[CAPTION]
TRANSACTION AGREEMENT
(1997 Pep Boys II Leased Property)
TABLE OF CONTENTS
Page
Preliminary Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
ARTICLE
I. FUNDING
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.01. Advances under Instruments . . . . . . . . . . . . . . .2
Section 1.02. Closing Date . . . . . . . . . . . . . . . . . . . . . .4
Section 1.03. Conditions for Initial Advance . . . . . . . . . . . . .5
Section 1.04. Conditions Precedent to All Advances . . . . . . . . . .5
Section 1.05. Advance Process. . . . . . . . . . . . . . . . . . . . 12
Section 1.06. Form of Documents. . . . . . . . . . . . . . . . . . . 13
Section 1.07. Transaction Fees . . . . . . . . . . . . . . . . . . . 13
Section 1.08. Extension of Lease Term. . . . . . . . . . . . . . . . 15
ARTICLE
II. REPRESENTATIONS
AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.01. Lessee's Representations and Warranties. . . . . . . . 15
Section 2.02. Trust Company Representations. . . . . . . . . . . . . 17
ARTICLE
III. TRUSTEE
AND TRUST COMPANY
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.01. Lien Claims. . . . . . . . . . . . . . . . . . . . . . 20
Section 3.02. Inspection of Property . . . . . . . . . . . . . . . . 20
Section 3.03. Notice of Significant Matters. . . . . . . . . . . . . 20
Section 3.04. Qualification; Business; Use of Advances.. . . . . . . 21
Section
3.05. Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 3.06. Transaction Documents. . . . . . . . . . . . . . . . . 21
Section 3.07. Transactions with Affiliates . . . . . . . . . . . . . 22
Section 3.08. Transfer or Encumbrance of the Property. . . . . . . . 22
Section 3.09. Compliance with Laws and Documents . . . . . . . . . . 23
Section 3.10. Assignment . . . . . . . . . . . . . . . . . . . . . . 23
Section 3.11. Other Tenant Leases. . . . . . . . . . . . . . . . . . 23
Section 3.12. Agent's Approval of Settlements. . . . . . . . . . . . 23
Section 3.13. Notice of Actions; Prosecution . . . . . . . . . . . . 24
Section 3.14. Covenants of Trust Company . . . . . . . . . . . . . . 24
ARTICLE
IV. THE
NOTES AND THE CERTIFICATES . . . . . . . . . . . . . . . . . . . . . 25
Section 4.01. Rates Applicable to Instruments. . . . . . . . . . . . 25
Section 4.02. Assignments and Participations . . . . . . . . . . . . 25
Section 4.03. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 4.04. Avoidance of Taxes, Other Charges and Increased
Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 4.05. Sharing of Payments, Etc . . . . . . . . . . . . . . . 31
Section 4.06. Instrument Holders' Credit Decisions . . . . . . . . . 31
ARTICLE
V. MISCELLANEOUS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.01. Survival . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.03. Severability . . . . . . . . . . . . . . . . . . . . . 34
Section 5.04. Amendments, Etc. . . . . . . . . . . . . . . . . . . . 34
Section 5.05. Headings . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.06. Definitions. . . . . . . . . . . . . . . . . . . . . . 34
Section 5.07. Benefit. . . . . . . . . . . . . . . . . . . . . . . . 34
Section 5.08. Place of Payment . . . . . . . . . . . . . . . . . . . 35
Section 5.09. Counterparts . . . . . . . . . . . . . . . . . . . . . 35
Section 5.10. Governing Law; Venue . . . . . . . . . . . . . . . . . 35
Section 5.11. Business Day . . . . . . . . . . . . . . . . . . . . . 35
Section 5.12. The Trustee. . . . . . . . . . . . . . . . . . . . . . 36
Section 5.13. Estoppel Certificates. . . . . . . . . . . . . . . . . 36
Section 5.14. Transaction Documents; Further Assurances. . . . . . . 36
Section 5.15. Confidentiality. . . . . . . . . . . . . . . . . . . . 37
Section 5.16. Interest . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.17. Money. . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.18. Number and Gender of Words . . . . . . . . . . . . . . 38
Section 5.19. Articles, Sections, Exhibits, and Schedules. . . . . . 38
Section 5.20. Decisions of Parties . . . . . . . . . . . . . . . . . 39
Section 5.21. Restructure of Transaction . . . . . . . . . . . . . . 39
Section 5.22. Construction of Agreement. . . . . . . . . . . . . . . 39
Section 5.23. Brokers. . . . . . . . . . . . . . . . . . . . . . . . 40
Section 5.24. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 40
ARTICLE
VI. THE
AGENT
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 6.01. Appointment. . . . . . . . . . . . . . . . . . . . . . 40
Section 6.02. Nature of Duties . . . . . . . . . . . . . . . . . . . 41
Section 6.03. Rights, Exculpation, etc.. . . . . . . . . . . . . . . 43
Section 6.04. Reliance . . . . . . . . . . . . . . . . . . . . . . . 43
Section 6.05. Indemnification. . . . . . . . . . . . . . . . . . . . 44
Section 6.06. Successor Agent; Resignation of Agent. . . . . . . . . 44
Section 6.07. Authorization to Act as Agent of Trustee . . . . . . . 45
This TRANSACTION AGREEMENT dated as of February 28,
1997 (the "Agreement"), is entered into by and among THE PEP BOYS -
MANNY, MOE & XXXX, a Pennsylvania corporation ("Lessee"); STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, not in its individual capacity except as expressly stated herein,
but solely as Trustee under the Declaration of Trust, as hereinafter defined
(State Street Bank and Trust Company, when acting in its respective
capacities as such Trustee, together with any successor trustee under the
Declaration of Trust, is herein referred to as the "Trustee" and State
Street Bank and Trust Company, when acting in its individual capacity,
is herein referred to as "Trust Company"); BANK OF MONTREAL
("Bank of Montreal") as an initial "Purchaser" and "Instrument Holder;
CITICORP LEASING, INC., a Delaware corporation ("CLI"), on behalf
of itself as an initial "Purchaser" and "Instrument Holder" hereunder and
on behalf of the other financial institutions that may, from time to time,
become "Purchasers" or "Instrument Holders" hereunder; and CITICORP
LEASING, INC., a Delaware corporation ("Agent"), in its capacity as the
initial administrative agent for the Instrument Holders hereunder.
Capitalized terms used but not otherwise defined in this Agreement shall
have the meanings set forth in Schedule 1 hereto.
Preliminary Statement
A. From time to time Trustee will acquire certain parcels of
real property (each such parcel, together with all agreements, easements,
licenses, rights of way or use, appurtenances, tenements, hereditaments
and other rights and benefits now or hereafter belonging to or pertaining
to such parcel or the improvements thereon, being referred to as a
"Parcel").
B. Each Parcel and any improvements located or constructed
thereon (the "Improvements") will be leased to Lessee (and, where
applicable, certain Additional Lessees that are wholly-owned subsidiaries
of Lessee) by Trustee under that certain Master Lease (the "Lease") of
even date herewith between Trustee, as lessor, and Lessee, as lessee. All
Parcels that, as of any relevant time, have been included in the coverage
of the Lease by supplements as provided for therein, and all
Improvements located on such Parcels from time to time, are sometimes
herein collectively called the "Property." It is acknowledged that while
various subsidiaries of Lessee may, under the terms of the Lease, become
"Additional Lessees" from time to time, references in this Agreement to
"Lessee" are intended to refer only to THE PEP BOYS - MANNY, MOE
& XXXX, a Pennsylvania corporation.
