance with Environmental Laws, or
(d) conduct any activity at any Real Estate or use any Real Estate in any manner
so as to cause a Release.
SECTION 5.16 Distributions. Except for (a) Permitted Intercompany
Distributions or (b) as otherwise specifically permitted hereunder or (c) as to
which the Agent shall hereafter consent in writing, no Obligor will make any
Distributions, or (d) as long as no Potential Event of Default or Event of
Default then exists or would arise therefrom, (i) repurchases or redemptions of
the capital stock of DTS in an aggregate amount not to exceed $50,000,000.00,
and (ii) other Distributions which in any fiscal year do not exceed in the
aggregate twenty percent (20%) of Consolidated Net Income for the immediately
preceding fiscal year.
SECTION 5.17 Subsidiaries. Without limiting the provisions of Section
5.11, no Obligor shall acquire, form, or otherwise invest in any Subsidiary,
without the prior written consent of the Agent, which consent shall not be
unreasonably withheld, provided, however, that the Obligors may maintain a
Subsidiary established or acquired in connection with an acquisition or merger
permitted pursuant to Section 5.13 for a period of twelve months after
consummation of such acquisition or merger.
SECTION 5.18 Fiscal Year. The fiscal year of DTS and its Subsidiaries
presently ends on December 31 of each year. The Obligors shall not change their
fiscal year end without furnishing prior written notice thereof to, and first
obtaining the consent of, the Funding Parties, which consent shall not be
unreasonably withheld or delayed.
SECTION 5.19 Loans and Advances. The Obligors will not make any loans
or advances to any Person other than:
(a) Loans and advances existing on the date hereof and listed
on Schedule 5.19 hereof; and
(b) Loans and advances to and among the Obligors for working
capital purposes pursuant and subject to the terms of the Intercompany Operative
Documents.
SECTION 5.20 Transactions With Affiliates. Each of the Obligors may
enter into transactions with (except for making loans to) Affiliates or
shareholders upon terms not less favorable to any such Obligor than would be
obtainable at the time in comparable transactions of such Obligor in arms'
length dealings with Persons other than Affiliates or shareholders and shall
immediately disclose in writing any of said transactions to the Agent and the
Funding Parties.
SECTION 5.21 Amendments to Organizational Documents. The Obligors shall
not amend their articles of incorporation or bylaws, and shall not designate,
issue, create, or authorize additional classes of stock (common or preferred)
without the prior written consent of the Funding Parties.
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SECTION 5.22 Financial Covenants. DTS and its Subsidiaries shall comply
with the financial covenants set forth in the Credit Agreement as in effect from
time to time, which financial covenants are hereby incorporated by reference,
provided that, if the Credit Agreement is terminated or expires, the financial
covenants in the Credit Agreement on the date of such termination or expiration
shall be incorporated herein and shall continue.
SECTION 5.23 Solvency. Each of the Obligors shall remain Solvent at all
times.
SECTION 5.24 Use of Proceeds. DTD will not, and will not permit any
other Obligor to, use any proceeds of any Advance for any purpose other than the
acquisition and Construction of Leased Properties or use any such proceeds in
any manner which violates or results in a violation of law.
SECTION 5.25 Further Assurances. Upon the written request of the Lessor
or the Agent, each Lessee, at its own cost and expense, will cause all financing
statements (including precautionary financing statements), fixture filings and
other similar documents, to be recorded or filed at such places and times in
such manner, as may be necessary to preserve, protect and perfect the interest
of the Lessor, the Agent and the Lenders in the Leased Properties as
contemplated by the Operative Documents.
SECTION 5.26 Additional Required Appraisals. If, as a result of any
change in Applicable Law after the date hereof, an appraisal of all or any of
the Leased Properties is required during the Lease Term under Applicable Law
with respect to any Funding Party's interest therein, such Funding Party's
Funded Amount with respect thereto or the Operative Documents, then the related
Lessee shall pay the reasonable cost of such appraisal.
SECTION 5.27 Lessor's Covenants. The Lessor covenants and agrees that,
unless the Agent, DTD and the Lenders shall have otherwise consented in writing:
(a) the proceeds of the Loans received from the Lenders will
be used by the Lessor solely to acquire the related Leased Property and to pay
the Construction Agent or the related Lessee for certain closing, development
and transaction costs associated therewith and, if applicable, for the costs of
Construction. No portion of the proceeds of the Loans will be used by the Lessor
(i) in connection with, whether directly or indirectly, any tender offer for, or
other acquisition of, stock of any corporation with a view towards obtaining
control of such other corporation or (ii) directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of purchasing or carrying
any Margin Stock;
(b) it shall not engage in any business or activity, or invest
in any Person, except for activities similar to its activities conducted on the
date hereof, the Transaction and lease transactions similar to the Transaction;
(c) it will maintain tangible net worth in an amount no less
than the sum of (i) $100,000 plus (ii) 3% of its total assets (calculated
assuming no reduction in the value of any
33
leased property from its original cost to the Lessor)and will at all times be
solvent (as defined in the Bankruptcy Code);
(d) it will deliver to the Agent and DTD, as soon as available
and in any event within 90 days after the end of each fiscal year, a balance
sheet of the Lessor as of the end of such fiscal year and the related statements
of income, partners' capital and cash flows for such fiscal year, setting forth
in each case in comparative form the figures for the previous fiscal year,
prepared in accordance with sound accounting principles consistent with the
income tax basis reports provided to DTD for the period ended on December 31,
1998, together with copies of its tax returns, all certified by an officer of
the General Partner (and if the Lessor ever prepares audited financial
statements, it shall deliver copies thereof to the Agent and DTD);
(e) it will permit the Agent and DTD and its representatives
to examine, and make copies from, the Lessor's books and records, and to visit
the offices and properties of the Lessor for the purpose of examining such
materials, and to discuss the Lessor's performance hereunder with any of its, or
its general partner's, officers and employees, in each case during normal
business hours and upon reasonable notice;
(f) it shall not consent to or permit the creation of any
easement or other restriction against any Leased Property other than as
permitted pursuant to Article VI of the Lease;
(g) it shall not incur or permit to exist, and will promptly
discharge each Lessor Lien and shall indemnify the Lenders and the Lessees for
any loss, cost, expense or diminution in value of any Leased Property resulting
from, or incurred as a result of, such Lessor Liens;
(h) it shall not enter into any other transactions, leases,
purchases or other agreements, other than immaterial transactions, purchases,
leases and other agreements entered into by the Lessor in the ordinary course of
its business, in which the other parties to said transactions, leases, purchases
or other agreements will have any recourse against Lessor other than recourse to
Lessor's ownership or other interest in the property subject to such
transactions, purchases, leases or other agreements, other than liability for
required fundings, breach of contract, misrepresentation, gross negligence,
willful misconduct, fraud, failure to turn over funds and similar exceptions to
limitations on recourse;
(i) it shall not guaranty the liabilities of any other Person;
(j) it shall pay its debts as such debts become due unless
such debts are the subject of a bona fide dispute; and
(k) it shall promptly notify DTD and the Agent of any claim
against the Lessor that would reasonably be expected to result in a material
liability of the Lessor for which it is not indemnified.
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ARTICLE VI.
TRANSFERS BY LESSOR AND LENDERS
SECTION 6.1 Lessor Transfers. The Lessor shall not assign, convey or
otherwise transfer all or any portion of its right, title or interest in, to or
under any Leased Property or any of the Operative Documents without the prior
written consent of the Lenders and, unless an Event of Default has occurred and
is continuing, DTD. Any proposed transferee of the Lessor shall make the
representation set forth in Section 4.3 to the other parties hereto.
