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EXHIBIT 10.53
_________________________________________________________________
_________________________________________________________________
AMENDED AND RESTATED GROUND LEASE AGREEMENT
between
BRAZOS RIVER LEASING L.P.
and
DIAMOND SHAMROCK REFINING AND MARKETING COMPANY
Dated as of December 19, 1996
_________________________________________________________________
_________________________________________________________________
THIS AMENDED AND RESTATED GROUND LEASE AGREEMENT HAS BEEN
ASSIGNED AS SECURITY
FOR INDEBTEDNESS OF BRAZOS RIVER LEASING L.P.
SEE SECTION 18.10
This Amended and Restated Ground Lease Agreement has been manually executed in
10 counterparts, numbered consecutively from 1 through 10, of which this is No.
____. To the extent, if any, that this Amended and Restated Ground Lease
Agreement constitutes chattel
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paper (as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction) no security interest in this Amended and Restated
Ground Lease Agreement may be created or perfected through the transfer or
possession of any counterpart other than the original executed counterpart
which shall be the counterpart identified as counterpart No. 1.
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TABLE OF CONTENTS
AMENDED AND RESTATED GROUND LEASE AGREEMENT
Page
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.01. Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.03. Recitals, Table of Contents, Titles, and Headings . . . . . . . . . . . . . . . . . 9
Section 1.04. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE II REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF DIAMOND SHAMROCK R & M . . . . . . . . . . . . . . . . 10
Section 2.01. Corporate Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.02. Authorization; Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.03. Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.04. Consents, Approvals, Authorizations . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.05. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.06. Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.07. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.08. Delivery of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.09. Compliance with Legal Requirements and Insurance Requirements . . . . . . . . . . . 13
Section 2.10. Agreement for Ground Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE III LEASE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.01. Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.02. Property Leasing Record . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.03. Operating Lease . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV DELIVERY AND ACCEPTANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.01. Acceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.02. Payments Final . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
(i)
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Section 4.03. No Warranties or Representations. . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.04. Indemnity to Title Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 4.05. Quiet Enjoyment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V LEASE TERM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.01. Lease Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 5.02. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VI RENT AND OTHER PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.01. Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.02. Other Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.03. Additional Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.04. Payment in Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.05. Credit Agreement Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VII RESTRICTED USE; COMPLIANCE WITH LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.01. Insurance Requirement and Legal Requirement . . . . . . . . . . . . . . . . . . . . 18
Section 7.02. Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Section 7.03. Compliance with Other Requirements . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.04. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.05. No Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.06. Interference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII MAINTENANCE OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.01. Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.02. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.03. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.04. Environmental Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE IX INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.01. Liability and Property Damage . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.02. Additional Insureds; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 9.03. Application of Proceeds of Loss or Substantial Taking . . . . . . . . . . . . . . . 24
(ii)
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Section 9.04. Application of Proceeds of other than Loss or Substantial Taking . . . . . . . . . 24
Section 9.05. Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 9.06. Application in Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 9.07. Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9.08. Covenant to Keep Insurance in Force . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE X INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.01. Indemnified Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.02. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.03. Continuing Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.04. Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 10.05. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE XI RENEWAL AND TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 11.01. Xxxxxxx Xxxxxxxx R & M's Right to Terminate . . . . . . . . . . . . . . . . . . . . 29
Section 11.02. Brazos' Right to Terminate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 11.03. Xxxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 11.04. Sales to Third Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 11.05. Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 11.06. Termination of Ground Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 11.07. Surrender of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE XII ECONOMIC DISCONTINUANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 12.01. Uneconomic Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 12.02. Uneconomic Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 12.03. Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 12.04. No Right to Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE XIII EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 13.01. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 13.02. Rights Upon Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 13.03. Events of Property Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 13.04. Brazos' Right upon Event of Property Termination . . . . . . . . . . . . . . . . . 40
(iii)
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ARTICLE XIV LOSS OF OR DAMAGE TO PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 14.01. Xxxxxxx Xxxxxxxx R & M's Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 14.02. Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 14.03. Property Damaged Beyond Repair . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE XV CONDEMNATION OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 15.01. Taking of Substantially all of a Property . . . . . . . . . . . . . . . . . . . . . 41
Section 15.02. Taking of Less than Substantially all of a Property . . . . . . . . . . . . . . . . 41
Section 15.03. Grant of Minor Easements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XVI LEASEHOLD INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE XVII PERMITTED CONTESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XVIII MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 18.01. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 18.02. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 18.03. Modifications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 18.04. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 18.05. No Offsets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 18.06. Non-Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 18.07. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 18.08. Usury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 18.09. No Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 18.10. Sale or Assignment by Brazos. . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 18.11. Income Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 18.12. Transfer on As-Is Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 18.13. Right to Perform for Diamond Shamrock R & M. . . . . . . . . . . . . . . . . . . . 51
Section 18.14. Xxxxxx, Consolidation or Sale of Assets. . . . . . . . . . . . . . . . . . . . . . 51
Section 18.15. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 18.16. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 18.17. Rule Against Perpetuities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 18.18. Reexecution. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
(iv)
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List of Exhibits
Exhibit A Schedule of Insurance
(v)
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AMENDED AND RESTATED GROUND LEASE AGREEMENT
THIS AMENDED AND RESTATED GROUND LEASE AGREEMENT (this "Ground Lease")
is made and entered into as of December 19, 1996, by and between BRAZOS RIVER
LEASING L.P., a Texas limited partnership ("Brazos"), and DIAMOND SHAMROCK
REFINING AND MARKETING COMPANY, a Delaware corporation ("Diamond Shamrock R &
M").
W I T N E S S E T H:
WHEREAS, this Ground Lease is an amendment and restatement of that
certain Ground Lease Agreement dated as of October 30, 1992, as amended, among
Brazos and Diamond Shamrock R & M; and
WHEREAS, Brazos may hereafter acquire fee or leasehold interests in
certain parcels of real property; and
WHEREAS, on or about the date of this Ground Lease Brazos and Diamond
Shamrock R & M entered into an Amended and Restated Agreement for Ground Lease,
providing for the acquisition of the fee or leasehold interests in such parcels
of real property from time to time; and
WHEREAS, Diamond Shamrock R & M wishes to lease or sublease such
property under the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and other valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Brazos and Diamond Shamrock R & M hereby agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Defined Terms. For the purposes of this Agreement
each of the following terms shall have the meaning specified with respect
thereto:
"ABR Borrowings" means all borrowings by Brazos under a Credit
Agreement which bear interest based on an alternate base rate of interest
specified by a lender under such Credit Agreement.
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"Acquired Ground Lease" means each ground lease entered into by Brazos
under which a leasehold interest in a Property is being leased to Brazos by the
owner of such Property.
"Acquisition Cost" means for any Property, the sum of the amount of
the advances made pursuant to the Agreement for Ground Lease with respect to
such Property.
"Additional Rent" has the meaning set forth in Section 6.03 hereof.
"Affiliate" means any other person controlling, controlled by or under
direct or indirect common control with any Person. For the purposes of this
definition, "control," when used with respect to any specified Person, means
the power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agreement for Ground Lease" means the Amended and Restated Agreement
for Ground Lease, dated of even date herewith, between Brazos and Diamond
Shamrock R & M providing for the acquisition of each Property, as it may be
further amended, restated, modified or supplemented, from time to time, in
accordance with the terms thereof.
"Assignee" means any lender or agent for a lender under a Credit
Agreement and each person, firm, corporation or other entity to which any part
of Brazos' interest under this Ground Lease or in any Property shall at the
time have been assigned, conditionally or otherwise, by Brazos.
"Assignment" means each assignment or security agreement referred to
in Section 18.10 hereof between Brazos and a third party, pursuant to which
Brazos assigns or grants a security interest in any of its rights under this
Ground Lease to such third party, as from time to time amended.
"Basic Rent" means, with respect to any Property, for each calendar
month the amount computed by multiplying the following:
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(i) the Acquisition Cost of such Property as of the Effective Date
with respect to the initial Basic Rent Payment Date and
thereafter, as of the preceding Basic Rent Payment Date, by
(ii) a fraction having a numerator equal to the number of days in
such month and a denominator of 360, by
(iii) the Brazos Margin plus (A) if no Federal Funds Borrowings, ABR
Borrowings or CD Borrowings will be outstanding during the
Computation Period (as defined below) the weighted average
percentage cost per annum of LIBOR Borrowings outstanding at
any time during the period from the first day of the month to
and including the last day of the month (the "Computation
Period") for which Basic Rent is being computed, or (B) if no
LIBOR Borrowings, ABR Borrowings or CD Borrowings will be
outstanding during the Computation Period, the weighted
average cost per annum of Federal Funds Borrowings, or (C) if
no LIBOR Borrowings, Federal Funds Borrowings or CD Borrowings
will be outstanding during the Computation Period, the
weighted average cost per annum of ABR Borrowings, or (D) if
no LIBOR Borrowings, Federal Funds Borrowings or ABR
Borrowings will be outstanding during the Computation Period,
the weighted average cost per annum of CD Borrowings, or (E)
if any two or more of LIBOR Borrowings, Federal Funds
Borrowings, ABR Borrowings or CD Borrowings will be
outstanding at any time during the Computation Period, a
blended rate based on the calculations referred to in clauses
(A), (B), (C) and (D) above,
plus, on the first Basic Rent Payment Date for which Basic Rent is due with
respect to such Property, an additional amount computed by multiplying (i) and
(iii) above by a fraction having a numerator equal to the number of days from
the Effective Date of such Property to the first Basic Rent Payment Date for
which Basic Rent is due with respect to such Property and a denominator of 360,
plus, on the first Basic Rent Payment Date which follows a month in which the
Acquisition Cost was changed pursuant to Section 3.02(b) hereof prior to the
last two Business Days of such month, an
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additional amount computed by multiplying (a) the difference between the
Acquisition Cost on the Basic Rent Payment Date and the Acquisition Cost on the
day immediately preceding the day the Acquisition Cost was changed and (b) the
rate in (iii) above by a fraction having a numerator equal to the number of
days from the date of the advance which changed the Acquisition Cost pursuant
to Section 3.02(b) hereof to such Basic Rent Payment Date and a denominator of
360, and plus, on the second Basic Rent Payment Date which follows a month in
which the Acquisition Cost was changed pursuant to Section 3.02(b) hereof
within the last two Business Days of such month, an additional amount computed
by multiplying (a) the difference between the Acquisition Cost on the Basic
Rent Payment Date and the Acquisition Cost on the day immediately preceding the
day the Acquisition Cost was changed and (b) the rate in (iii) above by a
fraction having a numerator equal to the number of days from the date of the
advance which changed the Acquisition Cost pursuant to Section 3.02(b) hereof
to such Basic Rent Payment Date and a denominator of 360. If any Federal Funds
Borrowings are not converted to LIBOR Borrowings, ABR Borrowings or CD
Borrowings on a Basic Rent Payment Date on which rent is due for such Property,
or if any LIBOR Borrowings or CD Borrowings relating to such Property is
subject to an Interest Period (as defined in the Credit Agreement) which is due
to expire prior to the next Basic Rent Payment Date, the cost per annum of
Federal Funds Borrowings, the relevant LIBOR Borrowings, ABR Borrowings or CD
Borrowings two Business Days prior to such Basic Rent Payment Date shall be
used for purposes of calculating the weighted average cost per annum of Federal
Funds Borrowings, the relevant LIBOR Borrowings, ABR Borrowings or CD
Borrowings pursuant to (iii) above for the month. If the actual weighted
average cost per annum of Federal Funds Borrowings, the relevant LIBOR
Borrowings, ABR Borrowings or CD Borrowings for such month is lower than the
weighted average cost per annum of Federal Funds Borrowings, the relevant LIBOR
Borrowings, ABR Borrowings or CD Borrowings calculated as provided in the
previous sentence, the amount of Basic Rent which Diamond Shamrock R & M
overpaid shall be credited towards Basic Rent on the following Basic Rent
Payment Date and, if the actual weighted average cost per annum of Federal
Funds Borrowings, the relevant LIBOR Borrowings, ABR Borrowings or CD
Borrowings for such month is higher than the weighted average cost per annum of
Federal Funds Borrowings, the relevant LIBOR Borrowings, ABR Borrowings or CD
Borrowings calculated as provided in the previous sentence, the amount of Basic
Rent which Diamond Shamrock R & M underpaid shall
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be paid by Xxxxxxx Xxxxxxxx R & M on the following Basic Rent Payment Date.
"Basic Rent Payment Date" means the twentieth (20) day of any calendar
month during the Lease Term or Renewal Term of any Property or, if such day is
not a Business Day, the next succeeding Business Day.
"Brazos" means Brazos River Leasing L.P. or any successor or
successors to all of its rights and obligations hereunder and, for purposes of
Section 10.01(c), shall include any corporation, trust, individual, partnership
or other person or entity which computes its liability for income or other
taxes on a consolidated basis with Brazos or the income of which for purposes
of such taxes is determined or affected directly or indirectly by the income of
Brazos or its successor or successors.
"Brazos Margin" means the margin specified and calculated in
accordance with the letter from Brazos to Diamond Shamrock R & M dated of even
date herewith.
"Business Day" means a day other than a Saturday, Sunday or other day
on which commercial banks in Dallas, Texas are authorized or required by law to
close.
"CD Borrowings" means all borrowings by Brazos under a Credit
Agreement which bear interest based on the interest rate of certificates of
deposit of a lender under such Credit Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Consent" means each consent of Diamond Shamrock R & M or Guarantor to
an Assignment, pursuant to which, among other things, Diamond Shamrock R & M or
Guarantor, as the case may be, consents to the terms of such Assignment insofar
as they relate to this Ground Lease, as from time to time amended.
"Credit Agreement" means each credit or loan agreement among Brazos,
an agent for lenders, and a lender or lenders related to the financing of
Property, as it may be amended, restated, modified or supplemented, from time
to time.
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"Diamond Shamrock R & M" has the meaning set forth in the first
paragraph of this Ground Lease.
"Effective Date" means with respect to any Property, the date on which
such Property is leased hereunder by Xxxxxx to Xxxxxxx Xxxxxxxx R & M, as
evidenced by a Property Leasing Record.
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation (including claims or proceedings under the
Occupational Safety and Health Acts or similar laws or requirements relating to
health or safety of employees) which seeks to impose liability under any
Environmental Law.
"Environmental Law" means all Legal Requirements arising from,
relating to, or in connection with the Environment (as defined in 43 U.S.C.
Section 9601(8) (1988)), health, or safety, including without limitation (i)
the Comprehensive Environmental Response, Compensation, and Liability Act of
1980, as amended, and (ii) Legal Requirements relating to (a) pollution,
contamination, injury, destruction, loss, protection, cleanup, reclamation or
restoration of the air, surface water, groundwater, land surface or subsurface
strata, or other natural resources; (b) solid, gaseous or liquid waste
generation, treatment, processing, recycling, reclamation, cleanup, storage,
disposal or transportation; (c) exposure to pollutants, contaminants, hazardous
materials or wastes; (d) the safety or health of employees; or (e) the
manufacture, processing, handling, transportation, distribution in commerce,
use, storage or disposal of hazardous, medical, infectious, or toxic
substances, materials or waste.
"Event of Default" has the meaning set forth in Section 13.01 hereof.
"Event of Property Termination" means any of the events specified in
Section 13.03.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and all regulations promulgated by the Securities and Exchange Commission
thereunder.
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"Facility" means all improvements of whatever kind or character now or
hereafter located on, in or under or affixed to an individual Property,
including, without limitation, any utilities, storage tanks, paving, signage or
lighting, and all fixtures, furniture and equipment installed in such
improvements, and all additions, replacements and subsequent replacements
thereof, but excluding all parcels of land on which such Facility sits.
"Facilities Lease" means, with respect to any Facility, the
facilities lease by and between Brazos, as lessor, and Diamond Shamrock R & M,
as lessee.
"Federal Funds Borrowings" means all borrowings by Brazos under a
Credit Agreement which bear interest based on the Federal funds rate announced
by a lender under such Credit Agreement.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ground Lease" means this Amended and Restated Ground Lease Agreement
and each Property Leasing Record.
"Guarantor" means Ultramar Diamond Shamrock Corporation, a Delaware
corporation having its principal office at 0000 Xxxxxxxxx Xxxxxxxxx, Xxx
Xxxxxxx, Xxxxx 00000, and its successors.
"Guaranty" means the Guaranty Agreement, dated December 19, 1996, by
and between the Guarantor and Brazos, as it may be further amended, restated,
modified or supplemented, from time to time, in accordance with the terms
thereof.