C. To finance its acquisition of the Property, the Trustee shall
issue to CLI and Bank of Montreal, as the initial Purchasers of the
Instruments, (i) Series A Trust Notes (collectively, the "Original A-
Notes") in the aggregate stated principal amount of up to $37,800,000.00
(such amount being referred to as the "A-Note Commitment"), (ii)
Series B Trust Notes (collectively, the "Original B-Notes") in the
aggregate stated principal amount of up to $5,400,000.00 (such amount
being referred to as the "B-Note Commitment"), and (iii) Series C
Certificates (collectively, the "Original Certificates") in the aggregate
stated amount of up to $1,800,000.00 (such amount being referred to as
the "Certificate Commitment"). The Original A-Notes, and any other
Series A promissory notes issued from time to time pursuant to the terms
hereof and of the Declaration of Trust, are collectively referred to as the
"A-Notes"; the Original B-Notes, and any other Series B promissory notes
issued from time to time pursuant to the terms hereof and of the
Declaration of Trust are collectively referred to as the "B-Notes." The
Original Certificates and any other Series C certificates issued from time
to time pursuant to the terms hereof and of the Declaration of Trust are
collectively referred to as the "Certificates." The A-Notes and the
B-Notes are herein collectively referred to as the "Notes." The Notes and
the Certificates are herein referred to collectively as the "Instruments."
D. The Instruments shall be issued, be dated, mature and be
payable as provided in this Agreement and in the Declaration of Trust and
shall be entitled to the benefit of the Trust Estate held by Trustee pursuant
to the Declaration of Trust. A copy of the Declaration of Trust has been
provided to Lessee, Agent and Purchasers.
NOW, THEREFORE, in consideration of the agreements herein
and in the other Transaction Documents and in reliance upon the
representations and warranties set forth herein and therein, the parties
agree as follows:
ARTICLE I.
FUNDING
Section 1.01. Advances under Instruments.
(a) CLI, as an initial Purchaser of the Instruments,
confirms that its Certificate Commitment is $1,800,000.00, its A-Note
Commitment is $18,112,500.00, and its B-Note Commitment is
$2,587,500.00, for a total Commitment of $22,500,000.00.
Notwithstanding the foregoing, it is expressly agreed that in no event will
CLI ever be obligated to make an Advance in respect of its Commitment
if, at the time of the Advance and after giving effect to the Advance in
question, the "Hold Position" of CLI (i) for Advances made during the
period ending March 31, 1997, would exceed $38,500,000.00, (ii) for
Advances made during the period April 1, 1997, through June 30, 1997,
would exceed $30,000,000.00, (iii) for Advances made during the period
July 1, 1997, through September 30, 1997, would exceed $25,000,000.00,
and (iv) for Advances made on or after October 1, 1997, would exceed
$15,000,000.00. For purposes hereof the term "Hold Position" means the
sum of (i) the aggregate outstanding principal balance and/or stated
amounts of Instruments then held by CLI hereunder, plus (ii) the
aggregate outstanding principal and/or stated amount of notes or equity
certificates then held by CLI in respect of the Pep Boys I Facility, plus
(iii) the remaining amount of available advances that Lessee may request
under the Pep Boys I Facility; provided, however, that there shall be
excluded from such calculation any portion of the principal balance and/or
stated amount, as applicable, of any such instruments (whether hereunder
or in respect of the Pep Boys I Facility) that are held by CLI for the
benefit of an unaffiliated participant or assignee that has closed on or
purchased such participation. It is acknowledged that CLI's "Hold
Position" with respect to the Pep Boys I Facility as of the date hereof is
$15,920,000.00, such that the maximum amount of Advances currently
available under the CLI Commitment is $22,500,000.00.
(b) Bank of Montreal, as an initial Purchaser of the
Instruments, confirms that its Certificate Commitment is zero ($0.00), its
A-Note Commitment is $19,687,500.00, and its B-Note Commitment is
$2,812,500.00, for a total commitment of $22,500,000.00..
(c) Advances under the Instruments representing the
Commitment shall be made by the Purchasers at the request of the Lessee,
in one or more installments (each an "Advance" and collectively
"Advances") subject to satisfaction or waiver of all conditions and
requirements with respect thereto set forth herein. The Purchasers shall
fund each Advance by advancing funds under A-Notes in the aggregate
amount of 84% of such Advance, B-Notes in the amount of 12% of such
Advance, and Certificates in the amount of 4% of such Advance. Each
Purchaser shall fund its pro rata share of each Advance by depositing with
the Agent funds in an amount equal to such Purchaser's Percentage of the
portion of such Advances to be made by Purchasers in respect of A-Notes,
B-Notes or Certificates, as the case may be. All such Advances shall be
funded by the Purchasers by transfers of immediately available funds
received prior to 11:00 a.m. (New York, New York time) in an account
of the Trustee to be established and maintained at Citibank, N.A.,
New York, New York (Account No. 00000000 - ABA No. 000000000),
or to such other Person or account as Trustee may direct.
(d) The proceeds of each Advance(s) shall be used by
Trustee to purchase Parcels and Improvements, if any, thereon, to make
Construction Advances (as hereinafter defined) to Lessee under the Lease
in respect of New Improvements, to make Interim Advances (as
hereinafter defined) to Lessee under the Lease in respect of New
Improvements then under construction in certain circumstances as more
fully described in Section 1.04(c) below, and for other Approved
Purposes. Upon the execution by Trustee and Lessee, and the approval
thereof by Agent, on behalf of Purchasers, of a supplement to the Lease
adding a Parcel to the Lease, and the execution and delivery of such other
documents in connection therewith as Agent, on behalf of Purchasers, may
reasonably deem appropriate consistent with Section 1.04 below, such
Parcel and Improvements shall thereafter be a part of the "Property"
covered by this Agreement and the Transaction Documents. In the case
of Advances made to permit Trustee to reimburse Lessee for the costs of
New Improvements located on Parcels already included in the Property
(each, a "Construction Advance" and collectively, "Construction
Advances"), Lessee and Trustee shall execute, and Agent, on behalf of the
Purchasers, shall approve, a Construction Supplement to the Lease in
substantially the form attached to the Lease (each, a "Construction
Supplement" and collectively, "Construction Supplements").