SECTION 6.2 Lender Transfers.
(a) Any Lender may make, carry or transfer Loans at, to or for
the account of, any of its branch offices or the office of an Affiliate of such
Lender.
(b) Each Lender may assign all or a portion of its interests,
rights and obliga tions under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it) to any Person; provided, however, that (i) the Agent and, except during the
continuance of a Potential Event of Default or Event of Default, DTD must give
its prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is to another Lender or
Affiliate of the assigning Lender, (ii) unless such Lender is assigning all of
its Commitment, after giving effect to such assignment, the Commitment of both
the assignor and the assignee is at least $1,000,000 and (iii) the parties to
each such assignment shall execute and deliver to the Agent an Assignment and
Acceptance, and, unless such assignment is to an Affiliate of such Lender, a
processing and recordation fee of $2,500. Any such assignment of the Loans shall
include both the A Loans and the B Loans of such assigning Lender, on a pro rata
basis. No Lessee shall be responsible for such processing and recordation fee or
any costs or expenses incurred by any Lender or the Agent in connection with
such assignment. From and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, the assignee thereunder shall be a party hereto and
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Master Agreement and the Loan
Agreement.
(c) Each Lender may, without the consent of DTD or any Lessee,
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitments in the Loans owing to it),
provided, however, that (i) no Lender may sell a participation in its Commitment
(after giving effect to any permitted assignment hereunder) in an amount in
excess of fifty percent (50%) of such Commitment (provided that (1) sales of
participations to an Affiliate of Lender shall not be included in such
calculation and (2) no such maximum amount shall be applicable to any
participation sold at any time there exists an Event of Default), (ii) such
Lender's obligations under this Master Agreement and the Loan Agreement shall
remain unchanged, (iii) such Lender shall remain solely responsible to the other
parties
35
hereto for the performance of such obligations, (iv) the participating bank or
other entity shall not be entitled to any greater benefit than its selling
Lender under the cost protection provisions contained in Section 7.5 of this
Master Agreement, and (v) DTD, each Lessee, the Agent and the other Lenders
shall continue to deal solely and directly with each Lender in connection with
such Lender's rights and obligations under this Master Agreement and the other
Operative Documents, and such Lender shall retain the sole right to enforce the
obligations of Lessor relating to the Loans and to approve any amendment,
modification or waiver of any provisions of this Master Agreement and the Loan
Agreement (except that such Lender may permit the participant to approve any
amendment, modification or waiver which would reduce the principal of or the
interest rate on its Loan, extend the term of such Lender's Commitment, reduce
the amount of any fees to which such participant is entitled or extend the final
scheduled payment date of any Loan). Any Lender selling a participation
hereunder shall provide prompt written notice to the Agent of the name of such
participant.
(d) Any Lender or participant may, in connection with the
assignment or par ticipation or proposed assignment or participation, pursuant
to this Section, disclose to the assignee or participant or proposed assignee or
participant any information relating DTD or its Subsidiaries furnished to such
Lender by or on behalf of DTD. With respect to any disclosure of confidential,
non-public, proprietary information, such proposed assignee or participant shall
agree to use the information only for the purpose of making any necessary credit
judgments with respect to this facility and not to use the information in any
manner prohibited by any law, including without limitation, the securities laws
of the United States. The proposed participant or assignee shall agree not to
disclose any of such information except as permitted by this Master Agreement.
The proposed participant or assignee shall further agree to return all documents
or other written material and copies thereof received from any Lender, the Agent
or any Lessee relating to such confidential information unless otherwise
properly disposed of by such entity.
(e) Any Lender may at any time assign all or any portion of
its rights under this Master Agreement and the Notes to a Federal Reserve Bank
without complying with the requirements of paragraph (a) above; provided that no
such assignment shall release such Lender from any of its obligations hereunder.
(f) The Lenders hereby acknowledge and agree that the Lessees
shall have the right to the quiet enjoyment of the Leased Properties pursuant to
the Lease, whether or not a Loan Event of Default that is not an Event of
Default has occurred and is continuing, so long as no Event of Default has
occurred and is continuing.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.1 General Indemnification. Each of DTD and each Lessee,
jointly and severally, agrees, whether or not any of the transactions
contemplated hereby shall be consummated, to assume liability for, and to
indemnify, protect, defend, save and hold harmless
36
each Indemnitee, on an After-Tax Basis, from and against, any and all Claims
that may be imposed on, incurred by or asserted, or threatened to be asserted,
against such Indemnitee, whether or not such Indemnitee shall also be
indemnified as to any such Claim by any other Person (provided that no
Indemnitee shall have the right to double recovery with respect to any Claim)
and whether or not such Claim arises or accrues prior to any Closing Date or
after the Lease Termination Date, or results from such Indemnitee's negligence,
in any way relating to or arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in respect
thereof; or
(b) the purchase, design, construction, preparation,
installation, inspection, delivery, non-delivery, acceptance, rejection,
ownership, management, possession, operation, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition,
substitution, storage, transfer of title, redelivery, use, financing,
refinancing, disposition, operation, condition, sale (including, without
limitation, any sale pursuant to the Lease), return or other disposition of all
or any part of any interest in any Leased Property or the imposition of any
Lien, other than a Lessor Lien (or incurring of any liability to refund or pay
over any amount as a result of any Lien, other than a Lessor Lien) thereon,
including, without limitation: (i) Claims or penalties arising from any
violation or alleged violation of law or in tort (strict liability or
otherwise), (ii) latent or other defects, whether or not discoverable, (iii) any
Claim based upon a violation or alleged violation of the terms of any
restriction, easement, condition or covenant or other matter affecting title to
any Leased Property or any part thereof, (iv) the making of any Alterations in
violation of any standards imposed by any insurance policies required to be
maintained by any Lessee pursuant to the Lease which are in effect at any time
with respect to any Leased Property or any part thereof, (v) any Claim for
patent, trademark or copyright infringement, (vi) Claims arising from any public
improvements with respect to any Leased Property resulting in any charge or
special assessments being levied against any Leased Property or any Claim for
utility "tap-in" fees, and (vii) Claims for personal injury or real or personal
property damage occurring, or allegedly occurring, on any Land, Building or
Leased Property;
(c) the breach or alleged breach (other than a breach
wrongfully alleged by such Indemnitee) by DTD or any Lessee of any
representation or warranty made by it or deemed made by it in any Operative
Document or any certificate required to be delivered by any Operative Document
(without giving effect to any exception in any representation based on the
absence of a Material Adverse Effect);
(d) the retaining or employment of any broker, finder or
financial advisor by DTD or any Lessee to act on its behalf in connection with
this Master Agreement, or the incurring of any fees or commissions to which the
Lessor, the Agent or any Lender might be subjected by virtue of their entering
into the transactions contemplated by this Master Agreement (other than fees or
commissions due to any broker, finder or financial advisor retained by the
Lessor, the Agent or any Lender);
37
(e) the existence of any Lien on or with respect to any Leased
Property, the Construction, any Basic Rent or Supplemental Rent, title thereto,
or any interest therein, including any Liens which arise out of the possession,
use, occupancy, construction, repair or rebuilding of any Leased Property or by
reason of labor or materials furnished or claimed to have been furnished to the
Construction Agent, any Lessee, or any of its contractors or agents or by reason
of the financing of any personalty or equipment purchased or leased by any
Lessee or Alterations constructed by any Lessee;
(f) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section 4975(c)
of the Code;
(g) any act or omission by DTD or any Lessee under any
Purchase Agreement or any other Operative Document, or any breach by DTD or any
Lessee of any requirement, condition, restriction or limitation in any Deed,
Purchase Agreement, IDB Documentation or Ground Lease; or
(h) any IDB Documentation;
provided, however, no Lessee shall be required to indemnify any Indemnitee under
this Section 7.1 for any Claim to the extent that such Claim results from (i)
the willful misconduct or gross negligence of such Indemnitee or (ii) actions or
events occurring after the Lease has terminated and possession of the Leased
Properties has been turned over to a Person other than the Agent, any Funding
Party, DTS or any Affiliate thereof; and, provided, further, that with respect
to each Construction Land Interest, each Lessee's indemnity obligations with
respect to such Leased Property shall be governed by Section 3.3 of the
Construction Agency Agreement during the Construction Term therefor. It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of, and shall be separate and independent
from any other remedy under this Master Agreement, the Lease or any other
Operative Document.