"Indebtedness" for any Person, means (a) indebtedness of such Person
for borrowed money; (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) obligations of such Person
to pay the deferred purchase price of property or services; (d) obligations of
such Person as lessee under capital leases; (e) reimbursement obligations in
respect of bonds or letters of credit; (f) obligations of such Person under
direct or indirect guaranties in respect of, and obligations (contingent or
otherwise) of such Person to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect
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of, indebtedness or obligations of others of the kinds referred to in clauses
(a) through (e) above; (g) indebtedness or obligations of others of the kinds
referred to in clauses (a) through (f) secured by any Lien on or in respect of
any property of such Person whether or not assumed by such Person; and (h) all
liabilities of such Person in respect of unfunded vested benefits under any
Plan; provided, however, that all trade accounts payable incurred in the
ordinary course of business of such Person and not overdue shall be excluded
from the foregoing.
"Indemnified Person" has the meaning set forth in Section 10.01
hereof.
"Insurance Requirements" means all requirements of this Ground Lease
with respect to insurance, all terms of any insurance policy covering or
applicable to any Property, all requirements of the issuer of any such policy,
all statutory requirements and all orders, rules, regulations and other
requirements of any governmental body related to insurance applicable to any
Property.
"Lease Term" has the meaning set forth in Section 5.01 hereof.
"Legal Requirements" means all laws, judgments, decrees, ordinances
and regulations and any other governmental rules, orders and determinations and
all requirements having the force of law, now or hereinafter enacted, made or
issued, whether or not presently contemplated, and all agreements, covenants,
conditions and restrictions, applicable to each Property and/or the ownership,
operation or use thereof, including, without limitation, all requirements of
the Americans With Disabilities Act (P.L. 101-335) and environmental statutes,
compliance with which is required at any time during the Lease Term and any
Renewal Term, whether or not such compliance shall require structural,
unforeseen or extraordinary changes to any Property or the operation, occupancy
or use thereof.
"LIBOR Borrowings" means all borrowings by Brazos under a Credit
Agreement which bear interest based on the per annum rate of interest at which
Dollar deposits are offered by major banks in the London inter-bank market.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or
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preference, priority or other security agreement or preferential arrangement of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Lien of Record" means, with the exception of the Lien of a lender or
lender's agent under a Credit Agreement, any mechanics' or materialmen's lien
for which Diamond Shamrock R & M does not hold retainage or trapped funds in
amounts required by applicable law, lien securing the payment of taxes,
assessments or governmental charges and levies which are due, payable and
delinquent, judgment lien or any other filed, recorded, or docketed matter
(whether or not the same shall constitute a Permitted Encumbrance or be the
subject of a Permitted Contest) which (a) may result in a sale for satisfaction
of same, a loss, forfeiture, reversion of title, or right of reentry with
respect to any Property or (b) whether or not valid, is reasonably likely to
interfere with the due and timely payment of any sum payable or the exercise of
any of the rights or the performance of any of the duties or responsibilities
of Diamond Shamrock R & M under this Ground Lease.
"Maximum Rate" has the meaning set forth in Section 18.08 hereof.
"Permitted Contest" has the meaning set forth in paragraph (a) of
Article XVII hereof.
"Permitted Encumbrances" means the following Liens and other matters
affecting the title or leasehold interest of any Property: (a) mechanics' and
materialmen's liens incurred in good faith in the ordinary course of business
and securing obligations that are junior to any Liens of Assignee not exceeding
$200,000 in the aggregate which are not yet due or which are subject to a
Permitted Contest; (b) Liens securing the payment of taxes, assessments and
governmental charges or levies, either not delinquent or subject to a Permitted
Contest; (c) zoning and planning restrictions, subdivision and platting
restrictions, easements, rights-of-way, licenses, reservations, covenants,
conditions, waivers, restrictions on the use of property, minor encroachments
or minor irregularities of title which do not materially impair (i) the
intended use of the Property by Diamond Shamrock R & M or (ii) the
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value of any Property; (d) reservations of mineral interests, provided that the
holders of such mineral reservations shall have waived the right to, or
otherwise be precluded from entering on the Property for the purpose of
removing or extracting such minerals; (e) the lien created contemporaneously
with the acquisition of such Property pursuant to, and securing the obligations
under, a Credit Agreement; (f) any mechanics' or materialmen's lien for which
Diamond Shamrock R & M holds retainage or trapped funds in amounts required by
and in accordance with applicable law; and (g) any other matters, provided that
such other or additional matters shall be approved in writing by Xxxxxx and
Assignee, whose approval shall not be unreasonably withheld or delayed.
"Person" means an individual, partnership, corporation, business
trust, joint venture, joint stock company, trust, unincorporated association or
Governmental Authority or other entity of whatever nature.
"Potential Default" means any event which, but for the lapse of time,
or giving of notice, or both, would constitute an Event of Default.
"Potential Property Termination" means any event which, but for the
lapse of time, or giving of notice, or both, would constitute an Event of
Property Termination.
"Property" means any and all parcels of land leased or to be leased
hereunder and when leased, evidenced by Property Leasing Records and the
respective easements, rights and appurtenances relating to such parcels of
land, but excluding all Facilities.
"Property Leasing Record" means an instrument evidencing the ground
lease or sublease of a Property under this Ground Lease, as prepared and
executed by Xxxxxx, as lessor or sublessor, accepted and executed by Xxxxxxx
Xxxxxxxx R & M, as xxxxxx or sublessee.
"Renewal Term" has the meaning set forth in Section 11.03 hereof.
"Reports" has the meaning set forth in Section 2.05 hereof.
"Residual Guaranty Payment Support" means the Residual Guaranty
Payment Support dated of even date herewith entered into
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by Guarantor, as it may be restated, amended or supplemented from time to time.
"Revised Property Leasing Record" means a Property Leasing Record
executed under the terms of Section 3.02(b) hereof.
"Uneconomic Notice" has the meaning set forth in Section 12.01 hereof.
"Uneconomic Property" has the meaning set forth in Section 12.01
hereof.
"Unitary Method of Taxation" means a method of taxation under which
the business income of individual corporations in a commonly controlled
enterprise which may be deemed to operate in the same general line of business
as a corporation or corporations subject to a state's taxing jurisdiction is
aggregated regardless of whether the individual corporations have a tax nexus
with, or presence in, such state and is then apportioned to such state based on
an apportionment formula.
Section 1.02. Forms. All forms specified by the text hereof or by
reference to exhibits attached hereto shall be substantially as set forth
herein, subject to such changes by Brazos and Diamond Shamrock R & M by mutual
consent that do not alter the substantive rights of the parties hereto or of
the Assignees or as may be required by applicable laws hereafter enacted.
Section 1.03. Recitals, Table of Contents, Titles, and Headings. The
terms and phrases used in the recitals of this Ground Lease have been included
for convenience of reference only and the meaning, construction, and
interpretation of such words and phrases for purposes of this Ground Lease
shall be determined solely by reference to Section 1.01 hereof. The table of
contents, titles, and headings of the Articles and Sections of this Ground
Lease have been inserted for convenience of reference only and are not to be
considered a part hereof and shall not in any way modify or restrict any of the
terms or provisions hereof and shall not be considered or given any effect in
construing this Ground Lease or any provision hereof or in ascertaining intent,
if any question of intent should arise.
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Section 1.04. Interpretation. Unless the context requires otherwise,
words of the masculine gender shall be construed to include correlative words
of the feminine and neuter genders and vice versa, and words of the singular
number shall be construed to include correlative words of the plural number and
vice versa. This Ground Lease, and all the terms and provisions hereof, shall
be liberally construed to effect the purposes set forth herein and to sustain
the validity of this Ground Lease.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF
DIAMOND SHAMROCK R & M
Diamond Shamrock R & M represents and warrants to Xxxxxx and agrees as
follows:
Section 2.01. Corporate Matters. Diamond Shamrock R & M (i) has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, (ii) has full corporate power and
authority to own and operate its properties and to conduct its business as
presently conducted and full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Ground Lease, the
Agreement for Ground Lease and any Consent, and (iii) is duly qualified to do
business as a foreign corporation in good standing in each jurisdiction,
including, without limitation, the States of Arizona, Arkansas, Colorado,
Kansas, Louisiana, New Mexico, Oklahoma and Texas, in which its ownership or
leasing of properties or the conduct of its business requires such
qualification and where non-qualification, singly or in the aggregate, would
materially adversely affect the financial condition or creditworthiness of
Diamond Shamrock R & M, or would impair the ability of Diamond Shamrock R & M
to perform its obligations under this Ground Lease or under the Agreement for
Ground Lease.
Section 2.02. Authorization; Binding Agreement. This Ground Lease has
been duly authorized, executed and delivered by Xxxxxxx Xxxxxxxx R & M and,
assuming the due authorization, execution and delivery of this Ground Lease by
Brazos, this Ground Lease is a legal, valid and binding obligation of Diamond
Shamrock R & M, enforceable according to its terms, subject, as to
enforceability,
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to applicable bankruptcy, insolvency and similar laws affecting creditors'
rights generally and to general principles of equity (regardless of whether
enforcement is sought in a proceeding in equity or at law).
Section 2.03. Power and Authority. The consummation of the
transactions herein contemplated and the performance and observance of Diamond
Shamrock R & M's obligations under this Ground Lease and any Consent have been
duly authorized by all necessary corporate action on the part of Diamond
Shamrock R & M. The execution, delivery and performance by Xxxxxxx Xxxxxxxx R
& M of this Ground Lease and any Consent will not result in any violation of
any term of the certificate of incorporation or the by-laws of Diamond Shamrock
R & M, do not require stockholder approval or the approval or consent of any
trustee or holders of Indebtedness of Diamond Shamrock R & M except such as
have been obtained prior to the date hereof and will not conflict with or
result in a breach of any terms or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien (other than a
Permitted Encumbrance on any Property as may be contemplated herein) upon any
property or assets of Diamond Shamrock R & M under, any indenture, mortgage or
other agreement or instrument to which Diamond Shamrock R & M is a party or by
which it or any of its property is bound where breach or default, singly or in
the aggregate, could materially adversely affect (i) the financial condition or
creditworthiness of Diamond Shamrock R & M or (ii) its ability to perform its
obligations under the Agreement for Ground Lease, this Ground Lease, the
Facilities Lease or the Agreement for Facilities Lease referred to in the
Facilities Lease or the Consent executed by Xxxxxxx Xxxxxxxx R & M of even date
herewith, or any existing applicable law, rule, regulation, license, judgment,
order or decree of any Governmental Authority or court having jurisdiction over
Diamond Shamrock R & M or any of its activities or properties
Section 2.04. Consents, Approvals, Authorizations. There are no
consents, licenses, orders, authorizations or approvals of, or notices to or
registrations with, any Governmental Authority which are required in connection
with the valid execution, delivery and performance of this Ground Lease that
have not been obtained or made, except such permits and licenses as Diamond
Shamrock R & M will be required to obtain for the occupancy, use or operation
of a Property and which, in the ordinary course of business, are not obtained
until just prior to the commencement of such occupancy,
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use or operation, and any such consents, licenses, orders, authorizations,
approvals, notices and registrations that have been obtained or made are in
full force and effect.
Section 2.05. Financial Statements. Diamond Shamrock R & M has caused
to be furnished to Brazos copies of Guarantor's most recent Annual Report on
Form 10-K and each subsequent Quarterly Report on Form 10-Q (the "Reports").
The financial statements contained in such documents fairly present the
financial position, results of operations and changes in financial position of
Guarantor as of the dates and for the periods indicated therein and comply with
all requirements of the Exchange Act.
Section 2.06. Changes. Since the date of the most recent Annual
Report on Form 10-K delivered pursuant to Section 2.05, there has been no
adverse change in the financial condition or business of Diamond Shamrock R & M
or the Guarantor which would materially impair the ability of Diamond Shamrock
R & M to perform its obligations under this Ground Lease or which would
materially impair the ability of the Guarantor to perform its obligations under
the Guaranty or the Residual Guaranty Payment Support.
Section 2.07. Litigation. Except as disclosed in the Reports, there
is no action, suit, proceeding or investigation at law or in equity by or
before any court, governmental body, agency, commission or other tribunal now
pending or, to the best knowledge of Diamond Shamrock R & M after due inquiry,
threatened against or affecting Diamond Shamrock R & M or the Guarantor or any
property or rights of Diamond Shamrock R & M or the Guarantor, which affects
any Property, as to which there is a significant possibility of an adverse
determination, and which if adversely determined, may have a material adverse
impact on the financial condition or business of Diamond Shamrock R & M or the
Guarantor or which, if adversely determined, could materially impair the
ability of Diamond Shamrock R & M to perform its obligations hereunder or of
the Guarantor to perform its obligations under the Guaranty or the Residual
Guaranty Payment Support, or which, if adversely determined, may have a
material adverse impact on the value or intended use of a Property and there is
no action, suit, proceeding or investigation at law or in equity by or before
any court, governmental body, agency, commission or other tribunal now pending
or, to the best knowledge of Diamond Shamrock R & M after due inquiry,
threatened which questions or would question the validity of this Ground Lease.
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Section 2.08. Delivery of Information. Diamond Shamrock R & M shall
deliver to Brazos from time to time, (i) promptly upon filing under the
Exchange Act or mailing to shareholders, copies of the Guarantor's Annual
Reports on Form 10-K, the Guarantor's Quarterly Reports on Form 10-Q and any
other reports the Guarantor files under the Exchange Act, and any report or
mailing made to Guarantor's shareholders, (ii) promptly upon request, such
other information with respect to Diamond Shamrock R & M's and the Guarantor's
operations, business, property, assets or financial condition as Brazos shall
reasonably request, (iii) promptly after an officer of Diamond Shamrock R & M
obtains knowledge of any Event of Default or Event of Property Termination
hereunder or of any Potential Default or Potential Property Termination, a
certificate of an officer of Diamond Shamrock R & M specifying the nature and
period of existence of such Event of Default, Event of Property Termination,
Potential Default or Potential Property Termination, and what action, if any,
Diamond Shamrock R & M has taken, is taking, or proposes to take with respect
thereto, (iv) promptly after an officer of Diamond Shamrock R & M obtains
knowledge of any material adverse change in the financial condition or business
of Diamond Shamrock R & M or Guarantor or of any litigation of the type
described in Section 2.07, a certificate of an officer of Diamond Shamrock R &
M describing such change or litigation as the case may be, (v) promptly after
Diamond Shamrock R & M obtains knowledge of any and all Liens, other than
Permitted Encumbrances, on, or other matters, including any litigation
affecting a Property, which may materially adversely affect the value or
intended use of, any Property, a detailed statement describing each such Lien
or other matter and (vi) promptly after Diamond Shamrock R & M obtains
knowledge of any Environmental Claim, a detailed statement describing such
Environmental Claim and what action, if any, Diamond Shamrock R & M has taken,
is taking, or proposes to take with respect thereto.
Section 2.09. Compliance with Legal Requirements and Insurance
Requirements. The operation, use and physical condition of the Property comply
in all material respects with the Insurance Requirements and are in full
compliance with all Legal Requirements, except (a) in the case of Legal
Requirements with respect to laws affecting the environment, to the extent
non-compliance was not the result of willful disregard of a Legal Requirement
by Diamond Shamrock R & M and Diamond Shamrock R & M acts diligently to cure
such non-compliance upon becoming aware of
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it or (b) any Legal Requirement the non-compliance with which, individually or
in the aggregate, (i) unless any criminal liability could result from a failure
to comply therewith, could not reasonably be expected to cause either Brazos or
any Assignee to incur civil liability for which Brazos and any Assignee are not
adequately indemnified (Diamond Shamrock R & M's obligations under Article X of
this Ground Lease shall be deemed to be adequate indemnification if no Event of
Default, Event of Property Termination, Potential Default or Potential Property
Termination exists and if such civil liability is reasonably likely to be less
than $500,000 per Property and $1,000,000 in the aggregate for all Properties),
(ii) will not result in a material diminution in the value of any Property,
(iii) is consistent with business practices normal in the industry of Diamond
Shamrock R & M, (iv) shall not involve any material danger that any Property
would be subject to sale, forfeiture or loss, as a result of failure to comply
therewith, and (v) is permitted under the provisions of the Acquired Ground
Lease, if any, on such Property.
Section 2.10. Agreement for Ground Lease. Each Property leased
pursuant to the Agreement for Ground Lease was acquired and leased in
accordance with the terms of the Agreement for Ground Lease. The
representations and warranties of Diamond Shamrock R & M in the Agreement for
Ground Lease are true and correct in all material respects.