(e) From time to time other banks or financial
institutions satisfactory to Lessee, Trustee, Agent, and CLI may become
additional "Purchasers" for purposes of this Agreement. Approval of any
proposed Purchaser by any party hereto shall not be unreasonably
withheld. In such event such new Purchaser shall execute such
supplements or amendments to this Agreement and/or the other
Transaction Documents as the other parties hereto may deem appropriate
to evidence, among other matters (i) the amount of the Commitment of
such new Purchaser with respect to Instruments, (ii) whether the
Commitment of the new Purchaser represents an increase of the overall
Commitment of the Purchasers hereunder or a reduction of the
Commitment of CLI hereunder, and (iii) the assumption by such new
Purchaser of the obligations of a "Purchaser" hereunder. At the time any
Person becomes a Purchaser Instruments reflecting the Commitment of
such Purchaser will be issued to such Purchaser and, if the unadvanced
Commitment of any existing Purchaser is reduced as a result thereof, the
Instruments then held by the existing Purchasers shall be replaced by a
replacement Instrument of the same series issued by Trustee in the
reduced amount. It is expressly agreed that no Person may become a
Purchaser hereunder without the prior written consent of Lessee and
Agent. It is further acknowledged and agreed that any Person that
becomes an Instrument Holder as a result of an assignment thereto of
Instruments previously issued to a Purchaser hereunder shall not thereby
become a "Purchaser". An Instrument Holder that is not also a Purchaser
shall have no obligation to fund Advances under the Instruments and no
right to approve Advances, which shall be approved by Agent acting
solely on behalf of Purchasers, subject to the terms and conditions hereof.
(f) Agent shall keep current a Master Schedule
reflecting the amount of the Commitment of each Purchaser, the amount
of Advances made in respect of the outstanding Instruments, any payments
made under or with respect to the Instruments that reduce the outstanding
balance thereof, and the amount of the unfunded Commitment of each
Purchaser. Upon request, the Agent will provide a copy of the then
current Master Schedule to any Purchaser, Instrument Holder, the
Trustee, or the Lessee. Such Master Schedule maintained by Agent shall
be conclusive and binding on the Purchasers, Instrument Holders, and the
Trustee in the absence of manifest error. The information reflected on the
Master Schedule shall have no effect upon the amounts payable by the
Lessee under the Lease, all of which payment obligations shall be
governed by the Lease itself.
Section 1.02. Closing Date. The closing of first Advance shall
take place on such date (the "Closing Date") as the Lessee may request,
subject to Lessee's timely satisfaction of all conditions set forth in Section
1.03, as well as the applicable portions of Section 1.04.
Section 1.03. Conditions for Initial Advance. In addition to
satisfaction of the requirements of Section 1.04 below (which are
applicable to all Advances), the initial Advance shall not be made
hereunder until all of the following requirements have been satisfied.
(a) This Agreement, the Declaration of Trust, the
Lease, the Lease Guarantee, and the Environmental Indemnity have each
been fully executed and delivered by each of the parties thereto.
(b) Trustee, Purchasers, and Lessee have each received
such evidence of authority to act, legal opinions, and related matters as
they may deem reasonably necessary to confirm that all parties to the
Transaction Documents are bound thereby and such Transaction
Documents are binding and enforceable upon all parties thereto.
(c) All fees, costs, and expenses to be paid or
reimbursed by Lessee to the Trustee or Purchasers and/or their respective
counsel and/or consultants through the Closing Date as otherwise provided
herein, or in the other Transaction Documents, have been paid in full.
Section 1.04. Conditions Precedent to All Advances. In addition
to the requirements of Section 1.03 above, Purchasers will have no
obligation to make Advances hereunder (including, without limitation, the
initial Advance) unless, at the time such Advance is requested, each of the
following conditions precedent has been satisfied. At such time as the
applicable conditions have been satisfied, Purchasers shall make the
requested Advance:
(a) If the Advance in question is in connection with the
addition of an unimproved Parcel (or a Parcel as to which any existing
Improvements are intended to be demolished in connection with the
construction of New Improvements) to the Property:
(i) Trustee has executed and delivered, and
arrangements reasonably satisfactory to the Agent have been made
for the recordation of, a Transaction Mortgage covering the Parcel
in question.
(ii) Title Company shall have issued (or provided
Agent with evidence satisfactory to Agent that the Title Company
is irrevocably obligated to issue immediately after closing) the
Owner's Title Policy to Trustee and the Mortgagee Title Policy to
the Agent with respect to the Parcel(s) being added to the
Property.
(iii) Agent has received original, fully-executed,
counterparts of a Supplement to the Lease adding the Parcel in
question to the "Property" covered by the Lease.
(iv) A memorandum of the Lease has been
executed and delivered by Trustee and Lessee and, except in those
circumstances where no memorandum of lease is to be recorded as
provided for in the Lease, such memorandum of the Lease has
been recorded (or arrangements reasonably satisfactory to the
Agent have been made for the recordation) in all applicable
jurisdictions to provide public record notice of the existence of the
Lease.
(v) Agent and Trustee have received such legal
opinions as they may reasonably require regarding the
documentation executed to add the Parcel in question to the
Property, including, without limitation, favorable opinions of local
counsel satisfactory to Agent regarding the enforceability of the
Transaction Documents under local law to the extent the law of the
location of the Parcel is applicable thereto. Agent and Trustee
confirm that as a matter of regular practice they intend to require
opinions of local counsel only in respect of the first Parcel located
in a given state that is added to the Property; provided that Trustee
and Agent reserve the right to require opinions of local counsel
upon the addition of subsequent Parcels in such state where they
determine (in their sole but reasonable discretion) that a legitimate
need for a local counsel opinion exists.
(vi) Agent shall have received, reviewed, and
approved an appraisal of the Parcel and of the contemplated New
Improvements to be developed thereon in form and substance, and
issued by an appraiser, satisfactory to Agent. Such appraisal must
indicate a current value of the Parcel (in its unimproved state) of
at least 50% of the amount of the Advance for the Parcel itself,
and a value for the Parcel and contemplated New Improvements
(on an "as if vacant" but completed basis) of at least 50% of the
aggregate amount that Lessee estimates ultimately will be
Advanced in respect of such Parcel and New Improvements. If the
appraisal of the vacant Parcel received by Agent does not
adequately support the amount of the requested Advance for the
Parcel itself and Lessee elects to proceed with such Parcel and
cover any additional costs from Lessee's own funds, the amount
of the acquisition Advance will be reduced such that the
Acquisition Price of the Parcel in question, after giving effect to
such Advance, will be not more than twice the appraised value of
the vacant Parcel.
(vii) Agent shall have received, reviewed, and
approved (A) a survey of the Parcel in form and substance
reasonably satisfactory to the Agent and in any event sufficient for
title insurance purposes, (B) an environmental site assessment of
the Parcel in question reasonably acceptable to Agent, and (C)
such other reports, studies, or information regarding the Parcel in
question as Agent may reasonably require.
(b) If the Advance in question is in connection with a
Construction Advance to be made by Trustee under the Lease in respect
of New Improvements that have been constructed by Lessee on a Parcel:
(i) Agent has received and approved original
executed counterparts of a Construction Supplement to the Lease
in respect of the New Improvements in respect of which
Construction Advance is to be made.
(ii) Agent has received and approved, where
applicable, the materials required to be supplied by Lessee
pursuant to the Construction Addendum to the Lease evidencing
the completion of the New Improvements in question, the payment
of the costs therefor, and the performance of Lessee's other
obligations thereunder to support Lessee's entitlement to the
Construction Advance in question.
(iii) Agent shall have received, reviewed, and
approved an "as-built" survey of the Parcel in question dated
subsequent to completion of the New Improvements thereon in
form and substance reasonably satisfactory to Agent which shall
show the location of all New Improvements thereon and that the
New Improvements are completely within the boundaries of the
Parcel, shall not indicate the violation of any Laws, the
encroachment across or on any easement (except as otherwise
approved by Agent), or the violation of any restrictive covenant or
other restrictions, and shall not reflect any other conditions not
reasonably acceptable to Agent.