SECTION 7.2 Environmental Indemnity. In addition to and without
limitation of Section 7.1 or Section 3.3 of the Construction Agency Agreement,
each of DTD and each Lessee, jointly and severally, agrees to indemnify, hold
harmless and defend each Indemnitee, on an After-Tax Basis, from and against any
and all claims (including without limitation third party claims for personal
injury or real or personal property damage), losses (including but not limited
to any loss of value of any Leased Property), damages, liabilities, fines,
penalties, charges, suits, settlements, demands, administrative and judicial
proceedings (including informal proceedings and investigations) and orders,
judgments, remedial action, requirements, enforcement actions of any kind, and
all reasonable costs and expenses actually incurred in connection therewith
(including, but not limited to, reasonable attorneys' and/or paralegals' fees
and expenses), including, but not limited to, all costs incurred in connection
with any investigation or monitoring of site conditions or any clean-up,
remedial, removal or restoration work by any federal, state or local government
agency, arising directly or indirectly, in whole or in part, out of
38
(i) the presence on or under any Land of any Hazardous
Materials, or any releases or discharges of any Hazardous Materials on,
under, from or onto any Land,
(ii) any activity, including, without limitation,
construction, carried on or undertaken on or off any Land, and whether
by a Lessee or any predecessor in title or any employees, agents,
contractors or subcontractors of a Lessee or any predecessor in title,
or any other Person, in connection with the handling, treatment,
removal, storage, decontamination, clean-up, transport or disposal of
any Hazardous Materials that at any time are located or present on or
under or that at any time migrate, flow, percolate, diffuse or in any
way move onto or under any Land,
(iii) loss of or damage to any property or the environment
(including, without limitation, clean-up costs, response costs,
remediation and removal costs, cost of corrective action, costs of
financial assurance, fines and penalties and natural resource damages),
or death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and fauna,
and any mitigative action required by or under Environmental Laws, in
each case to the extent related to any Leased Property,
(iv) any claim concerning any Leased Property's lack of
compliance with Environmental Laws, or any act or omission causing an
environmental condition on or with respect to any Leased Property that
requires remediation or would allow any governmental agency to record a
lien or encumbrance on the land records, or
(v) any residual contamination on or under any Land, or
affecting any natural resources on any Land, and to any contamination
of any property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any such
Hazardous Materials on or from any Leased Property; in each case
irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations, codes and
ordinances;
in any case with respect to the matters described in the foregoing clauses (i)
through (v) that arise or occur
(w) prior to or during the Lease Term,
(x) at any time during which a Lessee or any Affiliate thereof
owns any interest in or otherwise occupies or possesses any Leased
Property or any portion thereof, or
(y) during any period after and during the continuance of any
Event of Default until such time as possession of the Leased Properties
has been turned over to a Person other than the Agent, any Funding
Party, DTS or any Affiliate thereof;
39
provided, however, no Lessee shall be required to indemnify any Indemnitee under
this Section 7.2 for any Claim to the extent that such Claim results from the
willful misconduct or gross negligence of such Indemnitee. It is expressly
understood and agreed that the indemnity provided for herein shall survive the
expiration or termination of, and shall be separate and independent from any
other remedy under this Master Agreement, the Lease or any other Operative
Document.
SECTION 7.3 Proceedings in Respect of Claims. With respect to any
amount that a Lessee is requested by an Indemnitee to pay by reason of Section
7.1 or 7.2, such Indemnitee shall, if so requested by such Lessee and prior to
any payment, submit such additional information to such Lessee as such Lessee
may reasonably request and which is in the possession of, or under the control
of, such Indemnitee to substantiate properly the requested payment. In case any
action, suit or proceeding shall be brought against any Indemnitee, such
Indemnitee promptly shall notify DTD of the commencement thereof (provided that
the failure of such Indemnitee to promptly notify DTD shall not affect DTD's or
any Lessee's obligation to indemnify hereunder except to the extent that a
Lessee's rights to contest or defenses otherwise available to such Lessee are
materially prejudiced by such failure), and such Lessee shall be entitled, at
its expense, to participate in, and, to the extent that such Lessee desires to,
assume and control the defense thereof with counsel reasonably satisfactory to
such Indemnitee; provided, however, that such Indemnitee may pursue a motion to
dismiss such Indemnitee from such action, suit or proceeding with counsel of
such Indemnitee's choice at the Lessees' expense; and provided further that a
Lessee may assume and control the defense of such proceeding only if DTD shall
have acknowledged in writing its and each Lessee's obligations to fully
indemnify such Indemnitee in respect of such action, suit or proceeding, Lessees
shall pay all reasonable costs and expenses related to such action, suit or
proceeding as and when incurred and the related Lessee shall keep such
Indemnitee fully apprised of the status of such action suit or proceeding and
shall provide such Indemnitee with all information with respect to such action
suit or proceeding as such Indemnitee shall reasonably request; and, provided
further, that no Lessee shall be entitled to assume and control the defense of
any such action, suit or proceeding if and to the extent that, (A) in the
reasonable opinion of such Indemnitee, (x) such action, suit or proceeding
involves any possibility of imposition of criminal liability or any material
risk of civil liability on such Indemnitee in excess of $5,000,000 or (y) such
action, suit or proceeding will involve a material risk of the sale, forfeiture
or loss of, or the creation of any Lien (other than a Permitted Lien) on any
Leased Property or any part thereof unless the related Lessee or DTD shall have
posted a bond or other security satisfactory to the relevant Indemnitees in
respect to such risk or (z) the control of such action, suit or proceeding would
involve an actual or potential conflict of interest, (B) such proceeding
involves Claims not fully indemnified by the Lessees which the related Lessee
and the Indemnitee have been unable to sever from the indemnified claim(s), or
(C) an Event of Default has occurred and is continuing. The Indemnitee may
participate in a reasonable manner at its own expense and with its own counsel
in any proceeding conducted by a Lessee in accordance with the foregoing.
If a Lessee fails to fulfill the conditions to such Lessee's assuming
the defense of any claim after receiving notice thereof on or prior to the date
that is fifteen (15) days prior to the
40
date that an answer or response is required, the Indemnitee may undertake such
defense, at the Lessees' expense. No Lessee shall enter into any settlement or
other compromise with respect to any Claim in excess of $1,000,000 which is
entitled to be indemnified under Section 7.1 or 7.2 without the prior written
consent of the related Indemnitee, which consent shall not be unreasonably
withheld. Unless an Event of Default shall have occurred and be continuing, no
Indemnitee shall enter into any settlement or other compromise with respect to
any claim which is entitled to be indemnified under Section 7.1 or 7.2 without
the prior written consent of DTD, which consent shall not be unreasonably
withheld, unless such Indemnitee waives its right to be indemnified under
Section 7.1 or 7.2 with respect to such Claim.