ARTICLE III
LEASE OF PROPERTY
Section 3.01. Lease. Subject to the terms and conditions hereof,
Brazos shall lease to Diamond Shamrock R & M, and Diamond Shamrock R & M shall
lease from Brazos pursuant to this Ground Lease, or sublease in the case of an
Acquired Ground Lease, any Property, when Brazos makes an advance under the
Agreement for Ground Lease with respect to such Property and such Property is
acquired under the Agreement for Ground Lease, or if no advance is made with
respect to a Property under an Acquired Ground Lease, when Xxxxxx enters into
such Acquired Ground Lease. The Effective
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Date of the lease or sublease of each Property shall be the date such Property
is acquired by or leased to Brazos, as applicable, pursuant to the foregoing.
Section 3.02. Property Leasing Record.
(a) The lease of each Property shall be evidenced by a Property
Leasing Record, or if the terms of (b) or (c) below apply, a Revised Property
Leasing Record. Each Property Leasing Record shall give a full legal
description of the Property covered thereby, the Acquisition Cost of such
Property, the Lease Term for such Property, the location of such Property and
such other details as Brazos, Diamond Shamrock R & M and any Assignee may from
time to time agree. Diamond Shamrock R & M shall provide to Brazos the
information necessary to describe in the Property Leasing Record the Property,
except that Brazos shall provide, pursuant to the terms hereof, the Acquisition
Cost and the Lease Term. Execution and delivery by Diamond Shamrock R & M of a
Property Leasing Record shall constitute (i) acknowledgment by Diamond Shamrock
R & M that the Property specified in such Property Leasing Record has been
delivered to Diamond Shamrock R & M in good condition and has been accepted for
lease hereunder by Xxxxxxx Xxxxxxxx R & M as of the Effective Date of the
Property Leasing Record, (ii) acknowledgment by Diamond Shamrock R & M that the
Property specified in such Property Leasing Record is subject to all of the
covenants, terms and conditions of this Ground Lease, and (iii) certification
by Diamond Shamrock R & M that the representations and warranties contained in
Article II of this Ground Lease are true and correct in all material respects
on and as of the Effective Date of the Property Leasing Record as though made
on and as of such date and that there exists on such date no Event of Default,
Event of Property Termination, Potential Default or Potential Property
Termination.
(b) Upon the making of a Reconciliation Advance or Additional Advance
(as such terms are defined in the Agreement for Ground Lease) for a Property,
Brazos and Diamond Shamrock R & M shall execute a Revised Property Leasing
Record to reflect the change in Acquisition Cost for such Property caused by
such advance.
(c) Upon the release or disposition of a Property or any
portion thereof and the application of proceeds therefrom in accordance with
Section 9.1(a)(viii) of the Credit Agreement,
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Brazos and Diamond Shamrock R & M shall execute a Revised Property Leasing
Record to reflect the change in Acquisition Cost for such Property caused by
such release or disposition.
Section 3.03. Operating Lease. Brazos and Diamond Shamrock R & M
hereby declare that it is their mutual intent that for accounting and
regulatory purposes this Ground Lease be treated as an operating lease and not
an instrument or evidence of indebtedness, and that the relationship between
Brazos and Diamond Shamrock R & M under this Ground Lease shall be that of
lessor and lessee only. Title to and ownership of any Property shall at all
times remain in Brazos and at no time become vested in Diamond Shamrock R & M
except in accordance with an express provision of this Ground Lease. Diamond
Shamrock R & M does not hereby acquire any right, equity, title or interest in
or to any Property, except pursuant to the terms hereof.
ARTICLE IV
DELIVERY AND ACCEPTANCE
Section 4.01. Acceptance. Diamond Shamrock R & M shall accept
Property acquired by purchase or lease pursuant to the Agreement for Ground
Lease. Brazos shall not be liable to Diamond Shamrock R & M for any failure to
obtain, or delay in obtaining, any Property or any delay in the delivery of
title or possession thereof to Diamond Shamrock R & M.
Section 4.02. Payments Final. Each payment of Basic Rent, Additional
Rent and any other amount due hereunder made by Xxxxxxx Xxxxxxxx R & M shall be
final, and Diamond Shamrock R & M, without waiving any other remedies it may
have, will not seek or have any right to recover all or any part of such
payment from Brazos or any Assignee for any reason whatsoever. The making of
payments under this Ground Lease by Xxxxxxx Xxxxxxxx R & M (including payments
pursuant to Article X) shall not be deemed to be a waiver of any claim or
claims that Diamond Shamrock R & M may assert against Brazos or any other
person. Xxxxxx agrees to repay Diamond Shamrock R & M amounts paid to Brazos to
the extent such payments were in error and are not required by the various
terms and provisions of this Ground Lease.
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Section 4.03. No Warranties or Representations. Notwithstanding any
other provision contained in this Ground Lease, it is specifically understood
and agreed that neither Xxxxxx nor any Assignee nor any Affiliate of either,
nor anyone acting on behalf of any of them makes any warranties or
representations or has any responsibility to disclose any relevant information,
or has any other responsibility or duty, nor, except as set forth in Section
18.11 of this Ground Lease, has Brazos or any Assignee or any Affiliate of
either, or anyone acting on behalf of any of them made any covenants or
undertakings, as to the accounting treatment to be accorded Diamond Shamrock R
& M or as to the U.S. Federal or any state income or any other tax
consequences, if any, to Diamond Shamrock R & M as a result of or by virtue of
the transactions contemplated by this Ground Lease.
Section 4.04. Indemnity to Title Insurance. In the event the title
insurance policy insuring Brazos' and Assignee's interest in any Property would
not, in the absence of special assurance by Diamond Shamrock R & M, become
effective until the date of recordation of the deed, then Diamond Shamrock R &
M shall furnish such indemnity to the title insurance company as it shall
require in order to insure Brazos' interest in such Property, effective as of
the date of the Effective Date.
Section 4.05. Quiet Enjoyment. During the Lease Term or Renewal Term,
if any, of any Property hereunder and so long as no Event of Default, Event of
Property Termination, Potential Default or Potential Property Termination shall
have occurred and be continuing, Brazos covenants that as between Brazos and
Diamond Shamrock R & M, Diamond Shamrock R & M shall have the right to quiet
enjoyment of the Property on the terms and conditions provided in this Ground
Lease without any interference from Brazos. Diamond Shamrock R & M agrees to
attorn to any Assignee in the event such Assignee succeeds to Xxxxxx' interest
in the Property, and Diamond Shamrock R & M will not hold the Assignee
responsible for Brazos' obligations incurred in the period prior to the
succession of the Assignee to Brazos' interest.
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ARTICLE V
LEASE TERM
Section 5.01. Lease Term. The "Lease Term" with respect to any
Property leased hereunder shall commence on the Effective Date for such
Property and shall end on December 19, 2003. The lease of any Property may be
renewed for two (2) additional seven (7) year terms pursuant to, and in
accordance with, Section 11.03. The Lease Term or any Renewal Term may be
terminated earlier pursuant to Articles XI, XII, XIII, XIV or XV hereof or
otherwise pursuant to operation of any Legal Requirements.
Section 5.02. Termination. Notwithstanding anything contained in this
Article V or Article XI, this Ground Lease shall terminate on December 19,
2017, unless earlier terminated.
ARTICLE VI
RENT AND OTHER PAYMENTS
Section 6.01. Basic Rent. Diamond Shamrock R & M hereby agrees to pay
Brazos on each Basic Rent Payment Date, Basic Rent for the calendar month in
which such Basic Rent Payment Date falls with respect to each Property leased
prior to the last two (2) Business Days of the preceding calendar month.
Brazos shall notify Diamond Shamrock R & M at least two Business Days prior to
each Basic Rent Payment Date of the amount of the Basic Rent due with respect
to each Property on such Basic Rent Payment Date.
Section 6.02. Other Amounts. Diamond Shamrock R & M xxxxxx agrees to
pay on demand all amounts (other than Basic Rent) due hereunder, including,
without limitation, all amounts payable to any Indemnified Person pursuant to
Article X hereof.
Section 6.03. Additional Rent. Diamond Shamrock R & M shall pay to
Brazos from time to time, on demand, as additional rent ("Additional Rent") (i)
amounts required to reimburse Brazos for its obligations, costs and expenses
(not previously included in the formula for Basic Rent) incurred in acquiring,
financing and leasing the Property and (ii) to the extent legally enforceable,
interest on each overdue amount not paid by Diamond Shamrock R & M to Brazos as
provided in this Ground Lease from the date such overdue amount was due until
paid at the per annum rate of interest equal to the most recent rate of
interest calculated pursuant to paragraph (iii) of the definition "Basic Rent"
plus two percent
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(2%). Diamond Shamrock R & M shall also pay to Brazos on demand an amount
equal to any reasonable expenses and attorneys' fees incurred by Xxxxxx in
collecting such unpaid sums and enforcing the obligations for such unpaid sums.
Section 6.04. Payment in Advance. Basic Rent and Additional Rent and
any other amount payable by Diamond Shamrock R & M to Brazos shall be paid
sufficiently in advance of the date due to assure that immediately available
funds in the full amount due are available on the date due, to such account of
Brazos at such bank, or to such account of such other person at such bank, or
otherwise as Brazos may from time to time designate.
Section 6.05. Credit Agreement Losses. In addition to all other
payment obligations hereunder, if the lease for any Property is terminated for
any reason prior to the end of the Lease Term or, if applicable, Renewal Term,
then Diamond Shamrock R & M shall pay to Brazos within three Business Days
after receipt of the billing statement referred to below an additional amount
compensating Brazos for all penalties, costs and expenses (including
out-of-pocket costs and expenses) as are incurred by Brazos under any Credit
Agreement in connection with such termination and as are set forth in a billing
statement sent by Brazos to Diamond Shamrock R & M containing the calculation
thereof in reasonable detail.
ARTICLE VII
RESTRICTED USE; COMPLIANCE WITH LAWS
Section 7.01. Insurance Requirement and Legal Requirement. So long as
no Event of Default or Event of Property Termination shall have occurred and be
continuing, Diamond Shamrock R & M may use the Property in the regular course
of its business for any lawful purpose. Diamond Shamrock R & M will not do or
permit any act or thing which is contrary in any material respect to any
Insurance Requirement or which is contrary to any Legal Requirement or which
might impair, other than in the normal use thereof, the value or usefulness of
any Property; provided, that Diamond Shamrock R & M shall not be required to
comply with any Legal Requirements if, (a) in the case of Legal Requirements
with respect to laws affecting the environment, such non-compliance was not the
result of willful action by Xxxxxxx Xxxxxxxx R & M and Diamond Shamrock R & M
acts
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diligently to cure such non-compliance upon becoming aware of it; or (b) unless
any criminal liability could result from a failure to comply therewith, such
non-compliance, individually or in the aggregate, (i) could not reasonably be
expected to cause either Brazos or any Assignee to incur civil liability which,
in the sole judgment of Brazos or any Assignee, is not adequately indemnified
(Diamond Shamrock R & M's obligations under Article X of this Ground Lease
shall be deemed to be adequate indemnification if no Event of Default, Event of
Property Termination, Potential Default or Potential Property Termination
exists and if such civil liability is reasonably likely to be less than
$500,000 per Property and $1,000,000 in the aggregate for all Properties), (ii)
will not result in a material diminution in the value of any Property, (iii) is
consistent with business practices normal in the industry of Diamond Shamrock R
& M, (iv) shall not involve any material danger that any Property would be
subject to sale, forfeiture or loss, as a result of failure to comply
therewith, and (v) is permitted under the provisions of the Acquired Ground
Lease, if any, on such Property.
Section 7.02. Filings. Diamond Shamrock R & M shall promptly and duly
execute, deliver, file and record, at Diamond Shamrock R & M's expense, all
such documents, statements, filings and registrations, and take such further
action as Brazos or any Assignee shall from time to time reasonably request in
order to establish, perfect and maintain Brazos' or such Assignee's title to
and interest in the Property and any Assignee's interest in this Ground Lease
or any Property as against Diamond Shamrock R & M or any third party in any
applicable jurisdiction.
Section 7.03. Compliance with Other Requirements. Diamond Shamrock R
& M shall use every precaution which is commercially reasonable and which is
usually employed by corporations engaged in a business which involves owning or
operating similar property to prevent loss or damage to Property and to prevent
injury to third persons or property of third persons. Diamond Shamrock R & M
shall cooperate fully with Brazos and all insurance companies providing
insurance pursuant to Article IX hereof in the investigation and defense of any
claims or suits arising from the ownership, use, or occupancy of the Property,
provided that nothing contained in this Section 7.03 shall be construed as
imposing on Brazos any duty to investigate or defend any such claims or suits.
Diamond Shamrock R & M shall comply and shall use its commercially reasonable
best
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efforts to cause all persons using or occupying Property to comply with all
Insurance Requirements and Legal Requirements regarding acquiring, titling,
registering, leasing, insuring, using, occupying, operating and disposing of
Property, and, if applicable, the licensing of operators thereof; provided,
that Diamond Shamrock R & M shall not be required to comply with any Legal
Requirements if, (a) in the case of Legal Requirements with respect to laws
affecting the environment, such non-compliance was not the result of willful
action by Diamond Shamrock R & M and Diamond Shamrock R & M acts diligently to
cure such non-compliance upon becoming aware of it, or (b) unless any criminal
liability could result from a failure to comply therewith, such non-compliance,
individually or in the aggregate, (i) could not reasonably be expected to cause
either Brazos or any Assignee to incur civil liability which, in the sole
judgment of Brazos or any Assignee, is not adequately indemnified (Diamond
Shamrock R & M's obligations under Article X of this Ground Lease shall be
deemed to be adequate indemnification if no Event of Default, Event of Property
Termination, Potential Default or Potential Property Termination exists and if
such civil liability is reasonably likely to be less than $500,000 per Property
and $1,000,000 in the aggregate for all Properties), (ii) will not result in a
material diminution in the value of any Property, (iii) is consistent with
business practices normal in the industry of Diamond Shamrock R & M, (iv) shall
not involve any material danger that any Property would be subject to sale,
forfeiture or loss, as a result of failure to comply therewith, and (v) is
permitted under the provisions of the Acquired Ground Lease, if any, on such
Property.
Section 7.04. Inspection. Brazos or any Assignee or any authorized
representative of either may during reasonable business hours from time to time
inspect Property and deeds, registration certificates, certificates of title
and related documents covering Property wherever the same may be located, but
neither Brazos nor any Assignee shall have any duty to make any such
inspection.
Section 7.05. No Liens. Diamond Shamrock R & M shall not permit or
suffer to exist on any Property any Lien, other than Liens which are the
subject of a Permitted Contest, Permitted Encumbrances and Liens placed thereon
by, or arising from, Xxxxxx' own actions or those of any Assignee or Affiliate
of Brazos (provided, that any Liens of Record, other than Liens placed thereon
by, or arising from, Brazos' own actions or those of any
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Assignee or Affiliate of Brazos, may not exceed an aggregate amount of
$1,000,000 with respect to the aggregate of the Properties and Facilities, and
an aggregate amount of $100,000 with respect to each Property and related
Facility), nor may it assign any right or interest herein or in any Property.
Diamond Shamrock R & M shall not without the prior written consent of Xxxxxx
and Assignee sublease or otherwise relinquish possession of any Property,
except that Diamond Shamrock R & M may otherwise relinquish possession of
Property to any contractor for use in performing work for Diamond Shamrock R &
M, provided that such relinquishment of possession shall in no way affect the
obligations of Diamond Shamrock R & M or the rights of Brazos hereunder and
with respect to the Property. Brazos shall have the present and continuing
right to collect and enjoy all rents and other sums of money payable under any
such sublease, and Diamond Shamrock R & M hereby irrevocably assigns such rents
and other sums to Brazos for the benefit and protection of Brazos, provided
that unless an Event of Default or Event of Property Termination shall have
occurred and be continuing hereunder, Diamond Shamrock R & M shall be entitled
to collect and enjoy such rents and other sums. Diamond Shamrock R & M shall,
within thirty (30) days after the execution of any such sublease, deliver a
conformed copy thereof to Brazos. Nothing contained in this Ground Lease shall
be construed as constituting the consent or request of Brazos, express or
implied, to or for the performance by any contractor, laborer, materialman or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to any Property
or any part thereof. Notice is hereby given that Brazos will not be liable for
any labor, services or materials furnished or to be furnished to Diamond
Shamrock R & M, or to anyone holding any Property or any part thereof through
or under Diamond Shamrock R & M.