(iv) The Title Company shall have issued (or
provided Agent with evidence satisfactory to Agent that the Title
Company is irrevocably obligated to issue immediately after
funding of the Advance in question) an endorsement to the Owner
Title Policy and the Mortgagee Title Policy covering the Parcel in
question increasing the coverage to the aggregate amount advanced
in respect of the Parcel and Improvements thereon, without
exceptions unacceptable to Agent in its reasonable discretion. Any
Permitted Encumbrances approved by Agent in connection with the
addition of the applicable Parcel to the Property may not be
disapproved by Agent in connection with a subsequent Advance in
respect of such Parcel so long as the construction of the New
Improvements has not created any encroachments or other
problems related thereto that did not exist when the Permitted
Encumbrance in question was originally approved.
(v) Agent shall have received, reviewed, and
approved an "as-built" appraisal of the Parcel and the completed
Improvements thereon in form and substance, and issued by an
appraiser, satisfactory to Agent indicating an "as if vacant" value
of the Parcel and completed New Improvements thereon of not less
than 50% of the Acquisition Price (as defined in the Lease) of the
Parcel in question after giving effect to the requested Advance. In
the event the appraisal received by Agent does not adequately
support the amount of the requested Advance the amount of the
Advance shall be reduced such that the Acquisition Price of the
Parcel in question after giving effect to such Advance will be not
more than twice the appraised value of the Parcel.
(vi) The Lessee that leases the Parcel in question
under the Lease has received a certificate of occupancy (or local
equivalent), if any, required for lawful occupancy, and has opened
for business in, the New Improvements.
(c) In addition to Lessee's right to obtain Construction
Advances upon completion of New Improvements on a Parcel as provided
for in subsection 1.04(b) above, Lessee may obtain "Interim Advances"
(herein so-called) to reimburse Lessee for costs theretofore incurred in
connection with the construction of New Improvements that are not yet
completed and are therefore not yet eligible for Construction Advances
pursuant to subsection 1.04(b). Interim Advances shall be treated as
"Construction Advances" and "Advances" for all purposes of the
Transaction Agreement and the other Transaction Documents, except as
otherwise specifically provided in this subsection 1.04(c). Interim
Advances are subject to the following:
(i) Interim Advances may be obtained by Lessee
not more than six (6) times per annum. For administrative
convenience of the parties Lessee will use its best efforts to
coordinate the timing of Interim Advance requests with requests
for other Advances for which Lessee may be eligible.
(ii) The amount of each Interim Advance shall
be not less than $250,000.00. Costs associated with the New
Improvements on more than one Parcel may be aggregated to
reach the required minimum amount for the Interim Advance, but
costs for each Parcel shall be accounted for separately. The
aggregate amount of Interim Advance(s) on a Parcel shall not
exceed 85% of the anticipated construction costs for New
Improvements on that Parcel, with all remaining costs being
funded only through a Construction Advance pursuant to Section
1.04(b) upon Lessee's satisfaction of all requirements applicable
thereto.
(iii) Purchasers shall have no obligation to make
any Interim Advance hereunder if, at the time such Interim
Advance would otherwise be made, the Debt Rating of Lessee is
lower than BBB (as rated by Standard & Poor's Corporation) or
lower than Baa2 (as rated by Xxxxx'x Investors Service).
However, if Lessee thereafter reattains the required Debt Rating
and is otherwise then eligible for an Interim Advance, Lessee may
reinstate its requests for Interim Advances that were not available
to it because of failure to satisfy the Debt Rating requirements.
Such Debt Rating requirements are applicable to Interim Advances
only, and do not affect the provisions of Section 1.04(g) below
applicable to Advances generally.
(iv) Costs related to the New Improvements on
any particular Parcel may be included in only two (2) Interim
Advances. However, the foregoing shall not preclude Lessee from
obtaining an Advance for the acquisition of such Parcel pursuant
to subsection 1.04(a) and/or a final Construction Advance in
respect of the New Improvements on such Parcel pursuant to
subsection 1.04(b) upon satisfaction of the requirements of such
provisions.
(v) The amount of any Construction Advance
available to Lessee pursuant to subsection 1.04(b) in respect of a
given Parcel shall be reduced to the extent that costs that would
otherwise have been included in such Construction Advance have
previously been funded through an Interim Advance.
(vi) The amount of the Interim Advance
attributable to any particular Parcel and the New Improvements
thereon shall not exceed the costs of acquiring the Parcel and/or
the cost of construction of the New Improvements theretofore
constructed and in place on the Parcel (reduced by the amount of
any previous Advance in connection with acquisition of the Parcel
in question), as reasonably substantiated to Agent. Applicable
transaction costs and "soft" costs related to the addition of the
Parcels and/or the development of the New Improvements shall
also be eligible for inclusion in an Interim Advance.
(vii) Each request for any Interim Advance must
be accompanied by a written certification by a senior financial
officer of Lessee (i) that the costs for which the Interim Advance
in question has been requested have been incurred by Lessee and
the work for which such Interim Advance is requested has been
completed and is in place, all in substantial accordance with the
Plans for the work in question previously approved by Agent, (ii)
that Lessee expects to complete construction of the New
Improvements to which the Interim Advance relates on or before
the applicable Required Completion Date, (iii) certifying the
amount of costs that are not covered in the Interim Advance that
Lessee reasonably expects to spend to complete the New
Improvements in question ("Remaining Costs"), (iv) that upon
completion of the New Improvements the Lessee expects that the
"as-built" appraisal for such New Improvements will satisfy the
requirements of this Transaction Agreement for purposes of
obtaining a final Construction Advance covering all costs of
construction and development thereof in accordance with
subsection 1.04(b)(v) of this Transaction Agreement,
(v)
identifying any new Liens affecting the Parcel of which such
officer has received actual written notice and certifying that with
respect to any such Liens and any further Liens that may be filed,
Section
7(a) of the Lease will be applicable
thereto,
and (vi) that
Lessee then satisfies all other applicable requirements for obtaining
the requested Interim Advance and will continue to do so after
giving effect to the Interim Advance in question.
(viii) As further conditions to any Interim
Advance:
(A) Agent shall have received and
approved original executed counterparts of an Interim
Construction Supplement to the Lease in respect of the
Interim Advance in question in substantially the form
attached to the Lease. Each Interim Construction
Supplement shall be treated in the same manner as, and
shall be included as, a "Construction Supplement" for all
purposes of this Transaction Agreement and the other
Transaction Documents.
(B) Agent shall have received and
approved, where applicable, the materials required to be
supplied by Lessee pursuant to the Construction Addendum
to the Lease evidencing construction (to the extent that the
costs thereof are included in the Interim Advance request)
of the New Improvements in question, the payment of the
costs therefor, and the performance of Lessee's other
obligations thereunder to support Lessee's entitlement to
the Interim Advance in question. In this regard the parties
acknowledge that the conditions set out in the Construction
Addendum shall be applicable only to the extent that such
conditions would be reasonably expected to have been
completed or satisfied in the course of construction in a
commercially prudent manner to the stage at which the
construction on the New Improvements in question is then
advanced, as reasonably determined by Agent.