Upon payment in full of any Claim by the Lessees pursuant to Section
7.1 or 7.2 to or on behalf of an Indemnitee, the Lessees, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessees and give
such further assurances as are reasonably necessary or advisable to enable the
Lessees vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 7.1 or 7.2
shall be paid to such Indemnitee promptly upon, but in no event later than
thirty (30) days after, receipt of a written demand therefor from such
Indemnitee, accompanied by a written statement describing in reasonable detail
the basis for such indemnity and the computation of the amount so payable.
If for any reason the indemnification provided for in Section 7.1 or
7.2 is unavailable to an Indemnitee or is insufficient to hold an Indemnitee
harmless, then each of DTD and each Lessee agrees to contribute to the amount
paid or payable by such Indemnitee as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by such Indemnitee on the one hand and by DTD and the Lessees
on the other hand but also the relative fault of such Indemnitee as well as any
other relevant equitable considerations. It is expressly understood and agreed
that the right to contribution provided for herein shall survive the expiration
or termination of and shall be separate and independent from any other remedy
under this Master Agreement, the Lease or any other Operative Document.
SECTION 7.4 General Tax Indemnity. (a) Tax Indemnity. Except as
otherwise provided in this Section 7.4, each of DTD and each Lessee, jointly and
severally, shall pay on an After-Tax Basis, and on written demand shall
indemnify and hold each Tax Indemnitee harmless from and against, any and all
fees (including, without limitation, documentation, recording, license and
registration fees), taxes (including, without limitation, income, gross
receipts, sales, rental, use, turnover, value-added, property, excise and stamp
taxes), levies, imposts, duties, charges, assessments or withholdings of any
nature whatsoever, together with any penalties, fines or interest thereon or
additions thereto (any of the foregoing being referred to herein as "Taxes" and
individually as a "Tax" (for the purposes of this Section 7.4, the definition of
"Taxes" includes amounts imposed on, incurred by, or asserted against each Tax
Indemnitee as the result of any
41
prohibited transaction, within the meaning of Section 406 or 407 of ERISA or
Section 4975(c) of the Code, arising out of the transactions contemplated hereby
or by any other Operative Document)) imposed on or with respect to any Tax
Indemnitee, any Lessee, DTD, any Leased Property or any portion thereof or any
Land, or any sublessee or user thereof, by the United States or by any state or
local government or other taxing authority in the United States in connection
with or in any way relating to (i) the acquisition, financing, mortgaging,
construction, preparation, installation, inspection, delivery, non-delivery,
acceptance, rejection, purchase, ownership, possession, rental, lease, sublease,
maintenance, repair, storage, transfer of title, redelivery, use, operation,
condition, sale, return or other application or disposition of all or any part
of any Leased Property or the imposition of any Lien (or incurrence of any
liability to refund or pay over any amount as a result of any Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or earnings arising from or
received with respect to any Leased Property or any part thereof, or any
interest therein or any applications or dispositions thereof, (iii) any other
amount paid or payable pursuant to the Notes or any other Operative Documents,
(iv) any Leased Property, any Land or any part thereof or any interest therein
(including, without limitation, all assessments payable in respect thereof,
including, without limitation, all assessments noted on the related Title
Policy), (v) all or any of the Operative Documents, any other documents
contemplated thereby, any amendments and supplements thereto, and (vi) otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents.
(b) Exclusions from General Tax Indemnity. Section 7.4(a)
shall not apply to:
(i) Taxes on, based on, or measured by or with
respect to net income of the Lessor, the Agent and the Lenders
(including, without limitation, minimum Taxes, capital gains
Taxes, Taxes on or measured by items of tax preference or
alternative minimum Taxes) other than (A) any such Taxes that
are, or are in the nature of, sales, use, license, rental or
property Taxes, and (B) withholding Taxes imposed by the
United States or any state in which Leased Property is located
(i) on payments with respect to the Notes, to the extent
imposed by reason of a change in Applicable Law occurring
after the Initial Closing Date or (ii) on Rent, to the extent
the net payment of Rent after deduction of such withholding
Taxes would be less than amounts currently payable with
respect to the Funded Amounts;
(ii) Taxes on doing business and business privilege,
franchise, capital, capital stock, net worth, gross receipts
or similar Taxes, other than (A) any increase in such Taxes
imposed on such Tax Indemnitee by any state in which Leased
Property is located, net of any decrease in such taxes
realized by such Tax Indemnitee, to the extent that such tax
increase would not have occurred if on each Funding Date the
Lessor and the Lenders had advanced funds to a Lessee or the
Construction Agent in the form of loans secured by the Leased
Property in an amount equal to the Funded Amounts funded on
such Funding Date, with debt service for such loans equal to
the Basic Rent payable on each Payment Date and a principal
balance at the maturity of such loans in a total amount equal
to the Funded Amounts at the end of the Lease Term, or (B) any
Taxes that
42
are or are in the nature of sales, use, rental, license or
property Taxes relating to any Leased Property;
(iii) Taxes that are based on, or measured by, the
fees or other compensation received by a Person acting as
Agent (in its individual capacities) or any Affiliate of any
thereof for acting as trustee under the Loan Agreement;
(iv) Taxes that result from any act, event or
omission, or are attributable to any period of time, that
occurs after the earlier of (A) the expiration of the Lease
Term with respect to any Leased Property and, if such Leased
Property is required to be returned to the Lessor in
accordance with the Lease, such return and (B) the discharge
in full of the Lessees' obligations to pay the Lease Balance,
or any amount determined by reference thereto, with respect to
any Leased Property and all other amounts due under the Lease,
unless such Taxes relate to acts, events or matters occurring
prior to the earlier of such times or are imposed on or with
respect to any payments due under the Operative Documents
after such expiration or discharge;
(v) Taxes imposed on a Tax Indemnitee that result
from any voluntary sale, assignment, transfer or other
disposition or bankruptcy by such Tax Indemnitee or any
related Tax Indemnitee of any interest in any Leased Property
or any part thereof, or any interest therein or any interest
or obligation arising under the Operative Documents, or from
any sale, assignment, transfer or other disposition of any
interest in such Tax Indemnitee or any related Tax Indemnitee,
it being understood that each of the following shall not be
considered a voluntary sale: (A) any substitution, replacement
or removal of any of the Leased Property by any Lessee, (B)
any sale or transfer resulting from the exercise by any Lessee
of any termination option, any purchase option or sale option,
(C) any sale or transfer while an Event of Default shall have
occurred and be continuing under the Lease, and (D) any sale
or transfer resulting from the Lessor's exercise of remedies
under the Lease;
(vi) any Tax which is being contested in accordance
with the provisions of Section 7.4(c), during the pendency of
such contest;
(vii) any Tax that is imposed on a Tax Indemnitee as
a result of such Tax Indemnitee's gross negligence or willful
misconduct (other than gross negligence or willful misconduct
imputed to such Tax Indemnitee solely by reason of its
interest in any Leased Property);
(viii) to the extent any interest, penalties or
additions to tax result in whole or in part from the failure
of a Tax Indemnitee to file a return or pay a Tax that it is
required to file or pay in a proper and timely manner, unless
such failure (A) results from the transactions contemplated by
the Operative Documents in circumstances where Lessee did not
give timely notice to such Tax Indemnitee of such filing or
payment requirement that would have permitted a proper and
timely filing of such return or
43
payment of such Tax, as the case may be, or (B) results from
the failure of Lessee to supply information necessary for the
proper and timely filing of such return or payment of such
Tax, as the case may be, that was not in the possession of
such Tax Indemnitee; and
(ix) as to Lessor, any Tax that results from the
breach by the Lessor of its representation and warranty made
in Section 4.3(g) or as to any Lender the breach of such
Lender of its representation and warranty made in Section
4.4(b).