Section 7.06. Interference. If any Lien or charge of any kind or any
judgment, decree or order of any court or other governmental authority
(including, without limitation, any state or local tax lien affecting the
Property), whether or not valid, shall be asserted or entered which is
reasonably likely to interfere with the due and timely payment of any sum
payable or the exercise of any of the rights or the performance of any of the
duties or responsibilities under this Ground Lease, Diamond Shamrock R & M
shall, upon obtaining knowledge thereof or upon receipt of notice
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to that effect from Brazos, promptly take such action as may be necessary to
prevent or terminate such interference.
ARTICLE VIII
MAINTENANCE OF PROPERTY
Section 8.01. Warranties. Brazos, so long as no Event of Default or
Event of Property Termination shall have occurred and be continuing, hereby
assigns and agrees to make available to Diamond Shamrock R & M any and all
rights Brazos may have under any vendor's warranties or undertakings with
respect to the Property. If any Event of Default or Event of Property
Termination shall have occurred and be continuing, the assignment of such
rights from Brazos to Diamond Shamrock R & M shall be deemed to be terminated.
Section 8.02. Costs and Expenses. Diamond Shamrock R & M shall pay
all costs, expenses, fees and charges incurred in connection with the
ownership, use or occupancy of any Property during the Lease Term and Renewal
Term, if any, thereof, including, without limitation, any rent under an
Acquired Ground Lease. Except as otherwise provided in Article XII hereof,
Diamond Shamrock R & M shall at all times, at its own expense, and subject to
reasonable wear and tear, keep the Property in good operating order, repair,
condition and appearance. The foregoing undertaking to maintain Property in
good repair shall apply regardless of the cause necessitating repair,
regardless of the availability or adequacy of insurance or condemnation
proceeds and regardless of whether Diamond Shamrock R & M has possession of the
Property, and as between Brazos and Diamond Shamrock R & M all risks of damage
to the Property are assumed by Diamond Shamrock R & M. With respect to any
Property, the undertaking to maintain in good repair shall include, without
limitation, all common area maintenance including, without limitation, removal
of dirt, snow, ice, rubbish and other obstructions and maintenance of sidewalks
and landscaping. Diamond Shamrock R & M hereby agrees to indemnify and hold
Brazos and any Assignee harmless from and against all costs, expenses, claims,
losses, damages, fines or penalties, including reasonable counsel fees, arising
out of or due to Diamond Shamrock R & M's failure to fulfill its obligations
under this Section 8.02.
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Section 8.03. Payment of Taxes. With respect to any Property, Diamond
Shamrock R & M shall make all required reports to the appropriate taxing
authorities and shall pay: (i) all taxes, assessments, levies, fees, water and
sewer rents and charges, and all other governmental, quasi-governmental and
non-governmental charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, which are, at any time during the Lease Term or any
Renewal Term hereof, imposed or levied upon or assessed against (A) the
Property, (B) any Basic Rent, any Additional Rent or other sum payable
hereunder or (C) this Ground Lease, the leasehold estate hereby created, or
which arises in respect of the ownership, operation, occupancy, possession or
use of the Property, (ii) all gross receipts or similar taxes (i.e., taxes
based upon gross income which fail to take into account all customary
deductions (e.g., depreciation and interest) relating to the Property) imposed
or levied upon, assessed against or measured by any Basic Rent, or any
Additional Rent or other sum payable hereunder, (iii) all sales, value added,
use and similar taxes at any time levied, assessed or payable on account of the
acquisition, leasing or use of the Property, and (iv) all charges of utilities
and communications services serving the Property. Diamond Shamrock R & M shall
not be required to pay any franchise, estate, inheritance, transfer, federal
income or similar tax of Brazos (other than any tax referred to in clause (ii)
above) unless such tax is imposed, levied or assessed in substitution for any
other tax, assessment, charge or levy which Diamond Shamrock R & M is required
to pay pursuant to this Section 8.03; provided, however, that if at any time
during the term of this Ground Lease, the method of taxation shall be such that
there shall be levied, assessed or imposed on Brazos a capital levy or other
tax directly on the rents received therefrom, or upon the value of any Property
or any present or any future improvement or improvements on any Property, then
all such taxes, assessments, levies, or charges, or the part thereof so
measured or based, shall be payable by Diamond Shamrock R & M, but only to the
extent that such taxes would be payable if the Property affected were the only
property of Brazos, and Diamond Shamrock R & M shall pay and discharge the same
as herein provided. Diamond Shamrock R & M will furnish to Brazos, promptly
after demand therefor, proof of payment of all items referred to above, the
payment of which is the responsibility of Diamond Shamrock R & M. If any such
assessments may legally be paid in installments, Diamond Shamrock R & M may pay
or permit to be paid such assessment in installments. So long as, in the
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reasonable opinion of Xxxxxxx Xxxxxxxx R & M's counsel, Diamond Shamrock R & M
shall have reasonable grounds to contest the existence, amount, applicability
or validity of any tax Diamond Shamrock R & M is required to pay pursuant to
this Ground Lease, Diamond Shamrock R & M may contest such tax pursuant to the
provisions of Article XVII of this Ground Lease so long as adequate reserves
therefor are maintained by Diamond Shamrock R & M.
Section 8.04. Environmental Reports. At any reasonable time and from
time-to-time, upon reasonable notice, Diamond Shamrock R & M shall furnish
Brazos a report prepared by a qualified independent consultant, at the expense
of Diamond Shamrock R & M, concerning the condition and status of a Property in
respect of any Environmental Laws, provided that the party requesting such
report has demonstrable evidence that such Property may be affected by a
hazardous substance, a hazardous waste or an Environmental Claim not adequately
addressed in any environmental assessment previously delivered to Brazos or any
Assignee in connection with such Property.
ARTICLE IX
INSURANCE
Section 9.01. Liability and Property Damage. Diamond Shamrock R & M
shall, at its sole cost and expense, maintain such liability and property
damage insurance with respect to all Property and insurance against loss or
damage to all Property of the types usually carried by corporations engaged in
the same or a similar business, of similar size as Diamond Shamrock R & M, and
owning similar property and which cover risks of the kind customarily insured
against by such corporations and such other insurance as may be required by law
or as may be reasonably requested by Brazos for purposes of assuring compliance
with this Article IX, including, without limitation, the insurance described on
the Schedule of Insurance attached hereto as Exhibit A. Such insurance shall
be written by financially sound and reputable companies which are legally
qualified to issue such insurance. Diamond Shamrock R & M may, at its cost and
expense, prosecute any claim against any insurer or contest any settlement
proposed by any insurer, and Diamond Shamrock R & M may bring any such
prosecution or contest in the name of Xxxxxx, Diamond Shamrock R & M, or both,
and Xxxxxx
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will join therein at Diamond Shamrock R & M's request, provided that Diamond
Shamrock R & M shall indemnify Brazos against any losses, costs or expenses
(including reasonable attorneys' fees) which Xxxxxx may incur in connection
with such prosecution or contest.
Section 9.02. Additional Insureds; Notice. Any policies of insurance
carried in accordance with this Article IX and any policies taken out in
substitution or replacement for any such policies (i) shall name Brazos and
Assignee as additional insureds, as their respective interests may appear (but
without imposing upon any such person any obligation imposed on the insured,
including, without limitation, the liability to pay the premium for any such
policy), (ii) shall have attached thereto a lender's loss payable endorsement
for the benefit of Brazos and Assignee as loss payees and (iii) shall provide
that as against Brazos and Assignee the insurers shall waive any rights of
subrogation. Diamond Shamrock R & M shall request the insurers to give thirty
(30) days advance written notice to Brazos and its assigns of any cancellation
of any insurance to be maintained under this Article. Diamond Shamrock R & M
shall give a copy to Brazos and any Assignee of any notice received by Diamond
Shamrock R & M regarding the cancellation or other termination of the insurance
included in the Schedule of Insurance attached hereto as Exhibit A. Each
liability policy (A) shall be primary without right of contribution from any
other insurance which is carried by Brazos with respect to its interest as such
in the Property and (B) shall expressly provide that all of the provisions
thereof, except the limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured.
Section 9.03. Application of Proceeds of Loss or Substantial Taking.
Any insurance or condemnation proceeds received as the result of the occurrence
of (i) any event of loss described in Section 14.03 hereof or (ii) any event of
substantial Taking described in Section 15.01 shall be paid to Brazos, and
disposed of as contemplated by Section 14.03 hereof.
Section 9.04. Application of Proceeds of other than Loss or
Substantial Taking. As between Diamond Shamrock R & M and Xxxxxx, if any
insurance or condemnation proceeds received as a result of any loss or Taking,
other than a loss described in Section 14.03 or
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an event of substantial Taking described in Section 15.01, is less than
$100,000, it is agreed that such proceeds will be paid to Diamond Shamrock R &
M to be used for repairs, replacement, reconstruction or restoration in
accordance with the terms of Sections 14.02 and 15.02 hereof. If the proceeds
equal or exceed $100,000, then the proceeds shall be deposited in a special
purpose account held by Assignee, to be used only for the purpose set forth in
this paragraph, and Diamond Shamrock R & M shall be entitled (i) to receive the
amounts so deposited against certificates, invoices or bills in form
satisfactory to Brazos and Assignee, delivered to Brazos and Assignee from time
to time as such work or repair progresses, and (ii) to direct the investment of
the amounts so deposited as provided in Section 9.05. Any moneys remaining in
the aforesaid account after final payment for repairs has been made shall be
paid to Diamond Shamrock R & M.
Section 9.05. Investment. Assignee, at Diamond Shamrock R & M's
instruction, shall invest the amounts deposited with Assignee pursuant to
Section 9.04 in the following:
(i) direct obligations of the United States Government;
(ii) interest-bearing time deposits at, or obligations of, any
Assignee; or
(iii) commercial paper supported by a letter of credit issued by any
Assignee.
Such investments shall mature in such amounts and on such dates so as to
provide that amounts shall be available on the draw dates sufficient to pay the
amounts requested by and due to Diamond Shamrock R & M. Any interest earned on
investments of such funds shall be paid to Diamond Shamrock R & X. Xxxxxx and
Assignee shall not be liable for any loss resulting from the liquidation of
each and every such investment and Diamond Shamrock R & M shall be liable for
such loss, if any.
Section 9.06. Application in Default. Any amount referred to in
Sections 9.03 or 9.04 which is payable to Diamond Shamrock R & M shall not be
paid to Diamond Shamrock R & M or, if it has been previously paid to Diamond
Shamrock R & M and not applied by Diamond Shamrock R & M as provided in
Sections 9.03 or 9.04, shall not be retained by Diamond Shamrock R & M, if at
the time of such
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payment an Event of Default or Event of Property Termination shall have
occurred and be continuing. In such event, all such amounts shall be paid to
and held by Xxxxxx as security for the obligations of Xxxxxxx Xxxxxxxx R & M
hereunder or, at Xxxxxx' option, applied by Brazos toward payment of any of
such obligations of Diamond Shamrock R & M at the time due hereunder as Xxxxxx
may elect. At such time as there shall not be continuing any Event of Default
or Event of Property Termination, all such amounts at the time held by Brazos
in excess of the amount, if any, which Brazos shall have elected to apply as
above provided shall be applied as provided in Sections 9.03 or 9.04.
Section 9.07. Certificates. On or before the execution of this Ground
Lease, and annually on or before the anniversary of the date of this Ground
Lease, Diamond Shamrock R & M will furnish to Brazos and Assignee certificates
or other evidence reasonably acceptable to Brazos and Assignee certifying that
the insurance then carried and maintained on each Property complies with the
terms hereof.
Section 9.08. Covenant to Keep Insurance in Force. Diamond Shamrock R
& M covenants that it will not use or occupy any Property or permit the use or
occupancy of any Property at a time when the insurance required by this Article
IX is not in force with respect to such Property.
ARTICLE X
INDEMNITIES
Section 10.01. Indemnified Persons. Diamond Shamrock R & M shall
indemnify and hold harmless Brazos, each general and limited partner of Xxxxxx,
any Assignee, any successor or successors, and any Affiliate of each of them,
and their respective officers, directors, incorporators, shareholders, partners
(general and limited, including without limitation, the general and limited
partners of Brazos), employees, agents and servants (each of the foregoing an
"Indemnified Person") from and against all liabilities, taxes, losses,
obligations, claims, damages, penalties, causes of action, suits, costs and
expenses (including, without limitation, reasonable attorneys' and accountants'
fees and
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expenses) or judgments of any nature relating to or in any way arising out of:
(a) The acquisition, title on acquisition, rejection, possession,
titling, retitling, registration, reregistration, custody by Xxxxxxx Xxxxxxxx R
& M of title and registration documents, ownership, use, non-use, misuse,
lease, operation, repair, control or disposition of any Property leased or
subleased or to be leased or subleased hereunder, (i) except to the extent that
such costs are included in the Acquisition Cost of such Property and (ii)
except for any general administrative expenses of Brazos;
(b) The assertion of any claim or demand based upon any
infringement or alleged infringement of any right, by or in respect of any
Property; provided, however, that upon request of Diamond Shamrock R & M,
Xxxxxx will make available to Diamond Shamrock R & M Brazos' rights under any
similar indemnification arising from any vendor's warranties or undertakings
with respect to any Property;
(c) All U.S. Federal, state, county, municipal, foreign or other
fees and taxes of whatsoever nature arising from or relating to ownership of
the Property, including but not limited to license, qualification, franchise,
sales, use, gross income, gross receipts, ad valorem, business, personal
property, real estate, value added, excise, motor vehicle, occupation fees and
stamp or other taxes or tolls of any nature whatsoever, and penalties and
interest thereon, whether assessed, levied against or payable by Brazos or
otherwise, with respect to any Property or the acquisition, purchase, sale,
rental, use, operation, control, ownership or disposition of any Property
(including without limitation any claim by any governmental authority for
transfer tax, transfer gains tax, mortgage recording tax, filing or other
similar taxes or fees in connection with the acquisition of any Property by
Brazos or otherwise in connection with this Ground Lease) or measured in any
way by the value thereof or by the business of, investment in, or ownership by
Brazos with respect thereto, provided that this indemnity shall not apply to
(i) net income taxes imposed by any state or local taxing authority utilizing
the Unitary Method of Taxation, (ii) U.S. Federal net income or capital gains
taxes or (iii) state and local net income or capital gains taxes which are
imposed by a state or locality because of a relationship between Brazos and
such state or locality unrelated to ownership of the
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Property or to this Ground Lease; and provided further, that to the extent
Diamond Shamrock R & M's obligations hereunder include indemnifying Brazos for
net income taxes imposed by a state or local taxing authority, such obligations
shall be limited to indemnifying Brazos for the inability, disallowance or
other loss of deductions relating to ownership of the Property customarily
allowed in computing net income (e.g., interest expense, depreciation,
financing, administrative and other fees and expenses);
(d) Any violation or alleged violation (other than an alleged
violation alleged by Brazos) by Xxxxxxx Xxxxxxxx R & M of this Ground Lease or
of any contracts or agreements to which Diamond Shamrock R & M is a party or by
which it is bound or any laws, rules, regulations, orders, writs, injunctions,
decrees, consents, approvals, exemptions, authorizations, licenses and
withholdings of objection, of any governmental or public body or authority and
all other Legal Requirements, including, without limitation, any Legal
Requirements with respect to the environment or the regulation of hazardous
materials or substances, or any breach of a representation or warranty by
Diamond Shamrock R & M under this Ground Lease;
(e) Any Environmental Claim or requirement of Environmental Law
concerning or relating to any Property, or the operations or business in
respect of any Property; or
(f) Any claim against Xxxxxx' title or Assignee's interest in any
Property to the extent such claim is not fully paid by title insurance.
Section 10.02. Payments. Diamond Shamrock R & M shall forthwith upon
demand reimburse any Indemnified Person for any sum or sums expended with
respect to any of the items set forth in Section 10.01 or, upon request from
any Indemnified Person, shall pay such amounts directly. Any payment made to
or on behalf of any Indemnified Person pursuant to this Article X shall be
increased to such amount as will, after taking into account all taxes imposed
with respect to the accrual or receipt of such payment (as the same may be
increased pursuant to this sentence), equal the amount of the payment, reduced
by the amount of any savings in such taxes actually realized by the Indemnified
Person as a result of the payment or accrual of the amounts in respect of which
the payment
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to or on behalf of the Indemnified Person hereunder is made. Any Indemnified
Person seeking indemnification under this Article X shall give Diamond Shamrock
R & M written evidence supporting the amount demanded, and such written
evidence shall be deemed to be conclusive, absent manifest error. To the extent
that Diamond Shamrock R & M in fact indemnifies any Indemnified Person under
the indemnity provisions of this Ground Lease, Diamond Shamrock R & M shall be
subrogated to such Indemnified Person's rights in the affected transaction and
shall have a right to determine the settlement of claims therein.