(C) Agent shall have received, reviewed,
and approved (either at the time the Parcel was added to
the Property or in connection with the Interim Advance in
question) an "as-if-completed" appraisal of the Parcel(s)
and the completed Improvements to be constructed thereon
in form and substance, and issued by an appraiser,
satisfactory to Agent indicating, on an "as if vacant" basis,
that the Parcel and Improvements to be constructed thereon
will have a value, when completed, of not less than 50% of
the sum of the Acquisition Price (as defined in the Lease)
of the Parcel in question after giving effect to the requested
Interim Advance and the amount of Remaining Costs for
such Parcel. In the event the appraisal received by Agent
does not adequately support the amount of the requested
Advance the amount of the Advance shall be reduced such
that the sum of the Acquisition Price of the Parcel in
question after giving effect to such Advance and the
amount of Remaining Costs for such Parcel will be not
more than twice the appraised value of the Parcel.
(D) Agent shall have the right, in its
discretion, to waive the requirement for delivery by Lessee
of any items or materials required to be supplied by Lessee
hereunder with respect to a Parcel; provided, however, that
any such waiver with respect to a Parcel shall not be
deemed to constitute a waiver with respect to any future
Parcel(s).
(d) Regardless of whether the Advance is in connection
with the addition of a Parcel or in connection with a Construction
Advance under the Lease:
(i) No Casualty or Condemnation (as those
terms are defined in the Lease) shall have occurred with respect to
any portion of the Parcel to which such Advance is being made.
(ii) No Event of Default has occurred and is
continuing, and no Special Incipient Default exists under the
Lease.
(iii) All reasonable costs and expenses incurred
by Agent or Trustee in connection with the Advance in question,
and all reasonable fees or other payments due in respect of such
Advance, have been paid (or arrangements satisfactory to Agent
and Trustee regarding the payment thereof have been made). It is
agreed that so long as no Event of Default exists no overhead or
other internal costs of the Agent shall be payable by Lessee;
provided that the foregoing limitation shall not be deemed to limit
or restrict amounts that are otherwise recoverable by Agent
pursuant to any Transaction Document if an Event of Default
exists.
(iv) No material adverse change has occurred in
the financial condition or business of Lessee and its consolidated
subsidiaries, taken as a whole, as shown on or reflected in a
consolidated balance sheet of Lessee, or its consolidated statement
of income or cash flow, other than changes in the ordinary course
of business that will not have any materially adverse effect, either
individually or in the aggregate, on the business or financial
condition of Lessee and its consolidated subsidiaries.
(v) The amount of the Advance shall not exceed
the costs of acquiring the Parcel and/or the cost of the New
Improvements, as reasonably substantiated to Agent. Applicable
transaction costs and "soft" costs related to the addition of the
Parcels and/or the development of the New Improvements shall be
eligible for Advance, subject to the overall limitation that the value
of the Parcel or Improvements in question must support the
amount of the Advance (based on the appraisal requirements set
out in subsection [b][v] above).
(e) The conditions set out in both subsections (a) and (b)
shall apply, subject to reasonable modifications under the circumstances,
in the event Lessee requests an Advance in respect of an improved Parcel
where the Improvements existing thereon are to be occupied under the
Lease rather than being entirely demolished, with or without renovation
and/or construction of New Improvements, and whether or not a
subsequent "Construction Advance" is anticipated.
(f) To the extent applicable the underwriting guidelines
listed on Schedule 2 attached hereto shall be adhered to by the Agent in
evaluating any requested Advance. Any matters not specifically addressed
in such guidelines shall be subject to the approval of Agent in the exercise
of its reasonable discretion.
(g) Anything to the contrary herein notwithstanding:
(i) Purchasers shall have no obligation to make
any Advance hereunder for the addition of a Parcel to the Property
if, at the time such Advance would otherwise be made, the Debt
Rating of Lessee is lower than BBB- (as rated by Standard &
Poor's Corporation or Baa3 (as rated by Xxxxx'x Investors
Service), or the Debt Rating of Lessee is BBB-/Baa3 and Lessee
is then on "credit-watch" status with either rating agency; and
(ii) Purchasers shall have no obligation to make
any Advance hereunder as a Construction Advance in respect of a
Parcel previously added to the Property if, at the time such
Advance would otherwise be made, the Debt Rating of Lessee is
BB+ or lower (as rated by Standard & Poor's Corporation or Ba1
or lower (as rated by Xxxxx'x Investors Service).
Section 1.05. Advance Process. The following procedures and
limitations shall be applicable to each Advance unless otherwise waived
by Agent:
(a) Lessee shall notify Agent in writing not less than
fifteen (15) days prior to the date on which the Advance in question is
desired (or, in the case of the first Advance hereunder in respect of a
Parcel located within a given state, not less than thirty (30) days prior to
the date on which the Advance in question is desired). The requested
Advance shall be funded by the Purchaser(s) on or before the requested
date if Lessee has satisfied all of the conditions precedent to the requested
Advance (other than the execution and delivery of the necessary
Supplements and related closing documents) at least five (5) Business
Days prior to the requested Advance date. Neither Agent nor Trustee
shall have any liability or obligation to Lessee if an Advance cannot be
completed at the time requested by Lessee if all required materials are not
supplied by Lessee in a timely manner.
(b) All materials that are to be reviewed and/or
approved as a condition to the requested Advance shall be submitted to
Agent (and, in the case of the environmental site assessment for a Parcel
to be added to the Property, to the Trustee) for review and approval
simultaneously with Lessee's request for Advance. Except for the
environmental site assessment, Lessee shall not be required to deliver
materials directly to Trustee unless Lessee is specifically requested to do
so by Agent, it being the responsibility of Agent and its counsel to
coordinate the funding of each Advance (Agent will provide Trustee with
copies of all such materials approved by the Agent as needed). The
parties acknowledge that it may be necessary, in certain cases, for Agent
to obtain approval of one or more such items by one or more of the
Purchasers to fulfill Agent's obligation to such Purchasers, but Agent shall
be responsible for obtaining a timely response from any such Purchaser,
and any Purchaser that does not respond to Agent in a timely manner shall
be deemed to have consented to or approved the matter in question.
Trustee and Lessee may rely upon any consent or approval of any matter
given by Agent without inquiry as to whether any required approvals of
any Purchasers have in fact been obtained by Agent.
(c) In connection with each Advance, Agent shall
prepare the necessary supplements to the Lease, and other documents, if
any, reasonably required in connection with such Advance and submit
counterparts of the necessary documents to all applicable parties for
execution and delivery. Agent shall submit to the Trustee all such
supplements or other documents requiring the Trustee's signature with
instructions authorizing the Trustee's execution and delivery of the same.
Upon completion of the documents executed in connection with any
Advance, Agent shall deliver to Trustee a copy of the document transcript
for such Advance.
(d) Lessee and Agent, and Trustee (where necessary)
shall make such mutually satisfactory arrangements for the closing and
funding of the Advance, including, without limitation, escrow
arrangements with a Title Company or closing attorney where applicable,
as may be necessary or appropriate under the circumstances.
(e) In no event shall any Advance be available after
August 31, 1998 ("Outside Funding Date"). On the Outside Funding
Date, any unused Commitment of the Purchasers shall be canceled and of
no further effect.