(c) Contests. If any claim shall be made against any Tax
Indemnitee or if any proceeding shall be commenced against any Tax Indemnitee
(including a written notice of such proceeding) for any Taxes as to which the
Lessees may have an indemnity obligation pursuant to Section 7.4, or if any Tax
Indemnitee shall determine that any Taxes as to which the Lessees may have an
indemnity obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee
shall promptly notify DTD. DTD shall be entitled, at its expense, to participate
in, and, to the extent that DTD desires to, assume and control the defense
thereof; provided, however, that DTD shall have acknowledged in writing its and
each Lessee's obligation to fully indemnify such Tax Indemnitee in respect of
such action, suit or proceeding if the contest is unsuccessful; and, provided
further, that DTD shall not be entitled to assume and control the defense of any
such action, suit or proceeding (but the Tax Indemnitee shall then contest, at
the sole cost and expense of DTD and the Lessees, on behalf of DTD with
representatives reasonably satisfactory to DTD or a Lessee) if and to the extent
that, (A) in the reasonable opinion of such Tax Indemnitee, such action, suit or
proceeding (x) involves any meaningful risk of imposition of criminal liability
or any material risk of material civil liability on such Tax Indemnitee or (y)
will involve a material risk of the sale, forfeiture or loss of, or the creation
of any Lien (other than a Permitted Lien) on any Leased Property or any part
thereof unless DTD or a Lessee shall have posted a bond or other security
satisfactory to the relevant Tax Indemnitees in respect to such risk, (B) such
proceeding involves Claims not fully indemnified by the Lessees which DTD and
the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C)
an Event of Default has occurred and is continuing, (D) such action, suit or
proceeding involves matters which extend beyond or are unrelated to the
Transaction and if determined adversely could be materially detrimental to the
interests of such Tax Indemnitee notwithstanding indemnification by the Lessees
or (E) such action, suit or proceeding involves the federal or any state income
tax liability of the Tax Indemnitee. With respect to any contests controlled by
a Tax Indemnitee, (i) if such contest relates to the federal or any state income
tax liability of such Tax Indemnitee, such Tax Indemnitee shall be required to
conduct such contest only if DTD shall have provided to such Tax Indemnitee an
opinion of independent tax counsel selected by the Tax Indemnitee and reasonably
satisfactory to DTD stating that a reasonable basis exists to contest such claim
or (ii) in the case of an appeal of an adverse determination of any contest
relating to any Taxes, an opinion of such counsel to the effect that such appeal
is more likely than not to be successful, provided, however, such Tax Indemnitee
shall in no event be required to appeal an adverse determination to the United
States Supreme Court. The Tax Indemnitee may participate in a reasonable manner
at its own expense and with its own counsel in any proceeding conducted by DTD
in accordance with the foregoing.
44
Each Tax Indemnitee shall, at DTD's and the Lessees' expense, supply
DTD with such information and documents in such Tax Indemnitee's possession as
are reasonably requested by DTD and are necessary or advisable for DTD to
participate in any action, suit or proceeding to the extent permitted by this
Section 7.4. Unless an Event of Default shall have occurred and be continuing,
no Tax Indemnitee shall enter into any settlement or other compromise with
respect to any Claim which is entitled to be indemnified under this Section 7.4
without the prior written consent of DTD, which consent shall not be
unreasonably withheld, unless such Tax Indemnitee waives its right to be
indemnified under this Section 7.4 with respect to such Claim.
Notwithstanding anything contained herein to the contrary, (a) a Tax
Indemnitee will not be required to contest (and DTD shall not be permitted to
contest except on its own behalf if it is subject thereto) a claim with respect
to the imposition of any Tax if such Tax Indemnitee shall waive its right to
indemnification under this Section 7.4 with respect to such claim (and any
related claim with respect to other taxable years the contest of which is
precluded as a result of such waiver) and (b) no Tax Indemnitee shall be
required to contest any claim if the subject matter thereof shall be of a
continuing nature and shall have previously been decided adversely, unless there
has been a change in law which in the opinion of Tax Indemnitee's counsel
creates substantial authority for the success of such contest. Each Tax
Indemnitee and DTD shall consult in good faith with each other regarding the
conduct of such contest controlled by either.
(d) Reimbursement for Tax Savings. If (x) a Tax Indemnitee
shall obtain a credit or refund of any Taxes paid by DTD or any Lessee pursuant
to this Section 7.4 or (y) by reason of the incurrence or imposition of any Tax
for which a Tax Indemnitee is indemnified hereunder or any payment made to or
for the account of such Tax Indemnitee by DTD or any Lessee pursuant to this
Section 7.4, such Tax Indemnitee at any time realizes a reduction in any Taxes
for which the Lessees are not required to indemnify such Tax Indemnitee pursuant
to this Section 7.4, which reduction in Taxes was not taken into account in
computing such payment by DTD or any Lessee to or for the account of such Tax
Indemnitee, then such Tax Indemnitee shall promptly pay to DTD (xx) the amount
of such credit or refund, together with the amount of any interest received by
such Tax Indemnitee on account of such credit or refund or (yy) an amount equal
to such reduction in Taxes, as the case may be; provided that no such payment
shall be made so long as an Event of Default shall have occurred and be
continuing (but shall be paid promptly after all Events of Default have been
cured) and, provided, further, that the amount payable to DTD by any Tax
Indemnitee pursuant to this Section 7.4(d) shall not at any time exceed the
aggregate amount of all indemnity payments made by DTD and the Lessees under
this Section 7.4 to such Tax Indemnitee with respect to the Taxes which gave
rise to the credit or refund or with respect to the Tax which gave rise to the
reduction in Taxes less the amount of all prior payments made to DTD by such Tax
Indemnitee under this Section 7.4(d). Each Tax Indemnitee agrees to act in good
faith to claim such refunds and other available Tax benefits, and take such
other actions as may be reasonable to minimize any payment due from DTD or the
Lessees pursuant to this Section 7.4. The disallowance or reduction of any
credit, refund or other tax savings with respect to which a Tax Indemnitee has
made a payment to DTD and the Lessees under this Section 7.4(d) shall be treated
as a Tax for which DTD and the Lessees are obligated to indemnify such Tax
Indemnitee hereunder without regard to Section 7.4(b) hereof.
45
(e) Payments. Any Tax indemnifiable under this Section 7.4
shall be paid by DTD or a Lessee directly when due to the applicable taxing
authority if direct payment is practicable and permitted. If direct payment to
the applicable taxing authority is not permitted or is otherwise not made, any
amount payable to a Tax Indemnitee pursuant to Section 7.4 shall be paid within
thirty (30) days after receipt of a written demand therefor from such Tax
Indemnitee accompanied by a written statement describing in reasonable detail
the amount so payable, but not before the date that the relevant Taxes are due.
Any payments made pursuant to Section 7.4 shall be made to the Tax Indemnitee
entitled thereto or DTD, as the case may be, in immediately available funds at
such bank or to such account as specified by the payee in written directions to
the payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee by certified mail, postage prepaid at its
address as set forth in this Master Agreement. Upon the request of any Tax
Indemnitee with respect to a Tax that DTD and the Lessees are required to pay,
DTD shall furnish to such Tax Indemnitee the original or a certified copy of a
receipt for DTD's or a Lessee's payment of such Tax or such other evidence of
payment as is reasonably acceptable to such Tax Indemnitee.