Section 10.03. Continuing Indemnification. The indemnities contained
in this Article X shall not be affected by and shall survive any termination of
this Ground Lease as a whole or in respect of any Property leased hereunder or
any failure or refusal of Diamond Shamrock R & M to accept any Property
acquired pursuant to the Agreement for Ground Lease.
Section 10.04. Limitations.
(a) Notwithstanding any provisions of this Article X to the contrary
(except as further limited solely with respect to any Property located in the
State of New Mexico in Section 10.04(b) below), Diamond Shamrock R & M shall
not indemnify and hold harmless any Indemnified Person against any claims and
liabilities arising solely from the gross negligence (as between such
Indemnified Person or an Affiliate of such Indemnified Person and Diamond
Shamrock R & M) or willful misconduct (as between such Indemnified Person or an
Affiliate of such Indemnified Person and Diamond Shamrock R & M) of such
Indemnified Person, but shall otherwise indemnify any Indemnified Person
against its own negligence.
(b) With respect to any Property located in the State of New Mexico,
no agreement to indemnify contained in this Agreement shall extend to
liability, claims, damages, losses, or expenses, including attorney fees,
arising out of the preparation or approval of maps, drawings, opinions,
reports, surveys, change orders, designs, or specifications by the Indemnified
Person, or the agents or employees of the Indemnified Person, or the giving of
or the failure to give directions or instructions by the Indemnified Person, or
the agents or employees of the Indemnified Person, where
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such giving or failure to give directions or instructions is the primary cause
of bodily injury to persons or damage to property.
(c) Xxxxxx and Diamond Shamrock R & M agree that the provisions of
Section 10.04(b) shall apply only with respect to any Property located in the
State of New Mexico. The provisions of Section 10.04(b) are included in this
Ground Lease for the sole purpose of complying with the provisions of Section
56-7-1 of the New Mexico Statutes Annotated (1978) and shall have no force or
effect with respect to any Property located other than in the State of New
Mexico.
(x) Xxxxxx and Diamond Shamrock R & M agree that the activities of
Diamond Shamrock R & M under this Ground Lease relating to the preparation or
approval of any maps, drawings, opinions, reports, surveys, change orders,
designs, or specifications relating to any Property is being done by Diamond
Shamrock R & M in its capacity as the lessee of the Property and not as the
agent or employee of Brazos. Diamond Shamrock R & M and Xxxxxx agree that to
the greatest extent possible without causing any indemnification provision of
this Ground Lease to be void and unenforceable under Section 56-7-1 of the New
Mexico Statutes Annotated (1978), it is the intention of the parties to this
Ground Lease for Diamond Shamrock R & M to bear all responsibility for and to
indemnify Brazos against any liability, claims, damages, losses or expenses,
including attorneys fees, arising out of the preparation or approval of any
maps, drawings, opinions, reports, surveys, change orders, designs, or
specifications relating to the Property.
Section 10.05. Litigation. If any claim, action, proceeding or suit
is brought against an Indemnified Person with respect to which Diamond Shamrock
R & M would be required to indemnify such Indemnified Person, Diamond Shamrock
R & M shall have the right to assume the defense thereof, including the
employment at its expense of counsel; provided that Diamond Shamrock R & M
shall not have such right, to the extent that such Indemnified Person shall
deliver to Diamond Shamrock R & M a written notice waiving the benefits of the
indemnification of such Indemnified Person provided by this Article X in
connection with such claim, action, proceeding or suit. Notwithstanding the
foregoing, if (i) any claim, action, proceeding or suit is brought against an
Indemnified Person who is an individual, (ii) the action threatens to restrain
or adversely
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affect the conduct of the business of the Indemnified Person, but not the
business of Brazos' ownership of the Property under this Ground Lease, (iii)
the claim, action, proceeding or suit seeks damages of more than $10,000,000,
or (iv) independent counsel to an Indemnified Person shall conclude that there
may be defenses available to the Indemnified Person which are different from,
or additional to, and may conflict with those available to Diamond Shamrock R &
M, Diamond Shamrock R & M shall not have the right to assume the defense of any
such action on behalf of the Indemnified Person if such Indemnified Person
chooses to defend such action, and all reasonable costs, expenses and
attorneys' fees incurred by the Indemnified Person in defending such action
shall be borne by Xxxxxxx Xxxxxxxx R & M. Notwithstanding the assumption of
its defense by Diamond Shamrock R & M pursuant to this paragraph, any
Indemnified Person shall have the right to employ separate counsel and to
participate in its defense, but the fees and expenses of such counsel shall be
borne by the Indemnified Person. In addition, Diamond Shamrock R & M will not
be liable for any settlement of any claim, action, proceeding or suit unless
Diamond Shamrock R & M has consented thereto in writing. Any decision by an
Indemnified Person to employ its own counsel rather than counsel selected by
Xxxxxxx Xxxxxxxx R & M (whether or not at Diamond Shamrock R & M's expense)
shall in no way affect any rights of such Indemnified Person otherwise arising
under this Article X.
ARTICLE XI
RENEWAL AND TERMINATION
Section 11.01. Diamond Shamrock R & M's Right to Terminate. So long
as no Event of Default or Event of Property Termination has occurred and is
continuing, Diamond Shamrock R & M shall have the right, at any time during the
Lease Term or any Renewal Term, upon not less than thirty (30) days' written
notice to Brazos and Assignee, to terminate on the Basic Rent Payment Date
specified in such notice this Ground Lease with respect to any Property, if (a)
indemnity payments to Brazos pursuant to Section 10.01(c) shall have been
required and can be reasonably expected to occur subsequently and such payments
are or would be in the aggregate (taking into account the recurring nature of
the payments) sufficient in the reasonable judgment of Diamond Shamrock R & M
to render this Ground Lease uneconomic with respect to that Property,
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(b) due to a change in accounting rules or treatment, this Ground Lease is no
longer treated as an operating lease for accounting purposes or (c) there
exists an event of default under any Credit Agreement and the payment
obligations of Brazos thereunder are declared to be immediately due and
payable. Upon exercising its rights under this Section 11.01 Diamond Shamrock
R & M shall either (i) purchase such Property for cash at its Acquisition Cost
or (ii) with the consent of Brazos, arrange, at its own cost and expense, for
such Property to be sold for cash pursuant to Section 11.04 and with the
consequences therein provided, except that such sale must occur on the Basic
Rent Payment Date stipulated in the written notice contemplated by this Section
11.01.
Section 11.02. Brazos' Right to Terminate. Brazos shall have the
right upon written notice to Diamond Shamrock R & M, to terminate the ground
lease of any or all Property as of a Basic Rent Payment Date stipulated in such
notice if at any time: (1) by reason of a nexus between a state or local taxing
jurisdiction and the Property or the activities of any user (other than Brazos)
of the Property, Brazos incurs, or, in its reasonable judgment, in the future
would incur, a state or local tax based upon the Unitary Method of Taxation
which, in its sole judgment, renders the Ground Lease uneconomic; or (2) the
Agreement for Ground Lease or any other instrument relating to this Ground
Lease, shall be deemed to require the payment or deemed to permit the
collection of interest in excess of the Maximum Rate and any such interest in
excess of such Maximum Rate cannot be spread and allocated either to the
preceding or subsequent periods in which such excess interest is to be paid or
collected pursuant to Section 18.08 of this Ground Lease. In the event of a
termination of this Ground Lease with respect to any or all Property pursuant
to this Section 11.02, Diamond Shamrock R & M shall either (i) purchase, on the
Basic Rent Payment Date stipulated in the written notice contemplated by this
Section 11.02, such Property for cash at its Acquisition Cost or (ii) with the
consent of Brazos, arrange, at its own cost and expense, for such Property to
be sold for cash pursuant to Section 11.04 and with the consequences therein
provided, except that such sale must occur on the Basic Rent Payment Date
stipulated in the written notice contemplated by this Section 11.02.
Section 11.03. Renewal.
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(a) Not later than twelve months prior to the end of the Lease
Term or the first Renewal Term, if any, as applicable, Brazos shall give notice
to Diamond Shamrock R & M as to whether it desires to renew the lease with
respect to each Property and the terms and conditions (including the rental
amounts) of any such renewal. Not later than nine months prior to the end of
the Lease Term or Renewal Term, as applicable, Diamond Shamrock R & M shall
give notice to Brazos as to whether it will renew or not renew the lease for
each Property for which Xxxxxx has offered to renew the lease. Failure of
Diamond Shamrock R & M to give such notice with respect to any Property shall
be deemed an election not to renew the lease for such Property. So long as (i)
no Event of Default or Event of Property Termination has occurred and is
continuing, with respect to each Property for which the parties agree to renew
the lease and (ii) Brazos shall have received a commitment for financing for
each such Property through the last day of the Renewal Term (as defined below)
from the lender(s) under a then-existing Credit Agreement or from a third
party, the lease shall be renewed for a term (the "Renewal Term") equal to five
years commencing on the first day of the calendar month following the last day
of the Lease Term or Renewal Term, as applicable, thereof; provided, however,
the Lease Term or Renewal Term, as applicable, shall not be renewed if on the
first day of the new Renewal Term (a) the lender(s) under a then- existing
Credit Agreement fails to fund under its commitment pursuant to the terms of
such commitment or (b) a third party fails to fund under its commitment for any
reason.
(b) With respect to each Property for which the lease is not being
renewed, Diamond Shamrock R & M shall, at its option, either (i) purchase such
Property for cash at its Acquisition Cost during the period from one (1) month
before the end of the Lease Term or Renewal Term, as applicable, to five (5)
Business Days before the end of the Lease Term or Renewal Term, as applicable
or (ii) arrange, at its own cost and expense, for such Property to be sold for
cash pursuant to Section 11.04 and with the consequences therein provided
during the period from six (6) months before the end of the Lease Term or
Renewal Term, as applicable, to one (1) month before the end of the Lease Term
or Renewal Term, as applicable. With respect to each Property for which the
lease is not being renewed, not later than eight months prior to the end of the
Lease Term or Renewal Term, as applicable, Diamond Shamrock R & M shall give
notice to Brazos of which Properties it elects to
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purchase and which Properties will be sold to third parties. Any notice given
by Xxxxxxx Xxxxxxxx R & M pursuant to the preceding sentence shall be
irrevocable, except that Diamond Shamrock R & M may revoke the election to have
a Property sold to a third party if Diamond Shamrock R & M purchases such
Property.
Section 11.04. Sales to Third Parties. (a) If Diamond Shamrock R & M
exercises its right to arrange for a sale of a Property to a third party
pursuant to Sections 11.01, 11.02 or 11.03, Brazos shall receive the proceeds
of sale and:
(i) if the proceeds of sale are greater than the Acquisition Cost
of the Property sold, Brazos shall pay to Diamond Shamrock R &
M the amount by which such proceeds exceed such Acquisition
Cost; and
(ii) if the proceeds of sale are equal to or less than the
Acquisition Cost of the Property sold, Diamond Shamrock R & M
shall pay to Brazos an amount equal to (A) such Acquisition
Cost less (B) the proceeds of such sale.
For purposes of this Section 11.04, in connection with the sale of a Property
"proceeds of sale" shall mean the aggregate proceeds from the sale of such
Property without reduction for any amounts paid by Diamond Shamrock R & M.
(b) All payments and credits referred to in paragraph (a) above
shall be made on the date of the sale of such Property, and the parties shall
account to each other for such payments and credits. In consideration for the
receipt by Xxxxxx of the proceeds of sale and all other amounts then due and
owing hereunder, Xxxxxx shall transfer title to such Property to the purchaser
at the sale designated by Diamond Shamrock R & M. In the event of a sale
pursuant to this Section 11.04, neither Diamond Shamrock R & M nor any
Affiliate of Diamond Shamrock R & M shall purchase the Property. Any Property
sold to a third party pursuant to this paragraph (b) shall be free of any Liens
at the time of sale, including Liens which would otherwise be Permitted
Encumbrances if such Liens would reduce the value to the purchaser of such
Property.
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(c) If a Property and all Facilities thereon are sold to the same
third party, the proceeds of sale shall be allocated prorata between such
Property and Facility based on the Acquisition Cost of such Property and the
Acquisition Cost (as defined in the Facilities Lease) of such Facility.
Section 11.05. Additional Payments. In connection with any purchase
or sale of a Property under this Article XI, on or before the date such
purchase or sale occurs, Diamond Shamrock R & M shall pay to Brazos, in
addition to any purchase price payable, all Basic Rent payable, any Additional
Rent, all amounts owing under Section 11.04, and other amounts owing hereunder.
Section 11.06. Termination of Ground Lease. Upon receipt by Xxxxxx
of the purchase price payable in connection with any sale or purchase of any
Property under this Article XI, together with all additional payments required
under Section 11.05 with respect to such Property, this Ground Lease shall
terminate with respect to such Property.
Section 11.07. Surrender of Property. Subject to the provisions of
this Article XI and Articles XII, XIII, XIV and XV hereof, upon termination of
the ground lease of any Property hereunder, Diamond Shamrock R & M shall
surrender such Property to Brazos. In connection with the sale of any Property
by Xxxxxx, in consideration of the receipt of the purchase price and all other
amounts which may be owing to Brazos under Section 11.05, Brazos shall execute
and deliver all instruments of transfer necessary to convey Brazos' interest to
the purchaser of such Property.
ARTICLE XII
ECONOMIC DISCONTINUANCE
Section 12.01. Uneconomic Property. If, at any time after the end of
its Lease Term, in the good faith judgment of Diamond Shamrock R & M, any
Property shall have become uneconomic for continued use and occupancy by
Diamond Shamrock R & M (such Property hereinafter sometimes called an
"Uneconomic Property"), then Diamond Shamrock R & M shall deliver to Brazos and
Assignee a written notice (an "Uneconomic Notice") containing (i) notice of
Diamond Shamrock R & M's intention to terminate the Ground Lease as
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to such Uneconomic Property as of a Basic Rent Payment Date specified in such
notice, which Basic Rent Payment Date shall be within sixty (60) days of such
notice, and (ii) a certificate of an officer of Diamond Shamrock R & M stating
that Diamond Shamrock R & M has determined that such Property has become
uneconomic for continued use and occupancy by Diamond Shamrock R & M. Diamond
Shamrock R & M shall terminate this Ground Lease with respect to such
Uneconomic Property and shall either purchase the Uneconomic Property for cash
at its Acquisition Cost on the Basic Rent Payment Date specified in such notice
or sell such Uneconomic Property on such date; provided, that if the proceeds
of the sale of the Uneconomic Property are less than the Acquisition Cost of
such Uneconomic Property, then in addition to the purchase price Diamond
Shamrock R & M shall pay to Brazos an amount equal to such Acquisition Cost
less the proceeds of such sale.
Section 12.02. Uneconomic Notice. If, at any time during its Lease
Term, in the good faith judgment of Diamond Shamrock R & M, any Property shall
have become an Uneconomic Property, then Diamond Shamrock R & M shall deliver
to Brazos and Assignee an Uneconomic Notice containing (i) notice of Diamond
Shamrock R & M's intention to terminate the Ground Lease as to such Uneconomic
Property as of a Basic Rent Payment Date specified in such notice, which Basic
Rent Payment Date shall be within sixty (60) days of such notice, and (ii) a
certificate of an officer of Diamond Shamrock R & M stating that Diamond
Shamrock R & M has determined that such Property has become uneconomic for
continued use and occupancy by Diamond Shamrock R & M; provided, that Diamond
Shamrock R & M may not deliver an Uneconomic Notice to Brazos under the terms
of this Section 12.02 for more than an aggregate of the greater of (A) ten
percent (10%) of the Properties then subject to this Ground Lease or (B) ten
(10) Properties. Simultaneously with the delivery of an Uneconomic Notice,
Diamond Shamrock R & M shall deliver to Brazos notice of Diamond Shamrock R &
M's intent to terminate this Ground Lease with respect to such Uneconomic
Property and either to purchase the Uneconomic Property at its Acquisition Cost
on the Basic Rent Payment Date specified in such notice or to sell such
Uneconomic Property on such date; provided, that if the proceeds of the sale of
the Uneconomic Property are less than the Acquisition Cost of such Uneconomic
Property, then in addition to the purchase price Diamond Shamrock R & M shall
pay to Brazos an amount equal to such Acquisition Cost less the proceeds of
such sale.
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Section 12.03. Payment. In connection with any purchase or sale
pursuant to this Article XII, on the Basic Rent Payment Date upon which such
purchase or sale occurs, Diamond Shamrock R & M shall pay or cause the
purchaser to pay to Brazos the purchase price, and Diamond Shamrock R & M shall
pay all Basic Rent payable and any Additional Rent and other amounts owing
hereunder.