Section 1.06. Form of Documents. All instruments, documents,
or materials executed by or for the benefit of, or submitted to, Agent or
Purchasers in connection with this Agreement, including, without
limitation, documents submitted in connection with Advances, shall be in
form and substance reasonably acceptable to Agent and its counsel.
Section 1.07. Transaction Fees. Lessee shall pay from time to
time the following fees related to the transactions contemplated herein:
(a) Arranging/Structuring Fee. Lessee shall pay to CLI
or an Affiliate of CLI a structuring fee in the amount of $247,500 cash
upon execution of this Agreement.
(b) Servicing Fee.
Subject to the terms of a certain side
letter agreement of even date herewith between Agent and Lessee
regarding a limitation on such fee, on
each
December 15 (starting
December 15, 1997)
throughout the term of this Agreement, as well as on
the Maturity Date, Lessee shall pay to CLI or an Affiliate of CLI a
servicing fee in an amount equal to 0.125% of the
weighted average
outstanding
principal balance of the Notes and the weighted-average
outstanding amount of the Certificates for the preceding year. The first
payment shall be prorated on a daily basis for the period from the date
hereof through
December 15, 1997,
and the last payment due on the
Maturity Date shall also be a prorated payment covering the period
December 16, 2002,
through the Maturity Date.
(c) Commitment Fee. On each March 30, June 30,
September 30, and December 30 through and including September 30,
1998, Lessee shall pay to the Purchasers a commitment fee (computed
quarterly in arrears) in an amount equal to one-fourth of the amount
determined by multiplying the unused portion of the Commitment
(computed on a weighted average daily basis during the quarter) by the
applicable percentage provided for in the following chart:
Lessee's Debt Rating Commitment Fee Rate
BBB+ (or higher) 15.0 basis points
BBB 20.0 basis points
BBB- 26.5 basis points
lower than BBB- 32.5 basis points
The first payment due on March 30, 1997, shall be prorated on a daily
basis for the period from the date hereof through March 30, 1997, and the
last payment due September 30, 1998, shall also be a prorated payment
reflecting only the period July 1, 1998, through the Outside Funding Date.
In the event the Outside Funding Date is extended, the obligation to
continue to pay a commitment fee on the unused portion of the
Commitment shall be likewise extended. In the event that Lessee desires
to terminate its right to obtain Advances hereunder prior to the Outside
Funding Date, Agent and Trustee agree to enter into an amendment to this
Agreement and the other Transaction Documents as necessary to terminate
the obligation of the Purchasers to advance the unused portion of the
Commitment, and after such termination no further commitment fees shall
be due.
(d) Trustee Fees. From time to time the Lessee shall
pay to the Trustee the various fees and other payments provided for in the
Declaration of Trust and/or in the Fee Letter.
Section 1.08. Extension of Lease Term.
(a) Anything to the contrary in the Lease or any other
Transaction Document to the contrary notwithstanding, it is expressly
agreed that the Term of the Lease may not be extended without the
unanimous approval of the Instrument Holders, which approval may be
withheld or conditioned in such Instrument Holders' sole discretion.
Neither Agent nor Trustee shall have the authority to grant approval of
any extension of the Term of the Lease requested by Lessee unless all
Instrument Holders have approved the extension in question. Agent shall
be responsible for polling the Instrument Holders in the event Lessee
requests an extension of the Term of the Lease, and Lessee and Trustee
shall be entitled to rely on any statement or certificate issued by Agent
confirming that all Instrument Holders have approved the requested
extension. In connection with any such extension of the Term of the
Lease, Lessee, Trustee, Agent, and the Instrument Holders shall enter into
such supplements and amendments to all Transaction Documents
(including, without limitation, amendments or reissuance of the
Instruments themselves), as any party may reasonably require to reflect
the agreements of the parties with respect to such extension.
(b) In the event that Lessee and Agent desire to extend
the term of the Lease and one or more Instrument Holders are unwilling
to approve such extension, Lessee and Agent shall endeavor, as more fully
described in the Lease, but at Lessee's sole cost, to arrange for
replacement of the Instrument Holders that do not desire to extend the
Lease.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
Section 2.01. Lessee's Representations and Warranties. The
Lessee hereby represents and warrants to the Trustee, Agent, Purchasers,
and the Instrument Holders that the following statements are true and
correct as of the date hereof:
(a) Organization and Authority. Lessee (i) is duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Pennsylvania, (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 Agreement and
all other Transaction Documents to which Lessee is a party, and (iii) is
duly qualified to do business as a foreign corporation in good standing in
each jurisdiction in which its ownership or leasing of properties or the
conduct of its business requires such qualification.
(b) Enforceability. This Agreement and all other
Transaction Documents to which Lessee is a party have been duly
authorized, executed and delivered by Lessee and each is a legal, valid
and binding obligation of Lessee, enforceable according to its terms
(subject as to enforcement of remedies to any applicable bankruptcy,
reorganization, moratorium, or other Laws or principles of equity
affecting the enforcement of creditors' rights generally).
(c) No Conflict. The execution, delivery and
performance by Lessee of this Agreement and all other Transaction
Documents to which Lessee is a party will not result in any violation of
any term of the certificate or articles of incorporation or the by-laws of
Lessee, does not require stockholder approval or the approval or consent
of any trustee or holders of debt of Lessee 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 upon, any property or
assets of Lessee under, any indenture, mortgage or other agreement or
instrument to which Lessee is a party or by which it or any of its property
is bound, or to Lessee's knowledge, any existing applicable law, rule,
regulation, license, judgment, order or decree of any government,
governmental body or court having jurisdiction over Lessee or any of its
activities or properties, including, without limitation, any rule or order of
any public utility commission or other governmental body.
(d) Consents and Approvals. There are no consents,
licenses, orders, authorizations or approvals of, or notices to or
registrations with any governmental or public body or authority which are
required in connection with the valid execution, delivery and performance
of this Agreement and all other Transaction Documents to which Lessee
is a party by Lessee that have not been obtained or made, and any such
consents, licenses, orders, authorizations, approvals, notices and
registrations that have been obtained or made are in full force and effect.
(e) Pending Matters. Except as disclosed in writing to
Agent by Lessee concurrently herewith, 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 Lessee, threatened against or affecting Lessee
or any property or rights of Lessee as to which there is a significant
possibility of an adverse determination, and which if adversely
determined, may have a material adverse effect on the financial condition
or business of Lessee or which, if adversely determined could materially
impair the ability of Lessee to perform its obligations under the Lease or
any Transaction Document to which Lessee is a party, 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 Lessee after due inquiry, threatened
against Lessee which questions or would question the validity of the Lease
or any Transaction Agreement.
(f) No Default. Lessee is not in default under or with
respect to any agreement or other instrument to which it is party or by
which it or its assets may be bound which would have a material adverse
effect on the financial condition of Lessee or the ability of Lessee to
perform its obligations under the Lease or any other Transaction
Document to which Lessee is a party. Lessee is not subject to or in
default under any order, award or decree of any court, arbitrator, or other
governmental authority binding upon or affecting it or by which any of its
assets may be bound or affected which would have a material adverse
effect on the ability of Lessee to carry on its business as presently
conducted or to perform its obligations under this Agreement and all other
Transaction Documents to which Lessee is a party.