(f) Reports. If DTD or any Lessee knows of any report, return
or statement required to be filed with respect to any Taxes that are subject to
indemnification under this Section 7.4, such Lessee shall, if such Lessee is
permitted by Applicable Law, timely file such report, return or statement (and,
to the extent permitted by law, show ownership of the applicable Leased Property
in such Lessee); provided, however, that if such Lessee is not permitted by
Applicable Law or does not have access to the information required to file any
such report, return or statement, such Lessee will promptly so notify the
appropriate Tax Indemnitee, in which case Tax Indemnitee will file such report.
In any case in which the Tax Indemnitee will file any such report, return or
statement, the related Lessee shall, upon written request of such Tax
Indemnitee, prepare such report, return or statement for filing by such Tax
Indemnitee or, if such Tax Indemnitee so requests, provide such Tax Indemnitee
with such information as is reasonably available to such Lessee.
(g) Verification. At DTD's request, the amount of any
indemnity payment by a Lessee or any payment by a Tax Indemnitee to DTD pursuant
to this Section 7.4 shall be verified and certified by an independent public
accounting firm selected by DTD and reasonably acceptable to the Tax Indemnitee.
Unless such verification shall disclose an error in DTD's favor of 5% or more of
the related indemnity payment, the costs of such verification shall be borne by
DTD. In no event shall DTD or any Lessee have the right to review the Tax
Indemnitee's tax returns or receive any other confidential information from the
Tax Indemnitee in connection with such verification. The Tax Indemnitee agrees
to cooperate with the independent public accounting firm performing the
verification and to supply such firm with all information reasonably necessary
to permit it to accomplish such verification, provided that the information
provided to such firm by such Tax Indemnitee shall be for its confidential use.
The parties agree that the sole responsibility of the independent public
accounting firm shall be to verify the amount of a payment pursuant to this
Master Agreement and that matters of interpretation of this Master Agreement are
not within the scope of the independent accounting firm's responsibilities.
46
SECTION 7.5 Increased Costs, etc.
(a) Illegality. Notwithstanding any other provision herein, if
any change in any Requirement of Law or in the interpretation or application
thereof shall make it unlawful for any Funding Party to make or maintain LIBOR
Advances as contemplated by this Master Agreement, (a) the commitment of such
Funding Party hereunder to continue LIBOR Advance as such and convert Funded
Amounts to LIBOR Advance shall forthwith be cancelled and (b) such Funding
Party's Funded Amounts then outstanding as LIBOR Advance, if any, shall be
converted automatically to Base Rate Advances on the respective last days of the
then current Rent Periods with respect to such Funded Amounts or within such
earlier period as required by law. If any such conversion of a LIBOR Advance
occurs on a day which is not the last day of the then current Rent Period with
respect thereto, each of DTD and each Lessee, jointly and severally, shall pay
to such Funding Party such amounts, if any, as may be required pursuant to
Section 7.5(f).
(b) Requirements of Law. In the event that Eurocurrency
Reserve Requirements or any change in any Requirement of Law or in the
interpretation or application thereof or compliance by any Funding Party with
any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Funding Party to any tax of any
kind whatsoever with respect to this Master Agreement, any
Note or any LIBOR Advance made by it, or change the basis of
taxation of payments to such Funding Party in respect thereof
(except for taxes covered by Section 7.5(d) and changes in
franchise taxes or the rate of tax on the overall net income
of such Funding Party);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Funding Party which is not otherwise
included in the determination of the LIBOR Rate; or
(iii) shall impose on such Funding Party any other
condition; and the result of any of the foregoing is to
increase the cost to such Funding Party, by an amount which
such Funding Party deems to be material, of making, converting
into, continuing or maintaining LIBOR Advances or to reduce
any amount receivable hereunder in respect thereof then, in
any such case, each of DTD and each Lessee, jointly and
severally, shall promptly pay such Funding Party, upon its
demand, any additional amounts necessary to compensate such
Funding Party for such increased cost or reduced amount
receivable. If any Funding Party becomes entitled to claim any
additional amounts pursuant to this subsection, it shall
promptly notify the DTD, through the Agent, of the event by
reason of which it has become so entitled. A certificate as to
any additional amounts payable pursuant to this subsection
submitted by such
47
Funding Party, through the Agent, to the DTD in good faith and
setting forth in reasonable detail the calculation of such
amounts shall be conclusive in the absence of manifest error.
The provisions of this paragraph (b) shall survive the
termination of this Master Agreement and the Lease and the
payment of the Notes and all other amounts payable under the
Operative Documents.
(c) Capital Adequacy. In the event that any Funding Party or
corporation controlling such Funding Party shall have determined that any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Funding Party or such corporation with
any request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date hereof
does or shall have the effect of reducing the rate of return on such Funding
Party's capital as a consequence of its obligations hereunder to a level below
that which such Funding Party could have achieved but for such change or
compliance (taking into consideration such Funding Party's policies with respect
to capital adequacy) by an amount deemed by such Funding Party to be material,
then from time to time, after submission by such Funding Party in good faith to
DTD (with a copy to the Agent) of a written request therefor setting forth in
reasonable detail the calculation of such amount (which request shall be
conclusive in the absence of manifest error), each of DTD and each Lessee,
jointly and severally, shall pay to such Funding Party such additional amount or
amounts as will compensate such Funding Party for such reduction. The provisions
of this paragraph (c) shall survive the termination of this Master Agreement and
the Lease and the payment of the Notes and all other amounts payable under the
Operative Documents.
(d) Taxes. Subject to Section 7.5(e), all payments made by a
Lessee under the Lease and the other Operative Documents shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in the case of
the Agent and each Funding Party, net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or such Funding Party, as the
case may be, as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Agent or such Funding Party (excluding a connection arising solely from the
Agent or such Funding Party having executed, delivered or performed its
obligations or received a payment under, or enforced, this Master Agreement or
any other Operative Document) or any political subdivision or taxing authority
thereof or therein (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "Withholding
Taxes"). If any Withholding Taxes are required to be withheld from any amounts
payable to the Agent or any Funding Party hereunder or under any other Operative
Document, the amounts so payable to the Agent or such Funding Party (so long as
such Funding Party is in compliance with Section 7.5(e), as appropriate) shall
be increased to the extent necessary to yield to the Agent or such Funding Party
(after payment of all Withholding Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in the Operative
Documents. Whenever any Withholding Taxes are payable by a
48
Lessee, as promptly as possible thereafter such Lessee shall send to the Agent
for its own account or for the account of such Funding Party, as the case may
be, a certified copy of an original official receipt received by such Lessee
showing payment thereof. If a Lessee fails to pay any Withholding Taxes when due
to the appropriate taxing authority or fails to remit to the Agent the required
receipts or other required documentary evidence, each of DTD and each Lessee,
jointly and severally, shall indemnify the Agent and the Funding Parties for any
incremental taxes, interest or penalties that may become payable by the Agent or
any Funding Party as a result of any such failure. The agreements in this
subsection shall survive the termination of this Master Agreement and the Lease
and the payment of the Notes and all other amounts payable under the Operative
Documents.
(e) Tax Forms. Each Funding Party to this Master Agreement on
the Initial Closing Date that is not incorporated under the laws of the United
States of America or a state thereof agrees that, on or prior to the Initial
Closing Date, it will deliver to DTD and the Agent two duly completed copies of
(i) United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, and (ii) an Internal Revenue Service Form
W-8 or W-9 or successor applicable form. Each such Funding Party also agrees to
deliver to DTD and the Agent two further copies of the said Form 1001 or 4224
and Form W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to DTD, and such
extensions or renewals thereof as may reasonably be requested by DTD or the
Agent, unless in any such case an event (including, without limitation, any
change in treaty, law or regulation) has occurred prior to the date on which any
such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Funding Party from duly completing and
delivering any such form with respect to it and such Funding Party so advises
DTD and the Agent. Such Funding Party shall certify (i) in the case of a Form
1001 or 4224, that it is entitled to receive payments under the Operative
Documents without deduction or withholding of any United States federal income
taxes and (ii) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax.