Section 12.04. No Right to Use. If Diamond Shamrock R & M terminates
this Ground Lease with respect to any Property pursuant to this Article XII,
neither Diamond Shamrock R & M nor any Affiliate of Diamond Shamrock R & M
shall have the right for one year following the date of such termination to
use, and shall not use, such Property in connection with the development of a
gasoline/convenience store.
ARTICLE XIII
EVENTS OF DEFAULT
Section 13.01. Events of Default. Any of the following events of
default shall constitute an "Event of Default" and shall give rise to the
rights on the part of Brazos described in Section 13.02 hereof:
(a) Failure to Make Payments. Failure of Diamond Shamrock R & M
to pay amounts due to Brazos at the time of any scheduled sale of a Property
hereunder, failure of Diamond Shamrock R & M to pay Basic Rent or Additional
Rent for more than five (5) days after such payment is due pursuant to Article
VI hereof, or failure of Diamond Shamrock R & M to pay any other amount payable
by Diamond Shamrock R & M hereunder within ten (10) days after demand for such
payment.
(b) Failure to Maintain Insurance. Failure of Diamond Shamrock R
& M to maintain the insurance required by Article IX hereof, or default in the
performance of the covenant contained in Section 9.04 hereof.
(c) Other Defaults. Diamond Shamrock R & M shall default in the
performance or observance of any other term, covenant, condition or obligation
contained in this Ground Lease or any Consent and such default shall (i)
continue for thirty (30) days
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after notice shall have been given to Diamond Shamrock R & M by Brazos or any
Assignee specifying such default and requiring such default to be remedied or
(ii) if such default is of a nature that it is not capable of being cured
within such 30-day period, Diamond Shamrock R & M shall not have diligently
commenced curing such default, proceeded diligently and in good faith
thereafter to complete curing such default, or cured such default within ninety
(90) days.
(d) Bankruptcy. (i) The entry of a decree or order for relief in
respect of Diamond Shamrock R & M or Guarantor by a court having jurisdiction
in the premises in an involuntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable Federal or state
bankruptcy, insolvency or other similar law, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
Diamond Shamrock R & M or Guarantor or of any substantial part of Diamond
Shamrock R & M's or the Guarantor's property, or ordering the winding up or
liquidation of Diamond Shamrock R & M's or the Guarantor's affairs, and the
continuance of any such decree or order unstayed and in effect for a period of
thirty (30) consecutive days; or (ii) the general suspension or discontinuance
of Diamond Shamrock R & M's or Guarantor's business operations, its insolvency
(however evidenced) or its admission of insolvency or bankruptcy, or the
commencement by Diamond Shamrock R & M or Guarantor of a voluntary case under
the Federal bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or state bankruptcy, insolvency or other similar law, or the
consent by it to the appointment of or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or other similar
official) of Diamond Shamrock R & M or of Guarantor of any substantial part of
its property, or the making by it of an assignment for the benefit of
creditors, or the failure of Diamond Shamrock R & M or Guarantor generally to
pay its debts as such debts become due, or the taking of corporate action by
Diamond Shamrock R & M or Guarantor in furtherance of any such action.
(e) Payment of Obligations. A default or event of default, the
effect of which is to permit the holder or holders of any Indebtedness of
Diamond Shamrock R & M or Guarantor, or a trustee or agent on behalf of such
holder or holders, to cause such Indebtedness to become due prior to its stated
maturity shall occur under the provisions of any instrument evidencing
Indebtedness in
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excess of $15,000,000 of Diamond Shamrock R & M or Guarantor (or under the
provisions of any agreement pursuant to which such instrument was issued).
(f) Misrepresentations. Any representation or warranty made by
Diamond Shamrock R & M in this Ground Lease or any Consent or which is
contained in any certificate, document or financial or other statement
furnished under or in connection with this Ground Lease proves to be false or
inaccurate in any material respect when made or deemed made.
(g) Guaranty and Residual Guaranty Payment Support. Any
representation or warranty made by Guarantor in the Guaranty, Residual Guaranty
Payment Support, any Consent or any document contemplated hereby or thereby
proves to be false or inaccurate in any material respect when made or deemed
made, or Guarantor defaults in the performance of any term, covenant, condition
or obligation contained in the Guaranty, Residual Guaranty Payment Support, or
any Consent, and such default shall not have been cured within any applicable
grace or cure period.
(h) Default Under Agreement for Ground Lease. An Event of Default
(as defined in the Agreement for Ground Lease) shall occur under the Agreement
for Ground Lease.
(i) Other Agreements. Diamond Shamrock R & M shall default in any
material respect in the performance or observance of any term, covenant,
condition or obligation contained in any other written agreement between
Diamond Shamrock R & M and Brazos and such default shall not have been cured
within any applicable grace or cure period.
(j) Unauthorized Assignment. Any assignment by Xxxxxxx Xxxxxxxx R
& M of any interest in this Agreement (except for any sublease of its interest
in any Property).
Section 13.02. Rights Upon Default. Upon the occurrence and
continuation of any Event of Default Brazos or any Assignee may in its
discretion declare this Ground Lease to be in default and do any one or more of
the following:
(a) Terminate the lease of any or all Property leased hereunder;
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(b) Whether or not any action has been taken under (a) above, sell
any Property or Brazos' interest in any Acquired Ground Lease (with or without
the concurrence or request of Diamond Shamrock R & M);
(c) Hold, use, occupy, lease or keep idle any or all Property as
Brazos in its sole discretion may determine, without any duty to account to
Diamond Shamrock R & M with respect to any such action or inaction or for any
proceeds thereof; and
(d) Exercise any other right or remedy which may be available
under applicable law and in general proceed by appropriate judicial
proceedings, either at law or in equity, to enforce the terms hereof or to
recover damages for the breach hereof.
Suit or suits for the recovery of any default in the payment of any
sum due hereunder or for damages may be brought by Xxxxxx from time to time at
Brazos' election, and nothing herein contained shall be deemed to require
Brazos to await the date whereon this Ground Lease or the term hereof would
have expired by limitation had there been no such default by Diamond Shamrock R
& M or no such termination or cancellation.
The receipt of any payments under this Ground Lease by Brazos with
knowledge of any breach of this Ground Lease by Diamond Shamrock R & M or of
any default by Diamond Shamrock R & M in the performance of any of the terms,
covenants or conditions of this Ground Lease, shall not be deemed to be a
waiver of any provision of this Ground Lease.
No receipt of moneys by Xxxxxx from Diamond Shamrock R & M after the
termination or cancellation hereof in any lawful manner shall reinstate,
continue or extend the Lease Term or any Renewal Term, or affect any notice
theretofore given to Diamond Shamrock R & M, or operate as a waiver of the
right of Brazos to enforce the payment of Basic Rent or Additional Rent or
other charges payable hereunder, or operate as a waiver of the right of Brazos
to recover possession of any Property by proper suit, action, proceedings or
remedy; it being agreed that, after the service of notice to terminate or
cancel this Ground Lease, and the expiration of the time therein specified, if
the default has not been cured in the meantime, or after the commencement of
suit, action or summary proceedings or of any other remedy, or after a final
order, warrant
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or judgment for the possession of the Property, Xxxxxx may demand, receive and
collect any moneys payable hereunder, without in any manner affecting such
notice, proceedings, suit, action, order, warrant or judgment; and any and all
such moneys so collected shall be deemed to be payments on account for the use,
operation and occupation of the Property, or at the election of Brazos, on
account of Diamond Shamrock R & M's liability hereunder. Acceptance of the
keys to any Property, or any similar act, by Xxxxxx, or any agent or employee,
during the term hereof, shall not be deemed to be an acceptance of a surrender
of any Property unless Xxxxxx shall consent thereto in writing.
If, after an Event of Default shall have occurred, Diamond Shamrock R
& M fails to surrender promptly after written request by Xxxxxx or converts or
destroys any Property, Diamond Shamrock R & M shall be liable to Brazos for all
Basic Rent and Additional Rent then due and payable with respect to such
Property, all other amounts payable under this Ground Lease, the Acquisition
Cost of such Property as of the date of such request, conversion or destruction
and all losses, damages and expenses (including, without limitation, attorneys'
fees and expenses) sustained by Brazos by reason of such Event of Default and
the exercise of Xxxxxx' remedies with respect thereto.
If, after an Event of Default Brazos repossesses any Property,
notwithstanding any termination of this Ground Lease, Diamond Shamrock R & M
shall be liable for and Brazos may recover from Diamond Shamrock R & M all
Basic Rent accrued and any Additional Rent owing with respect to such Property
to the date of such repossession, all other amounts payable under this Ground
Lease, and all losses, damages and expenses (including, without limitation,
reasonable attorneys' fees and expenses) sustained by Brazos by reason of such
Event of Default and the exercise of Xxxxxx' remedies with respect thereto. In
addition, Brazos may sell Brazos' interest in any Property upon any terms that
Brazos deems satisfactory, free of any rights of Diamond Shamrock R & M or any
person claiming through or under Diamond Shamrock R & M. In the event of such
sale, in addition to the amounts payable under the first sentence of this
paragraph, Brazos shall be entitled to recover from Diamond Shamrock R & M, as
liquidated damages, and not as a penalty, an amount equal to the Acquisition
Cost of any Property so sold, minus the net proceeds of such sale (deducting
from the gross proceeds of such sale any reasonable legal expenses,
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commissions, sales taxes or other costs or expenses associated with such sale)
received by Brazos; provided however, if the proceeds of such sale are in
excess of the amount payable to Brazos pursuant hereto, such excess shall be
the property of Diamond Shamrock R & M. In lieu of such sale, in addition to
the amounts payable under the first sentence of this paragraph, Brazos may
cause Diamond Shamrock R & M to pay to Brazos, and Diamond Shamrock R & M shall
pay to Brazos, as liquidated damages, and not as a penalty, an amount equal to
the Acquisition Cost of any or all of the Property, and upon payment in full of
all such amounts Brazos shall transfer all of Brazos' right, title and interest
in and to the Property to Diamond Shamrock R & M.
To the extent deemed necessary or advisable by counsel for Brazos,
Xxxxxx shall have the right, and is hereby granted the power by Diamond
Shamrock R & M, to sell all or any part of any Property at public venue
pursuant to power of sale in accordance with the laws of the State in which the
Property is located.
No remedy referred to in this Section 13.02 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to Brazos at law or in equity, and the
exercise in whole or in part by Brazos of any one or more of such remedies
shall not preclude the simultaneous or later exercise by Brazos of any or all
such other remedies. No waiver by Xxxxxx of any Event of Default hereunder
shall in any way be, or be construed to be, a waiver of any future or
subsequent Event of Default.
With respect to the termination of this Ground Lease as to any
Property as a result of an Event of Default, Diamond Shamrock R & M hereby
waives service of any notice of intention to re-enter. Diamond Shamrock R & M
hereby waives any and all rights to recover or regain possession of any
Property or to reinstate this Ground Lease as permitted or provided by or under
any statute, law or decision now or hereafter in force and effect.
Section 13.03. Events of Property Termination. The occurrence of any
of the following shall constitute an Event of Property Termination with respect
to a Property:
(a) Unsatisfactory Title. If at any time title to any
Property is not satisfactory to Brazos or Assignee by reason
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of any Lien or other defect not disclosed in writing at the time of
any advance (even though the same may have existed at the time of any
such advance), except the Permitted Exceptions, and such Lien,
encumbrance or other defect is not corrected within thirty (30) days
after notice to Diamond Shamrock R & M.
(b) Non-Compliance with Governmental Requirements. If
Diamond Shamrock R & M fails to comply with any requirement of any
Governmental Authority with respect to such Property or to contest
such requirement by means of a Permitted Contest under Article XVII
(i) within thirty (30) days after notice in writing of such
requirement shall have been given to Diamond Shamrock R & M by such
Governmental Authority or by Brazos or Assignee, or (ii) if such
requirement is of a nature that it cannot be completely complied with
within such 30-day period, if Diamond Shamrock R & M shall fail after
such notice either diligently to commence complying with such
requirement or to proceed thereafter with reasonable diligence and in
good faith to comply with such requirement; provided, however, that
Diamond Shamrock R & M shall in any event comply with such requirement
prior to the date on which such Property may be seized or sold as a
result of such non-compliance.
(c) Default under Acquired Ground Lease. Diamond
Shamrock R & M shall default in the observance or performance of any
term, covenant or condition of the Acquired Ground Lease relating to
such Property on the part of Brazos, as tenant thereunder, to be
observed or performed, unless any such observance or performance shall
have been waived or not required by the landlord under the Acquired
Ground Lease, or if any one or more of the events referred to in the
Acquired Ground Lease shall occur which would cause the Acquired
Ground Lease to terminate without notice or action by the landlord
thereunder or which would entitle the landlord under the Acquired
Ground Lease to terminate the Acquired Ground Lease and the term
thereof by the giving of notice to Brazos, as tenant thereunder, or if
the Acquired Ground Lease shall be terminated or canceled for any
reason or under any circumstance whatsoever, or if any of the terms,
covenants or conditions of the Acquired Ground Lease shall in any
manner be modified, changed, supplemented, altered or amended in any
material respect without the consent of Brazos.
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(d) Commencement of Construction. Diamond Shamrock R & M
shall fail to commence construction of a Facility on a Property within
the time period set forth in Section 2.02 of the Agreement for
Facilities Lease.
Section 13.04. Brazos' Right upon Event of Property Termination. If
any Event of Property Termination with respect to a Property shall occur,
Brazos may, as liquidated damages and not as a penalty, require Diamond
Shamrock R & M to purchase such Property on the next Basic Rent Payment Date at
a price equal to the Acquisition Cost for such Property by giving notice of
such required purchase. In connection with any such purchase under this
Section 13.04, on the Basic Rent Payment Date upon which such purchase shall
occur, Diamond Shamrock R & M shall pay to Brazos, in addition to any purchase
price payable, all Basic Rent payable and any Additional Rent and other amounts
owing hereunder with respect to such Property. At the time of such sale,
Diamond Shamrock R & M shall be required to pay to Brazos the obligations,
costs, losses, damages, and expenses (including, without limitation, reasonable
attorneys' fees and expenses) sustained by Brazos by reason of such Event of
Property Termination and exercise of Brazos' rights under this Section 13.04.
ARTICLE XIV
LOSS OF OR DAMAGE TO PROPERTY
Section 14.01. Diamond Shamrock R & M's Risk. Diamond Shamrock R & M
hereby assumes all risk of loss of or damage to Property, however caused. No
loss of or damage to any Property shall impair any obligation of Diamond
Shamrock R & M under this Ground Lease, which shall continue in full force and
effect with respect to any lost or damaged Property.
Section 14.02. Repair. In the event of damage of any kind whatsoever
to any Property (unless the same is determined by Diamond Shamrock R & M to be
damaged beyond repair) Diamond Shamrock R & M, at its own cost and expense,
shall place the same in good operating order, repair, condition and appearance.
Section 14.03. Property Damaged Beyond Repair. If any Property is
seized, confiscated, rendered unfit for use or if any
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improvements thereon are destroyed or damaged beyond repair (in the reasonable
judgment of Diamond Shamrock R & M), or if the use of the Property by Diamond
Shamrock R & M or the use of any improvement by the party entitled thereto in
the ordinary course of business is prevented by the act of any third person or
persons or governmental instrumentality for a period exceeding ninety (90) days
(other than an act which is a Taking which is substantial as described in
Section 15.01 of this Ground Lease), or if the Acquired Ground Lease applicable
to such Property is terminated due to casualty, or if such Property is attached
(other than on a claim against Brazos as to which Diamond Shamrock R & M is not
obligated to indemnify Brazos) and the attachment is not removed within ninety
(90) days, or if a Taking which is substantial as described in Section 15.01
shall occur, then in any such event, (i) Diamond Shamrock R & M shall promptly
notify Brazos and Assignee in writing of such event, (ii) on the Basic Rent
Payment Date following such event, unless such Basic Rent Payment Date occurs
within ten (10) days of such event, in which case on the next Basic Rent
Payment Date, Diamond Shamrock R & M shall pay to Brazos an amount equal to the
Acquisition Cost of such Property (after deducting any insurance proceeds
received by Brazos in respect of such event or the net amount after Brazos'
expenses of proceeds to Brazos from any award or sale made in connection with a
Taking), provided that insurance or net Taking proceeds, if any, received by
Brazos in excess of the Acquisition Cost of the affected Property shall be paid
by Brazos to Diamond Shamrock R & M, (iii) the Lease Term or Renewal Term of
such Property shall continue until the Basic Rent Payment Date on which Brazos
receives payment from Diamond Shamrock R & M of the amount payable pursuant to
this Section 14.03 and the Basic Rent and any Additional Rent and other amounts
owing hereunder, and shall thereupon terminate and (iv) Brazos shall on such
Basic Rent Payment Date transfer title to such Property to Diamond Shamrock R &
M, and Diamond Shamrock R & M shall be subrogated to Brazos' rights in the
affected transaction.