Section 2.02. Trust Company Representations. Trust Company,
in its individual capacity and not as Trustee (with the exception of clauses
[d][ii] and [f][ii], which representations are made solely in its trust
capacity), represents and warrants to the Lessee, to Agent, and the
Instrument Holders that the following statements are and shall be true and
correct as of the Closing Date:
(a) Organization and Authority. Trust Company is a
trust company duly organized, validly existing and in good
standing under the laws of the Commonwealth of Massachusetts,
and Trust Company has all requisite corporate power and authority
to execute and deliver the Instruments, the Declaration of Trust,
and each Transaction Document to which it is a party (regardless
of the capacity in which it is a party thereto) and to comply with
the terms thereof and perform its obligations thereunder. The trust
created by the Trust Declaration is a trust formed by Trust
Company for the sole purpose of acquiring, financing, and leasing
the Property.
(b) No Actions Pending. 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 knowledge of the Trust Company,
threatened, against or affecting the Trust Company, (i) which
questions the validity or enforceability of this Agreement or any of
the other Transaction Documents to which the Trust Company is
a party (regardless of its capacity therein), or (ii) the probable
outcome of which would impair the ability of the Trust Company
to perform its obligations under any Transaction Document to
which it is or is to be a party.
(c) No Violation. The Trust Company's or the
Trustee's respective execution, delivery and performance of its
obligations under each Transaction Document to which it is or is
to be a party (including, without limitation, the execution,
delivery, and performance by Trustee of the Lease in its capacity
as Lessor thereunder) will not violate such party's charter or by-
laws, will not contravene any federal or state law, governmental
rule or regulation (which representation shall be limited to the laws
of Massachusetts and United States federal law) pertaining to its
banking or trust powers, judgment or order applicable to such
party or any of its assets, and will not require the consent or
approval of any stockholders of the Trust Company or of any
trustee or holder of any material indebtedness of the Trust
Company, will not conflict with or result in a breach of any term
or provision of, or constitute any default under, indebtedness for
the repayment of borrowed money or any other material indenture,
mortgage, contract, agreement or other instrument to which it is
a party or by which it or any of its assets is bound, will not result
in any violation of any Laws (which representation shall be limited
to the laws of Massachusetts and United States federal law
pertaining to its banking or trust powers), which violation of any
such Law would materially adversely affect the ability of such
party to perform its obligations under any Transaction Document
to which it is or is to be a party or question the validity or
enforceability of the Transaction Documents to which it is or is to
be a party or require the consent or approval of, the giving of
notice to, the registration, qualification or filing with, or the taking
of any other action with respect to, any federal or state
governmental commission, authority, body or agency under any
existing law (which representation shall be limited to the laws of
Massachusetts and United States federal law) governing the
banking or trust or fiduciary powers of the Trust Company, except
for filings, if any, made pursuant to any periodic reporting
requirements applicable to it.
(d) Authorization, Execution, Delivery and
Enforceability of Transaction Documents. Each of the Transaction
Documents to which Trust Company is or is to become a party,
and any other agreement entered into in connection with any
transaction contemplated by any Transaction Document, has been
duly authorized by all necessary action on the part of Trust
Company, has been duly executed and delivered, and is the legal,
valid and binding obligation of Trust Company enforceable against
Trust Company in accordance with its terms, except as
enforceability thereof may be limited by the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally and by general
principles of equity. Each of the Transaction Documents to which
the Trustee (including, without limitation, in its capacity as Lessor)
is or is to become a party, and any other agreement entered into
in connection with any transaction contemplated by any
Transaction Document, (i) has been duly authorized by all
necessary action on the part of the Trustee, has been duly executed
and delivered, and (ii) is the legal, valid and binding obligation of
Trustee (but not Trust Company) enforceable against such party in
accordance with its terms, except as enforceability thereof may be
limited by the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights generally and by general principles of equity.
(e) Authorizations and Consents. The nature of Trust
Company, its execution and delivery of each Transaction
Document to which it is a party (regardless of the capacity in
which it is a party), its consummation of the transactions
contemplated thereby, its compliance with the terms thereof or any
circumstance in connection with the transactions contemplated
thereby does not require the consent of any Person or the approval
or authorization of, or filing, registration or qualification with, any
Massachusetts or federal governing authority governing the
banking or trust powers of Trust Company (other than such as
have been obtained) as a condition to such execution, delivery and
compliance. All authorizations, consents, licenses, orders,
approvals, waivers, extensions or variances of, or notices to or
registrations or filings with any governmental department,
commission, board, bureau, agency or instrumentality (which
representation shall be limited to the laws of Massachusetts and
United States federal law pertaining to its banking or trust powers)
necessary to the valid execution, delivery and performance by the
Trust Company and the Trustee, respectively, of the Declaration
of Trust, this Agreement and the other Transaction Documents to
which such party is or is to be a party have been obtained.
(f) Authorization, Execution, Delivery and
Enforceability of Instruments. Each of the Notes and the
Certificates (i) has been duly authorized by all necessary corporate
action on the part of the Trust Company, in its capacity as
Trustee, has been duly executed and delivered by the Trustee, and
(ii) constitutes a legal, valid and binding obligation of the Trustee
(acting solely as Trustee under the Declaration of Trust, and not
in its individual capacity), enforceable against the Trustee in
accordance with their terms and the terms of the Declaration.
(g) Liens. Trust Company has not voluntarily created
or granted any Lien upon any portion of the Property other than
in accordance with the terms of the Transaction Documents.
(h) No Brokers. Trust Company has entered into no
agreements, arrangements or negotiations that would require the
payment of any fees or compensation to any brokers, finders, or
similar persons in connection with the transactions contemplated
hereby except for such fees and expense reimbursements to the
parties hereto and their respective counsel as are provided for in
the Transaction Documents and, in the case of the Trustee, the Fee
Letter, and Trust Company (solely with respect to the above
actions taken by it in its individual capacity) agrees to indemnify,
defend and save harmless each other party hereto from and against
any claims for fees or commissions from any Person engaged by
the Trust Company.
(i) Offer of Interests. Neither the Trust Company nor
any Person authorized to act on its behalf has directly or indirectly
offered any interest in the Trust Estate or under the Declaration of
Trust or any interests similar thereto or the Instruments or any
similar security, or offered any thereof for sale to, or solicited any
offer to buy any thereof from, or otherwise approached or
negotiated with respect thereto with, any Person, which offer or
solicitation would require registration under the Securities Act.
ARTICLE III.
TRUSTEE AND TRUST COMPANY COVENANTS
Until the Trustee's obligations hereunder, under the Declaration of
Trust, and all other Transaction Documents have been paid and performed
in full, unless Trustee receives from Agent a written statement specifying
that the Majority Holders do not object to a deviation, Trustee covenants
and agrees with Lessee, Agent, and each of the Instrument Holders as
follows:
Section 3.01. Lien Claims. Trustee shall (a) promptly furnish to
Agent and Lessee a copy of any notice of claims sent to Trustee by any
person claiming or asserting any Lien on any portion of the Property, and
(b) not create or authorize any Liens (other than the Permitted
Encumbrances) on the Property arising by, through, or under Trustee.
Section 3.02. Inspection of Property. At all reasonable times,
Trustee shall permit Agent and/or its representatives to inspect the
Property, provided that such inspection rights are subject to all limitations
and restrictions upon the right of Trustee (as "lessor" under the Lease) to
inspect the Property under the Lease.