(f) Breakage Costs. Each of DTD and each Lessee, jointly and
severally, agrees to indemnify each Funding Party and to hold each Funding Party
harmless from any loss or expense which such Funding Party may sustain or incur
as a consequence of (a) default by a Lessee in payment when due of the principal
amount of or interest on any LIBOR Advance, (b) default by a Lessee in making a
borrowing or conversion after such Lessee or the Construction Agent has given
(or is deemed to have given) a notice in accordance with this Master Agreement,
(c) default by the Construction Agent or a Lessee in making a borrowing of,
conversion into or continuation of LIBOR Advances after a Lessee or the
Construction Agent has given a notice requesting the same in accordance with the
provisions of this Master Agreement, (d) default by a Lessee in making any
prepayment of LIBOR Advances after such Lessee has given a notice thereof in
accordance with the provisions of the Operative Documents or (e) the making of a
prepayment, payment or conversion, of LIBOR Advances on a day which is not the
last day of a Rent Period with respect thereto, including, without limitation,
in each
49
case, any such loss (other than non-receipt of the Applicable Margin or, without
duplication, anticipated profits) or expense arising from the reemployment of
funds obtained by it or from fees payable to terminate the deposits from which
such funds were obtained (it being understood that any such calculation will be
made on notional amounts as the Funding Parties are not required to show that
they matched deposits specifically). A certificate as to any additional amounts
payable pursuant to this subsection submitted by such Funding Party, through the
Agent, to DTD in good faith shall be conclusive in the absence of manifest
error. The provisions of this paragraph (f) shall survive the termination of
this Master Agreement and the Lease and the payment of the Notes and all other
amounts payable under the Operative Documents.
(g) Action of Affected Funding Parties. Each Funding Party
agrees to use reasonable efforts (including reasonable efforts to change the
booking office for its Loans) to avoid or minimize any illegality pursuant to
Section 7.5(a) or any amounts which might otherwise be payable pursuant to
Section 7.5(c) or (d); provided, however, that such efforts shall not cause the
imposition on such Funding Party of any additional costs or legal or regulatory
burdens deemed by such Funding Party to be material and shall not be deemed by
such Funding Party to be otherwise contrary to its policies. In the event that
such reasonable efforts are insufficient to avoid all such illegality or all
amounts that might be payable pursuant to Section 7.5(c) or (d), then such
Funding Party (the "Affected Funding Party") shall use its reasonable efforts to
transfer to any other Funding Party (which itself is not then an Affected
Funding Party) its Loans and Commitment, subject to the provisions of Section
6.2; provided, however, that such transfer shall not be deemed by such Affected
Funding Party, in its sole discretion, to be disadvantageous to it or contrary
to its policies. In the event that the Affected Funding Party is unable, or
otherwise is unwilling, so to transfer its Loans and Commitment, DTD may
designate an alternate lender (reasonably acceptable to the Agent) to purchase
the Affected Funding Party's Loans and Commitment, at par and including accrued
interest, and, subject to the provisions of Section 6.2, the Affected Funding
Party shall transfer its Commitment to such alternate lender and such alternate
lender shall become a Funding Party hereunder. Any fee payable to the Agent
pursuant to Section 6.2 in connection with such transfer shall be for the
account of DTD and the Lessees.
SECTION 7.6 End of Term Indemnity. In the event that at the end of the
Lease Term for the Leased Properties: (i) the related Lessee elects the option
set forth in Section 14.6 of the Lease, and (ii) after the Lessor receives the
sales proceeds from the Leased Properties under Section 14.6 or 14.7 of the
Lease, together with Lessees' payment of the Recourse Deficiency Amount, the
Lessor shall not have received the entire Lease Balance, then, within 90 days
after the end of the Lease Term, the Lessor or the Agent may obtain, at Lessees'
sole cost and expense, a report from the Appraiser (or, if the Appraiser is not
available, another appraiser reasonably satisfactory to the Lessor or the Agent,
as the case may be, and approved by DTD, such approval not to be unreasonably
withheld) in form and substance reasonably satisfactory to the Lessor and the
Agent (the "Report") to establish the reason for any decline in value of the
Leased Properties from the Lease Balance. The Lessees, jointly and severally,
shall promptly reimburse the Lessor for the amount equal to such decline in
value to the extent that the Report indicates that such decline was due to
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(v) during the time while any property was a Leased Property,
extraordinary use, failure to maintain, to repair, to restore, to
rebuild or to replace, failure to comply with all Applicable Laws,
failure to use good workmanship with respect to work performed after
the Closing Date related to such Leased Property, method of
installation or removal or maintenance, repair, rebuilding or
replacement, or any other cause or condition within the power of a
Lessee to control or effect resulting in the Building failing to be of
the type and quality contemplated by the Appraisal (excepting in each
case ordinary wear and tear), or
(w) any Alteration made to, or any rebuilding of, any Leased
Property or any part thereof by any Lessee, or
(x) any restoration or rebuilding carried out by any Lessee or
any condemnation of any portion of any Leased Property pursuant to
Article X of the Lease, or
(y) any use of any Leased Property or any part thereof by any
Lessee other than as permitted by the Lease, or any act or omission
constituting a breach of any requirement, condition, restriction or
limitation set forth in the related Deed or the related Purchase
Agreement, or
(z) the existence or compliance with any IDB Documentation.
ARTICLE VIII.
MISCELLANEOUS
SECTION 8.1 Survival of Agreements. The representations, warranties,
covenants, indemnities and agreements of the parties provided for in the
Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery of this Master Agreement and any of the
Operative Documents, the transfer of any Land to the Lessor as provided herein
(and shall not be merged into any Deed), any disposition of any interest of the
Lessor in any Leased Property, the purchase and sale of the Notes, payment
therefor and any disposition thereof and shall be and continue in effect
notwithstanding any investigation made by any party hereto or to any of the
other Operative Documents and the fact that any such party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Documents.
SECTION 8.2 Notices. Unless otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be addressed to such parties at the addresses therefor as set forth
in Schedule 8.2, or such other address as any such party shall specify to the
other parties hereto, and shall be deemed to have been given (i) the Business
Day after being sent, if sent by overnight courier service; (ii) the Business
Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and
confirmed electronically or otherwise during business hours of a Business Day
(or on the next Business
51
Day if otherwise sent by facsimile and confirmed electronically or otherwise);
or (iv) three Business Days after being sent, if sent by registered or certified
mail, postage prepaid.