ARTICLE XV
CONDEMNATION OF PROPERTY
Section 15.01. Taking of Substantially all of a Property. If Diamond
Shamrock R & M or Brazos shall receive notice that the use, occupancy or title
to all or substantially all of a Property is to
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be taken, requisitioned or sold in, by or on account of eminent domain
proceedings or other action by any person or authority having the power of
eminent domain (such events collectively referred to as a "Taking"), and such
Taking is substantial, then the Lease Term or Renewal Term shall terminate as
provided in Section 14.03. A Taking shall be deemed substantial if the
remainder of the Property is unusable for Diamond Shamrock R & M's ordinary
business purposes or the Acquired Ground Lease applicable to such Property is
terminated as a result of such Taking.
Section 15.02. Taking of Less than Substantially all of a Property.
If less than substantially all of a Property is subject to a Taking, then this
Ground Lease shall continue in effect as to the portion of the Property not
taken and Diamond Shamrock R & M, at its own cost and expense, shall place the
same in good operating order, repair, condition and appearance. Brazos and
Diamond Shamrock R & M each hereby waives any statutory or common law right
allowing either of them to petition any court to terminate this Ground Lease in
the event of a Taking of less than substantially all of the Property.
Section 15.03. Grant of Minor Easements. So long as no Event of
Default or Event of Property Termination hereunder has occurred and is
continuing, Diamond Shamrock R & M shall have the right (i) to xxxxx xxxxx
easements for the benefit of any Property or which are deemed reasonably
necessary for Diamond Shamrock R & M's use of the Property; (ii) voluntarily to
dedicate or convey, as required, portions of any Property for road, highway and
other public purposes as required in the good faith judgment of Diamond
Shamrock R & M in order to obtain or maintain the use of all or part of a
Property for the purposes intended by Diamond Shamrock R & M; and (iii)
voluntarily to execute petitions to have any Property or a portion thereof
annexed to any municipality or included within any utility, highway or other
improvement or service district, provided that no more than minor restoration
is required. If Diamond Shamrock R & M receives any monetary consideration for
such easement or dedication, Diamond Shamrock R & M shall promptly deliver such
consideration to Brazos. Diamond Shamrock R & M shall exercise the above power
to grant without the joinder of Brazos, except that Xxxxxx will cooperate, at
Diamond Shamrock R & M's expense, as necessary and join in the execution of any
appropriate instrument. As a condition precedent to Diamond Shamrock R & M's
exercise of any of Diamond Shamrock R & M's powers under this
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Article, Xxxxxxx Xxxxxxxx R & M shall give Brazos ten (10) days' prior written
notice of the proposed action. Upon the giving of such notice, Diamond
Shamrock R & M shall be deemed to have certified that such action will not
materially adversely affect either the market value of such Property or the use
of such Property for its intended purpose, will not affect Brazos' or any
Assignee's ability to exercise its rights and remedies under this Ground Lease
and that Diamond Shamrock R & M undertakes to remain obligated under this
Ground Lease to the same extent as if Diamond Shamrock R & M had not exercised
its powers under this Article and Diamond Shamrock R & M will perform all
obligations under such instrument and shall prepare all required documents and
provide all other instruments and certificates as Brazos may reasonably
request.
ARTICLE XVI
LEASEHOLD INTERESTS
The following provisions relate to each lease (an "Acquired Ground
Lease") under which a leasehold interest in a Property is being subleased to
Diamond Shamrock R & M hereunder:
(a) This Ground Lease is subject and subordinate to all of the
terms, covenants, provisions, conditions and agreements contained in each
Acquired Ground Lease and the matters to which the Acquired Ground Lease is
subject and subordinate.
(b) Diamond Shamrock R & M hereunder covenants and agrees to
perform and to observe all of the terms, covenants, provisions, conditions and
agreements of the underlying Acquired Ground Lease on Brazos' part as lessee
thereunder to be performed and observed including, without limitation, payment
of all rent, additional rent and other amounts payable by Brazos as lessee
under the Acquired Ground Lease, to the end that all things shall be done which
are necessary to keep unimpaired the rights of Brazos as lessee under the
Acquired Ground Lease.
(c) Diamond Shamrock R & M covenants and agrees that it will not
do or cause to be done or suffer or permit any act or thing to be done which
would or might cause such Acquired Ground Lease or the rights of Brazos as
lessee thereunder to be canceled,
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terminated or forfeited or which would make Diamond Shamrock R & M or Brazos
liable for any losses, costs, liabilities, damages, claims, penalties or other
expenses.
(d) Xxxxxxx Xxxxxxxx R & M covenants and agrees pursuant to
Article X hereof to indemnify and hold harmless Brazos and any Assignee from
and against any and all liability, loss, damage, suits, penalties, claims and
demands of every kind and nature (including, without limitation, reasonable
attorneys' fees and expenses) by reason of Diamond Shamrock R & M's failure to
comply with any Acquired Ground Lease or the provisions of this Article XVI.
(e) Brazos and Diamond Shamrock R & M agree that any services
which are required to be provided or repairs or restorations which are required
to be made in accordance with the provisions of such Acquired Ground Lease by
the lessor thereunder will be provided and made by such lessor, and Brazos
shall have no obligation to provide any such services or to make any such
repairs or restorations. Brazos shall in no event be liable to Diamond
Shamrock R & M nor shall the obligations of Diamond Shamrock R & M hereunder be
impaired or the performance thereof excused because of any failure or delay on
the part of the lessor under the Acquired Ground Lease in providing such
services or making such restorations or repairs and such failure or delay shall
not constitute a basis for any claim against Brazos or any offset against any
amount payable to Brazos under this Ground Lease.
(f) If Brazos' interest under any Acquired Ground Lease shall
expire, terminate or otherwise be extinguished, the Ground Lease of the
Property to which such Acquired Ground Lease relates shall thereupon terminate
as provided in this paragraph. Upon such expiration, termination or
extinguishment (i) on the Basic Rent Payment Date next succeeding such event,
Diamond Shamrock R & M shall pay to Brazos an amount equal to the Acquisition
Cost of such Property and (ii) the Lease Term or Renewal Term of such Property
shall continue until the date on which Brazos receives payment from Diamond
Shamrock R & M of the amount payable pursuant to this paragraph (f) and of all
Basic Rent payable and any Additional Rent and other amounts owing hereunder,
and shall then terminate upon the payment of such amounts.
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ARTICLE XVII
PERMITTED CONTESTS
(a) Diamond Shamrock R & M shall not be required, nor shall Brazos
have the right, to pay, discharge or remove any tax, assessment, levy, fee,
rent, charge, Lien or encumbrance, or to comply or cause any Property to comply
with any Legal Requirements applicable to any Property or the occupancy, use or
operation thereof, so long as no Event of Default, Event of Property
Termination, Potential Default or Potential Property Termination exists under
this Ground Lease with respect to any Property, and, in the opinion of Diamond
Shamrock R & M's counsel, Diamond Shamrock R & M shall have reasonable grounds
to contest, and shall be diligently contesting, the existence, amount,
applicability or validity thereof by appropriate proceedings, which proceedings
in the reasonable judgment of Brazos, (i) shall not involve any material danger
that any Property or any Basic Rent or any Additional Rent would be subject to
sale, forfeiture or loss, as a result of failure to comply therewith, (ii)
shall not affect the payment of any Basic Rent or any Additional Rent or other
sums due and payable hereunder, (iii) unless any criminal liability could
result from a failure to comply therewith, could not reasonably be expected to
cause either Brazos or any Assignee to incur civil liability which, in the sole
judgment of Brazos or any Assignee, is not adequately indemnified (Diamond
Shamrock R & M's obligations under Article X of this Ground Lease shall be
deemed to be adequate indemnification if no Event of Default, Event of Property
Termination, Potential Default or Potential Property Termination exists and if
such civil liability is reasonably likely to be less than $500,000 per Property
and $1,000,000 in the aggregate for all Properties), (iv) shall be permitted
under the provisions of the Acquired Ground Lease, if any, on such Property,
(v) if involving taxes, shall suspend the collection of such taxes, and (vi)
shall be permitted under and be conducted in accordance with the provisions of
any other instrument to which Diamond Shamrock R & M or the Property is subject
and shall not constitute a default thereunder. Diamond Shamrock R & M shall
conduct all such contests in good faith and with due diligence and shall
promptly after the final determination (including appeals) of such contest, pay
and discharge all amounts which shall be determined to be payable therein.
Notwithstanding anything in this paragraph (a) to the contrary, Diamond
Shamrock R & M shall not be obligated to actively
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contest any mechanics' or materialmen's Lien or claim which does not exceed
$100,000, provided that the failure to so contest does not violate clauses
(i)-(iv) or (vi) above, provided further, that such Lien is junior to any Lien
of an Assignee on such Property, and provided further that Diamond Shamrock R &
M shall in any event diligently contest and defend against the enforcement of
any such Lien or claim in good faith and with due diligence and shall promptly,
after the final determination (including appeals of such contest), pay and
discharge all amounts which shall be determined to be payable therein.
(b) At least ten (10) days prior to the commencement thereof,
Diamond Shamrock R & M shall notify Brazos in writing of any such proceeding in
which the amount in contest exceeds $100,000, and shall describe such
proceeding in reasonable detail. If a taxing authority or subdivision thereof
proposes an additional assessment or levy of any tax for which Diamond Shamrock
R & M is obligated to reimburse Brazos under this Ground Lease, or if Brazos is
notified of the commencement of an audit or similar proceeding which could
result in such an additional assessment, then Brazos shall in a timely manner
notify Diamond Shamrock R & M in writing of such proposed levy or proceeding.
ARTICLE XVIII
MISCELLANEOUS
Section 18.01. Survival. All agreements, indemnities, representations
and warranties, and the obligation to pay Additional Rent contained in this
Ground Lease shall survive the expiration or other termination hereof.
Section 18.02. Entire Agreement. This Ground Lease and the Property
Leasing Records covering Property leased pursuant hereto and the instruments,
documents or agreements referred to herein constitute the entire agreement
between the parties and no representations, warranties, promises, guarantees or
agreements, oral or written, express or implied, have been made by any party
hereto with respect to this Ground Lease or the Property, except as provided
herein or therein.
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Section 18.03. Modifications. This Ground Lease may not be amended,
modified or terminated, nor may any obligation hereunder be waived orally, and
no such amendment, modification, termination or waiver shall be effective for
any purpose unless it is in writing and is signed by the party against whom
enforcement thereof is sought. A waiver on one occasion shall not be construed
to be a waiver with respect to any other occasion.
Section 18.04. GOVERNING LAW. THIS GROUND LEASE SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF ARKANSAS WITH RESPECT TO PROPERTY LOCATED IN ARKANSAS, THE LAWS OF
THE STATE OF COLORADO WITH RESPECT TO PROPERTY LOCATED IN COLORADO, THE LAWS OF
THE STATE OF KANSAS WITH RESPECT TO PROPERTY LOCATED IN KANSAS, THE LAWS OF THE
STATE OF LOUISIANA WITH RESPECT TO PROPERTY LOCATED IN LOUISIANA, THE LAWS OF
THE STATE OF NEW MEXICO WITH RESPECT TO PROPERTY LOCATED IN NEW MEXICO, THE
LAWS OF THE STATE OF OKLAHOMA WITH RESPECT TO PROPERTY LOCATED IN OKLAHOMA, AND
THE LAWS OF THE STATE OF TEXAS WITH RESPECT TO PROPERTY LOCATED IN TEXAS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE. ANY PROVISION
OF THIS GROUND LEASE WHICH IS PROHIBITED BY LAW OR UNENFORCEABLE IN ANY
JURISDICTION SHALL, AS TO SUCH JURISDICTION, BE INEFFECTIVE TO THE EXTENT OF
SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT INVALIDATING THE REMAINING
PROVISIONS HEREOF, AND THE PARTIES HERETO SHALL NEGOTIATE IN GOOD FAITH
APPROPRIATE MODIFICATIONS TO REFLECT SUCH CHANGES AS MAY BE REQUIRED BY LAW,
AND, AS NEARLY AS POSSIBLE, TO PRODUCE THE SAME ECONOMIC EFFECTS AS THE
PROVISION WHICH IS PROHIBITED OR UNENFORCEABLE; AND ANY SUCH PROHIBITION OR
UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER
UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, DIAMOND SHAMROCK R & M AND BRAZOS HEREBY WAIVE ANY
PROVISION OF LAW WHICH RENDERS ANY PROVISION HEREOF PROHIBITED OR UNENFORCEABLE
IN ANY RESPECT.
Section 18.05. No Offsets. The obligations of Diamond Shamrock R & M
to pay all amounts payable pursuant to this Ground Lease (including
specifically and without limitation amounts payable due under Articles VI and X
hereof) shall be absolute and unconditional under any and all circumstances of
any character, and such amounts shall be paid without notice, demand, defense,
setoff, deduction or counterclaim and without abatement, suspension, deferment,
diminution or reduction of any kind whatsoever, except
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as herein expressly otherwise provided. The obligation of Diamond Shamrock R &
M to lease and pay Basic Rent, Additional Rent or any other amounts for any and
all Property is without any warranty or representation, express or implied, as
to any matter whatsoever on the part of Brazos or any Assignee or any Affiliate
of either, or anyone acting on behalf of any of them.
NEITHER BRAZOS NOR ANY ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR
ANYONE ACTING ON BEHALF OF ANY OF THEM, MAKES ANY REPRESENTATION OR WARRANTY OF
ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, AS TO
THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR USE,
MERCHANTABILITY, CONFORMITY TO SPECIFICATION, ENVIRONMENTAL CONDITION
(INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS), OR ANY OTHER
CHARACTERISTIC, OF ANY PROPERTY, OR AS TO WHETHER ANY PROPERTY OR THE
OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF COMPLIES WITH ANY LAWS, RULES,
REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN BRAZOS AND DIAMOND SHAMROCK R & M, ANY ASSIGNEE OR ANY
INDEMNIFIED PERSON, AND TO THE EXTENT ALLOWED BY LAW, DIAMOND SHAMROCK R & M
ASSUMES ALL RISKS AND WAIVES ANY AND ALL DEFENSES, SET-OFFS, DEDUCTIONS,
COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR FUTURE, TO ITS OBLIGATION TO PAY
BASIC RENT, ADDITIONAL RENT AND ALL OTHER AMOUNTS PAYABLE HEREUNDER, INCLUDING,
WITHOUT LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY, FITNESS FOR
USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION, OR ANY OTHER QUALITY OR
CHARACTERISTIC OF ANY PROPERTY, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT, DEFENSE OR
OTHER RIGHT WHICH XXXXXXX XXXXXXXX R & M MAY HAVE AGAINST BRAZOS, ANY ASSIGNEE,
OR ANY INDEMNIFIED PERSON FOR ANY REASON WHATSOEVER ARISING OUT OF THIS OR ANY
OTHER TRANSACTION OR MATTER;
(C) ANY DEFECT IN TITLE OR OWNERSHIP OF ANY PROPERTY OR ANY TITLE
ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS OR DESTRUCTION
OF, OR DAMAGE TO, ANY PROPERTY, IN WHOLE OR IN PART, OR CESSATION OF THE USE OR
POSSESSION OF ANY PROPERTY BY XXXXXXX XXXXXXXX R & M FOR ANY REASON WHATSOEVER
AND OF WHATEVER DURATION,
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OR ANY CONDEMNATION, CONFISCATION, REQUISITION, SEIZURE, PURCHASE, TAKING OR
FORFEITURE OF ANY PROPERTY, IN WHOLE OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE PROPERTY BY XXXXXXX XXXXXXXX R & M;
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST DIAMOND SHAMROCK R & M OR BRAZOS OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR OTHER
TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS, CONSENTS,
AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS GROUND LEASE OR ANY
OTHER INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF BRAZOS OR DIAMOND
SHAMROCK R & M TO ENTER INTO THIS GROUND LEASE; OR
(I) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER, WHETHER OR
NOT SIMILAR TO ANY OF THE FOREGOING.
DIAMOND SHAMROCK R & M HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME
HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE,
CANCEL, QUIT, RESCIND OR SURRENDER THIS GROUND LEASE EXCEPT IN ACCORDANCE WITH
THE EXPRESS TERMS HEREOF.