SECTION 8.3 Counterparts. This Master Agreement may be executed by the
parties hereto in separate counterparts (including by facsimile), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
SECTION 8.4 Amendments. No Operative Document nor any of the terms
thereof may be terminated, amended, supplemented, waived or modified with
respect to DTD, any Lessee or any Funding Party, except (a) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Lessees, with the written agreement or consent of DTD, and (b) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Funding Parties, with the written agreement or consent of the Required Funding
Parties; provided, however, that
(x) notwithstanding the foregoing provisions of this Section
8.4 or clause (y) below, the consent of each Funding Party affected thereby
shall be required for any amendment, modification or waiver directly:
(i) modifying any of the provisions of this Section
8.4, changing the definition of "Required Funding Parties" or
"Required Lenders", or increasing the Commitment of such
Funding Party;
(ii) amending, modifying, waiving or supplementing
any of the provisions of Section 3 of the Loan Agreement or
the representations of such Funding Party in Section 4.2 or
4.3 or the covenants of such Funding Party in Section 6 of
this Master Agreement;
(iii) reducing any amount payable to such Funding
Party under the Operative Documents or extending the time for
payment of any such amount, including, without limitation, any
Rent, any Funded Amount, any fees, any indemnity, any Leased
Property Balance, the Lease Balance, any Funding Party
Balance, the Recourse Deficiency Amount, interest or Yield; or
(iv) consenting to any assignment of the Lease or the
extension of the Lease Term, releasing any of the collateral
assigned to the Agent and the Lenders pursuant to any Mortgage
and any Assignment of Lease and Rents (but excluding a release
of any rights that the Lenders may have in any Leased
Property, or the proceeds thereof as contemplated in the
definition of "Release Date"), releasing any Lessee from its
obligations in respect of the payments of Rent and the Lease
Balance, releasing DTD from its obligations under the
Operative Documents or changing the absolute and unconditional
character of any such obligation; and
52
(y) no such termination, amendment, supplement, waiver or
modification shall, without the written agreement or consent of the Lessor, the
Agent and the Required Lenders, be made to the Lease or any Security Agreement
and Assignment; and
(z) subject to the foregoing clauses (x) and (y), so long as
no Event of Default has occurred and is continuing, the Lessor, the Agent and
the Lenders may not amend, supplement, waive or modify any terms of the Loan
Agreement, the Notes, the Mortgages and the Assignments of Lease and Rents
without the consent of DTD (such consent not to be unreasonably withheld or
delayed); provided that in no event may any Operative Document be amended so as
to increase the obligations of DTD or any Lessee, or deprive DTD or any Lessee
of any rights thereunder, without the written consent of DTD.
SECTION 8.5 Headings, etc. The Table of Contents and headings of the
various Articles and Sections of this Master Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 8.6 Parties in Interest. Except as expressly provided herein,
none of the provisions of this Master Agreement is intended for the benefit of
any Person except the parties hereto and their respective successors and
permitted assigns.
SECTION 8.7 GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN,
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE.
SECTION 8.8 Expenses. Whether or not the transactions herein
contemplated are consummated, each of DTD and the Lessees, jointly and
severally, agrees to pay, as Supplemental Rent, all actual, reasonable and
documented out-of-pocket costs and expenses of the Lessor, the Agent and the
Lenders in connection with the preparation, execution and delivery of the
Operative Documents and the documents and instruments referred to therein and
any amendment, waiver or consent relating thereto (including, without
limitation, the reasonable fees and disbursements of Xxxxx, Xxxxx & Xxxxx, but
not including any fees and disbursements for any other outside counsel
representing any Lender) and of the Lessor, the Agent and the Lenders in
connection with endeavoring to enforce the Operative Documents and the documents
and instruments referred to therein (including, without limitation, the
reasonable fees actually incurred and disbursements of counsel for the Lessor,
the Agent and the Lenders), unless such enforcement action is finally denied by
a court on the merits. All references in the Operative Documents to "attorneys'
fees" or "reasonable attorneys fees" shall mean reasonable attorneys' fees
actually incurred, without regard to any statutory definition thereof.
SECTION 8.9 Severability. Any provision of this Master Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
53
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 8.10 Liabilities of the Funding Parties: Sharing of Payments.
(a) No Funding Party shall have any obligation to any other
Funding Party or to the Guarantor or any Lessee with respect to the transactions
contemplated by the Operative Documents except those obligations of such Funding
Party expressly set forth in the Operative Documents or except as set forth in
the instruments delivered in connection therewith, and no Funding Party shall be
liable for performance by any other party hereto of such other party's
obligations under the Operative Documents except as otherwise so set forth. No
Lender shall have any obligation or duty to DTD or any Lessee, any other Funding
Parties or any other Person with respect to the transactions contemplated hereby
except to the extent of the obligations and duties expressly set forth in this
Master Agreement or the Loan Agreement.
(b) If any Funding Party shall obtain any payment (whether
voluntary or involuntary, or through the exercise of any right of set-off or
otherwise) on account of the Advances made by it in excess of its ratable share
of payments on account of the Advances obtained by all the Funding Parties, such
Funding Parties shall forthwith purchase from the other Funding Parties such
participations in the Advances owed to them as shall be necessary to cause such
purchasing Funding Party to share the excess payment ratably with each of them,
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Funding Party, such purchase from each
Funding Party shall be rescinded and such Funding Party shall repay to the
purchasing Funding Party the purchase price to the extent of such Funding
Party's ratable share (according to the proportion of (i) the amount of the
participation purchased from such Funding Party as a result of such excess
payment to (ii) the total amount of such excess payment) of such recovery
together with an amount equal to such Funding Party's ratable share (according
to the proportion of (i) the amount of such Funding Party's required repayment
to (ii) the total amount so recovered from the purchasing Funding Party) of any
interest or other amount paid or payable by the purchasing Funding Party in
respect of the total amount so recovered. Each Funding Party agrees that any
Funding Party so purchasing a participation from another Funding Party pursuant
to this Section 8.10 may, to the fullest extent permitted by law, exercise all
its rights of payment (including the right of set-off) with respect to such
participation as fully as if such Funding Party were the direct creditor of such
Funding Party in the amount of such participation.
SECTION 8.11 Submission to Jurisdiction; Waivers. Each party hereto
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Master Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the
State of Georgia sitting in Xxxxxx County, the courts of the United
54
States of America for the Northern District of Georgia, and appellate
courts from any thereof;
(ii) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same; and
(iii) agrees that nothing herein shall affect the right to
effect service of process in any manner permitted by law.
EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS MASTER
AGREEMENT, ANY OTHER OPERATIVE DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
SECTION 8.12 Liabilities of the Agent. The Agent shall have no duty,
liability or obligation to any party to this Master Agreement with respect to
the transactions contemplated hereby except those duties, liabilities or
obligations expressly set forth in this Master Agreement or the Loan Agreement,
and any such duty, liability or obligations of the Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be. All
parties to this Master Agreement acknowledge that the Agent is not, and will not
be, performing any due diligence with respect to documents and information
received pursuant to this Master Agreement or any other Operative Agreement
including, without limitation, any Environmental Audit, Title Policy or survey.
The acceptance by the Agent of any such document or information shall not
constitute a waiver by any Funding Party of any representation or warranty of
DTD or any Lessee even if such document or information indicates that any such
representation or warranty is untrue.
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IN WITNESS WHEREOF, the parties hereto have caused this Master
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
DOLLAR TREE STORES, INC., as Guarantor
By: /s/ Xxxxxxxxx X. Xxxxx
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President, CFO
DOLLAR TREE DISTRIBUTION, INC., as a
Lessee
By: /s/ Xxxxxxxxx X. Xxxxx
Name Printed: Xxxxxxxxx X. Xxxxx
Title: Senior Vice President, CFO
MASTER
AGREEMENT
S-1
ATLANTIC FINANCIAL GROUP, LTD., as
Lessor
By: Atlantic Financial Managers, Inc., its
General Partner
By: /s/ Xxxxxxx Xxxxxxxxxx
Name Printed: Xxxxxxx Xxxxxxxxxx
Title: President
MASTER
AGREEMENT
S-2
CRESTAR BANK, as Agent and as a Lender
By: /s/ Xxxxx X. Xxxx
Name Printed: Xxxxx X. Xxxx
Title: Sr. Vice President
MASTER
AGREEMENT
S-3