Section 18.06. Non-Recourse. Brazos' obligations hereunder are
intended to be the limited obligations of the limited partnership and of the
corporation which is the general partner thereof. Notwithstanding any other
provision of this Ground Lease, Diamond Shamrock R & M agrees that the personal
liability of Brazos and the partners comprising Brazos shall be strictly and
absolutely limited to the Property and no recourse for the payment of any
amount due under this Ground Lease, or for any claim based thereon or otherwise
in respect thereof, shall be had against any other assets of the limited
partnership or of the general or of any limited partner of Brazos or any
incorporator, shareholder, officer, director or Affiliate (past, present or
future) of such general partner or limited partner, or of any Affiliate of
either, or of any successor corporation to any corporate general partner or
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any corporate limited partner of Brazos, it being understood that Xxxxxx is a
limited partnership entering into the transactions involved in and relating to
this Ground Lease on the express understanding aforesaid.
Section 18.07. Notices.
(a) Any notice or request which by any provision of this Ground
Lease is required or permitted to be given by either party to the other shall
be deemed to have been given when delivered by hand (including, delivery by
courier), deposited in the mail, postage prepaid, by certified or registered
mail or, if promptly confirmed by mail or by hand-delivery, as provided above,
when sent by telex, or other written telecommunication, addressed to the
following specified addresses or to such other addresses as Brazos or Diamond
Shamrock R & M may specify by written notice to the other party:
If to Brazos:
Brazos River Leasing L.P.
0000 Xxxxxx Xxxxx Xxxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Diamond Shamrock R & M:
(i) By Mail:
Diamond Shamrock Refining and Marketing Company
P.O. Box 696000
San Antonio, Texas 78269-6000
Attention: Treasurer
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(ii) By Hand Delivery:
Diamond Shamrock Refining and Marketing Company
0000 Xxxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxx 00000
Attention: Treasurer
Telephone: (000) 000-0000
Telex: 000-000-0000
Answerback: DIAMSHAM SNT UQ
Telecopy: (000) 000-0000
With a copy to any Assignee at such address as such Assignee may specify by
written notice to Brazos and Diamond Shamrock R & M.
(b) Brazos shall within five (5) Business Days give to Diamond
Shamrock R & M a copy of all notices received by Brazos pursuant to any Credit
Agreement and any other notices received with respect to any Property.
Section 18.08. Usury. No provision of this Ground Lease, the
Agreement for Ground Lease or any other instrument relating to this Ground
Lease, shall require the payment or permit the collection of interest in excess
of the maximum non-usurious interest rate under applicable law (the "Maximum
Rate"). If any excess interest in such respect is so provided for, or shall be
adjudicated to be so provided for, the provisions of this Section 18.08 shall
govern, and neither Diamond Shamrock R & M nor its successors or assigns shall
be obligated to pay the amount of such interest to the extent it is in excess
of the Maximum Rate. In determining the Maximum Rate, any interest shall be
spread over the term of the Ground Lease to the extent permitted by applicable
U.S. Federal or state law, notwithstanding the actual time for the payment of
any rent or other amounts hereunder. It is expressly stipulated and agreed to
be the intent of Brazos and Diamond Shamrock R & M at all times to comply with
applicable state law governing the Maximum Rate or the amount of interest
payable pursuant to this Ground Lease (or applicable U.S. Federal law to the
extent that it permits Brazos to contract for, charge, take, reserve or receive
a greater amount of interest than under state law). If the applicable law is
ever judicially interpreted so as to render usurious any amount called for
under the Ground Lease, the Agreement for Ground Lease or any of the other
documents relating to this Ground Lease or any amount contracted for, charged,
taken, reserved or received with respect
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to this Ground Lease, or if Xxxxxx' exercise of any option herein or in any
other document contained to accelerate the payment of amounts required
hereunder results in Diamond Shamrock R & M having paid any interest in excess
of that permitted by applicable law, then it is Brazos' and Diamond Shamrock R
& M's intent that all excess amounts theretofore collected by Xxxxxx be
credited on the remaining balance of payments due hereunder (or, if all amounts
due hereunder have been or would thereby be paid in full, refunded to Diamond
Shamrock R & M) and the provisions of this Ground Lease shall immediately be
deemed reformed in the amounts thereafter collectible hereunder reduced,
without the necessity of the execution of any new documents, so as to comply
with the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and under any other document relating hereto.
If at any time the amount of any interest for a year, would, but for this
Section 18.08, exceed the amount of interest that would have been accrued
during such year if the Maximum Rate had from time to time been in effect, the
total interest payable for such year shall be limited to the amount that would
have been accrued if the Maximum Rate had from time to time been in effect, and
to the fullest extent permitted by applicable law, such excess shall be (i)
spread and allocated to the preceding periods in which the interest paid was
less than the interest that would have been accrued at the Maximum Rate or (ii)
spread and allocated to subsequent periods in which the total payments on
account of interest are less than the interest that would have accrued at the
Maximum Rate.
Section 18.09. No Merger. There shall be no merger of this Ground
Lease or of the leasehold estate hereby created with the fee estate in any
Property by reason of the fact that the same person acquires or holds, directly
or indirectly, this Ground Lease or the leasehold estate hereby created or any
interest herein or in such leasehold estate as well as the fee estate in any
Property or any interest in such fee estate.
Section 18.10. Sale or Assignment by Brazos.
(a) Subject to Section 18.13(b), Brazos shall not sell or assign its
right, title, interest or obligations under this Ground Lease, except that
Brazos shall have the right to finance the acquisition and ownership of the
Property by selling, assigning or granting a security interest in its right,
title and interest in
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this Ground Lease and any or all amounts due from Diamond Shamrock R & M or any
third party under this Ground Lease, provided that any such sale, assignment or
grant of a security interest shall be subject to the rights and interests of
Diamond Shamrock R & M under this Ground Lease.
(b) Upon the occurrence of an event of default under the Credit
Agreement, any Assignee shall, except as otherwise agreed by Xxxxxx and
Assignee, have all the rights, powers, privileges and remedies of Brazos
hereunder, and Xxxxxxx Xxxxxxxx R & M's obligations as between itself and such
Assignee hereunder shall not be subject to any claims or defense that Diamond
Shamrock R & M may have against Brazos. Upon written notice to Diamond
Shamrock R & M of any such assignment, Diamond Shamrock R & M shall attorn to
any Assignee, and Diamond Shamrock R & M shall thereafter make payments of
Basic Rent, Additional Rent and other sums due hereunder to Assignee, to the
extent specified in such notice, and such payments shall discharge the
obligation of Diamond Shamrock R & M to Brazos hereunder to the extent of such
payments. Anything contained herein to the contrary notwithstanding, no
Assignee shall be obligated to perform any duty, covenant or condition required
to be performed by Xxxxxx hereunder, and any such duty, covenant or condition
shall be and remain the sole obligation of Brazos.
Section 18.11. Income Taxes. Xxxxxx agrees that it will not file any
Federal, state or local income tax returns during the Lease Term or Renewal
Term, if any, with respect to any Property that are inconsistent with the
treatment of Diamond Shamrock R & M as owner of such Property for Federal,
state and local income tax purposes.
Section 18.12. Transfer on As-Is Basis. In connection with any sale
of Property pursuant to this Ground Lease, when Brazos transfers title, such
transfer shall be on an as-is, non-installment sale basis, without warranty by,
or recourse to, Brazos, but free of the Lien created by a Credit Agreement.
Section 18.13. Right to Perform for Diamond Shamrock R & M.
(a) If Diamond Shamrock R & M fails to perform or comply with any
of its covenants or agreements contained in this Ground Lease, Brazos may, upon
notice to Diamond Shamrock R & M but without waiving or releasing any
obligations or default, itself perform or
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comply with such covenant or agreement, and the amount of the reasonable
expenses of Brazos incurred in connection with such performance or compliance,
shall be payable by Diamond Shamrock R & M, not later than ten (10) days after
written notice by Xxxxxx.
(b) Without in any way limiting the obligations of Xxxxxxx
Xxxxxxxx R & M hereunder, Xxxxxxx Xxxxxxxx R & M hereby irrevocably appoints
Brazos as its agent and attorney at the time at which Diamond Shamrock R & M is
obligated to deliver possession of any Property to Brazos, to demand and take
possession of such Property in the name and on behalf of Diamond Shamrock R & M
from whomsoever shall be at the time in possession thereof.
Section 18.14. Merger, Consolidation or Sale of Assets.
(a) Diamond Shamrock R & M may not consolidate with or merge into
any other corporation or sell all or substantially all of its assets to any
Person, except that Diamond Shamrock R & M may consolidate with or merge into
any other corporation, or sell all or substantially all of its assets to any
Person; provided that, the surviving corporation or transferee Person shall
assume, by execution and delivery of instruments satisfactory to Brazos, the
obligations of Diamond Shamrock R & M hereunder and become successor to Diamond
Shamrock R & M, but Diamond Shamrock R & M, if it is the surviving corporation,
shall not thereby be released, without the consent of Brazos, from its
obligations hereunder and, provided further, that such surviving corporation or
transferee Person will, on a pro forma basis, immediately after such
consolidation, merger or sale, possess a consolidated net worth greater than or
equal to that of Diamond Shamrock R & M immediately prior to such
consolidation, merger or sale and no Event of Default or Event of Property
Termination shall have occurred or result therefrom.
(b) Brazos may not consolidate with or merge into any other
corporation or sell all or substantially all of its assets to any Person,
except that Brazos may consolidate with or merge into any other corporation, or
sell all or substantially all of its assets to any Person; provided that, the
surviving corporation or transferee Person shall assume, by execution and
delivery of instruments satisfactory to Diamond Shamrock R & M, the obligations
of Brazos hereunder and become successor to Brazos, but Brazos shall not
thereby be released without the consent of Diamond
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Shamrock R & M from its obligations hereunder and, provided further, that such
surviving corporation or transferee Person will, on a pro forma basis,
immediately after such consolidation, merger or sale, possess a consolidated
net worth greater than or equal to that of Brazos immediately prior to such
consolidation, merger or sale and, provided further, that the Guaranty and the
Residual Guaranty Payment Support shall remain in full force and effect for the
benefit of the surviving corporation or transferee Person and Diamond Shamrock
R & M shall provide to Brazos such documents, opinions or other assurances to
such effect as Brazos may reasonably request.
(c) The terms and provisions of this Ground Lease shall be binding
upon and inure to the benefit of Brazos and Diamond Shamrock R & M and their
respective successors and assigns.
Section 18.15. Expenses. Diamond Shamrock R & M shall pay all of the
out-of-pocket costs and expenses incurred by Brazos and any Assignee in
connection with this Ground Lease, including without limitation the reasonable
fees and disbursements of counsel to Brazos and counsel to any Assignee.
Section 18.16. Payment of Taxes. In connection with the sale or
purchase of Property pursuant to this Ground Lease, Diamond Shamrock R & M
shall pay or shall cause the purchaser of such Property to pay in addition to
the purchase price, all transfer taxes, transfer gains taxes, mortgage
recording tax, if any, recording and filing fees and all other similar taxes,
fees, expenses and closing costs (including reasonable attorneys' fees) in
connection with the conveyance of such Property to Diamond Shamrock R & M or
any purchaser; provided that Diamond Shamrock R & M or any purchaser shall not
be required to pay U.S. Federal net income or capital gains taxes or to pay
state and local net income or capital gains taxes which are imposed by a state
or locality because of a relationship between Brazos and such state or locality
unrelated to ownership of such Property.
Section 18.17. Rule Against Perpetuities. The parties hereto do not
intend any interest created by this Ground Lease to be a perpetuity or to be
subject to invalidation under the perpetuities rule, however, if the rule is to
be applied, then the perpetuities period shall be twenty-one (21) years after
the last to die of the
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currently living great-grandchildren and/or grandchildren of Xxxxxx X. X. Xxxx.
Section 18.18. Reexecution. The parties hereto shall reexecute this
Ground Lease to the extent necessary to make this Ground Lease enforceable
under the laws of any State in which a Property is located.
Section 18.19. Purchase or Sale of Facility. Notwithstanding
anything to the contrary herein, Diamond Shamrock R & M shall not have the
right to purchase any Property or arrange for the sale of any Property to a
third party unless simultaneous with such purchase or sale any Facility located
on such Property is purchased by Xxxxxxx Xxxxxxxx R & M or sold to a third
party.
Section 18.20. Severability. In case one or more provisions of this
Ground Lease shall be invalid, illegal or unenforceable in any respect under
any applicable law, the validity, legality and enforceability of the remaining
provisions contained herein shall not be affected or impaired thereby.
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IN WITNESS WHEREOF, Xxxxxx and Diamond Shamrock R & M have caused this
Amended and Restated Ground Lease Agreement to be executed and delivered by
their duly authorized officers as of the day and year first above written.
BRAZOS RIVER LEASING L.P.
By: Headwater Investments L.P.,
its General Partner
By: Headwater Holdings, Inc.,
its General Partner
By: /s/. XXXXXXX X. XXXXXX
-----------------------------------
Xxxxxxx X. Xxxxxx,
President
DIAMOND SHAMROCK REFINING
(Corporate Seal) AND MARKETING COMPANY
ATTEST:
By: /s/ X.X. XXXXXX
---------------------- -----------------------------------
Name: X.X. Xxxxxx
Title:
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STATE OF NEW YORK Section
Section
COUNTY OF NEW YORK Section
BEFORE ME, the undersigned authority, personally appeared Xxxxxxx X.
Xxxxxx, President of HEADWATER HOLDINGS, INC., a Texas corporation, the general
partner of HEADWATER INVESTMENTS L.P.,, a Texas limited partnership, the
general partner of BRAZOS RIVER LEASING L.P., a Texas limited partnership,
known to me to be the person whose name is subscribed to the foregoing
instrument, and who acknowledged to me that he executed same for the purposes
herein expressed and in the capacity herein stated.
WITNESS MY HAND AND SEAL OF OFFICE this _____ day of December 1996.
NOTARY PUBLIC, STATE OF NEW YORK
STATE OF NEW YORK Section
Section
COUNTY OF NEW YORK Section
BEFORE ME, the undersigned authority, personally appeared
_____________________________, __________________ of DIAMOND SHAMROCK REFINING
AND MARKETING COMPANY, a Delaware corporation, known to me to be the person
whose name is subscribed to the foregoing instrument, and who acknowledged to
me that he executed same for the purposes herein expressed and in the capacity
herein stated.
WITNESS MY HAND AND SEAL OF OFFICE this _____ day of December 1996.
NOTARY PUBLIC, STATE OF NEW YORK
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EXHIBIT A
SCHEDULE OF INSURANCE
1. All risk direct physical damage insurance for the Property and
all improvements, equipment and structures located thereon in the amounts and
subject to the deductibles and self-insurance provisions that are applicable
under like insurance coverage maintained by Lessee for similar property and
equipment owned, leased or held by Lessee.
2. Comprehensive general public liability insurance, including,
without limitation, general auto liability, covering legal liability against
claims for bodily injury, death or property damage, occurring on, in or about
each Property and the improvements, equipment and structures located thereon,
or occurring as a result of the use of products sold or services rendered at a
Property in the minimum amount of $1,000,000 with respect to any one
occurrence, accident or disaster or incidence of negligence, together with
excess liability insurance covering the same risks to a combined single limit
of a minimum of $15,000,000 per occurrence, or any combination of primary and
excess liability insurance with the equivalent cumulative limits per
occurrence, which primary and excess liability coverage may be subject to such
deductibles and the Lessee may self-insure with respect to such coverage to the
extent of $1,000,000 per occurrence, or to such greater extent as may be
approved by Lessor in writing.
3. Pollution insurance covering physical damage to the Property
and the improvements, equipment, and structures located thereon and the legal
liability of Lessor and Lessee against claims for bodily injury, death or
property damage resulting from the seepage of or pollution by petroleum
products which are stored, used, handled or sold on or at Property, in the
minimum amount as may be required by law, or, if greater, in the minimum amount
as may be applicable under like insurance coverage maintained by Lessee for
similar property and equipment owned, leased or held by Lessee, under any
combination of primary and excess coverage, which primary and excess pollution
coverage may be subject to such deductibles and the Lessee may self-insure with
respect to such coverage to the extent of $10,000,000 per occurrence, or to
such greater extent as may be approved by Lessor in writing.
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4. Workers' compensation and employers' liability insurance
covering Diamond Shamrock R & M's employees in such amount as is required by
law, or if permissible under state law, any legally appropriate alternative
providing substantially similar compensation for injured workers.
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