Section 3.03. Notice of Significant Matters.
(a) Trustee shall promptly supply to Agent and Lessee
copies of any tax or other bills, and any other notices or other material
communications received by Trustee from any Person (including, without
limitation, Lessee, Lease Guarantor, or any Tribunal) relating to the
Property or any Transaction Document unless it is evident that Agent
and/or Lessee, as the case may be, shall have independently received such
communication. Without limitation, it is expressly intended that the
foregoing covenant shall require delivery to Agent and Lessee of any
notice or communication received by Trustee with respect to any
compliance or non-compliance of the Property with respect to
Environmental Laws, or the presence of Hazardous Materials on or
emanating from the Property. Notwithstanding the foregoing, however,
Trustee shall have no obligation to provide Lessee with copies of any
instructions, communications, directions, or authorizations received from
Agent or any Instrument Holder with respect to or relating to actions to
be taken by the Trustee as a result of an Event of Default or Incipient
Default.
(b) Trustee shall give at least thirty (30) days prior
written notice to Agent, each Instrument Holder, and Lessee of any
change in the place of business of, or the change in the legal, trade or
fictitious business names used by Trustee and shall, upon Agent's or
Lessee's request, execute any additional certificates or instruments that
Agent or Lessee may deem appropriate or necessary in connection with
any such change.
(c) Trustee shall also notify Agent and Lessee in writing
within five (5) Business Days after Trustee acquires knowledge of the
occurrence of any event or circumstance that would, with or without
notice and or the passage of time, be or become an "Event of Default,"
"Default" or "Environmental Event," under any of the Transaction
Documents.
Section 3.04. Qualification; Business; Use of Advances. The
Trustee covenants and agrees (i) to appoint a Co-Trustee pursuant to
Section 8.04 of the Declaration of Trust, if required, to qualify in each
state in which a Parcel is located, (ii) to conduct no business other than
in respect of the Property, and (iii) to use the Advances solely to acquire
the Parcels and Improvements, as the Agent may direct, in accordance
with the Transaction Documents.
Section 3.05. Encumbrances.
(a) Trustee shall not, directly or indirectly, (i) authorize
any materials, equipment, fixtures, or any other part of the Property to be
purchased or installed under any arrangement wherein a Lien (other than
a Permitted Encumbrance) on such property is retained or the right is
reserved or accrues to any Person to remove or repossess any such items
or to consider such as personal property, or permit any lease of any
equipment or improvements related to the operation of the Improvements,
or (ii) otherwise create, incur, or suffer or permit to be created or
incurred or to exist any Lien upon any of the Parcels or Improvements,
except Permitted Encumbrances, or authorize any financing agreement
pertaining to the financing of any equipment or improvements related to
the Property and its operation; provided, however, that Trustee shall not
be in violation of this covenant if Lessee is making a valid contest to such
Lien in compliance with all applicable Laws and in accordance with the
contest provisions of the Lease.
(b) The foregoing limitations and restrictions shall not
apply to Lessee's Equipment, as to which Lessee, but not Trustee, may
grant encumbrances or take other actions as may be permitted under the
terms of the Lease.
Section 3.06. Transaction Documents.
(a) Trustee shall not (and shall not purport to) enter
into, amend, modify, permit an assignment or subletting with respect to,
terminate, surrender, take discretionary action with respect to, or cancel
any Transaction Documents, including, without limitation, the Declaration
of Trust, without the consent of the Majority Holders, which consent may
be withheld in such Holders' discretion except in those instances where
the Transaction Documents require that such approval be exercised
reasonably, in which event the Holders shall not unreasonably withhold
or delay their approval of the matter in question.
(b) Trustee shall not amend, supplement, modify, or
terminate the Declaration of Trust without the prior written consent of
Lessee, which consent shall not be unreasonably withheld so long as
Lessee's rights and interests are not materially adversely affected thereby.
The Lessee shall be deemed to be a third party beneficiary under the
Declaration of Trust to the extent of the rights (including, without
limitation, rights relating to any monies, consents, approvals and notices)
given to the Lessee thereunder, and the Lessee shall have a direct right to
enforce all such rights. Notwithstanding the foregoing, Lessee shall not
be responsible for any costs or expenses incurred in connection with any
modifications to the Declaration of Trust that are not requested by Lessee.
Section 3.07. Transactions with Affiliates. Trustee will not,
directly or indirectly, enter into any transaction with respect to the
ownership of the Property (or, if at any time the Trustee obtains
possession of the Property as a result of the expiration or termination of
the Lease, the operation of the Property) with any of its Affiliates other
than in the ordinary course of business and upon fair and reasonable terms
no less favorable than Trustee could obtain or could become entitled to in
an arm's-length transaction with a Person which was not an Affiliate of
Trustee. No transactions by Trustee (whether with Affiliates of Trustee
or otherwise) shall affect Lessee's rights with respect to the Property
pursuant to the Lease so long as no Event of Default exists.
Section 3.08. Transfer or Encumbrance of the Property. Except
as a result of the exercise by Lessee or a nominee of Lessee of any
options to purchase the Property or a portion thereof contained in the
Lease, or at the request of Agent or the Majority Holders after the
occurrence of an Event of Default, Trustee will not, directly or indirectly,
voluntarily or by operation of Law, sell, convey, transfer, assign,
encumber, pledge, lease, rezone, or permit to be sold, conveyed,
transferred, assigned, encumbered, pledged, leased (except for the Lease
and any sublease permitted under the terms of the Lease) or rezoned, or
otherwise dispose of, any interest in all or any part of the Property
without Agent's prior written approval, which approval may be withheld
for any reason in the sole and absolute discretion of Agent. So long as
the Lease remains in effect, any transaction by Trustee with respect to the
Property approved by Agent shall be made expressly subject to the rights
of Lessee under the Lease, including Lessee's purchase options
thereunder. Notwithstanding the foregoing, Agent agrees to execute such
instruments or documents as Lessee may request in connection with the
granting of easements or other such interests affecting the Property under
those circumstances where the Lessee is permitted to grant such rights
pursuant to the Lease and after Lessee has satisfied all requirements of the
Lease with respect to such matters. In no event shall Agent be obligated
to grant any recognition, non-disturbance or other rights to any subtenant
of Lessee under the Lease that would survive termination or expiration of
the Lease. The Trustee shall not voluntarily create or grant any Lien
upon any portion of the Property other than in accordance with the terms
of the Transaction Documents.
Section 3.09. Compliance with Laws and Documents. Trustee will
not, directly or indirectly, violate, or permit or authorize Lessee to
violate, the provisions of any Laws, any Transaction Document, or any
of the instruments and documents constituting or evidencing Permitted
Encumbrances. Further, Trustee will not change, or cause or seek a
change (nor, to the extent within Trustee's control, will Trustee permit
Lessee or any third party to do so) in any Laws or any private contracts
or other agreements that may cause a material adverse effect on the
ownership, use, or operation of the Property without the prior written
consent of Agent; provided, however, that Trustee shall not be in violation
of the covenants in this Section if Lessee is making a valid contest to such
Lien in compliance with all applicable Laws and in accordance with the
contest provisions of the Lease.
Section 3.10. Assignment. Trustee will not, directly or indirectly,
assign or transfer, or attempt to do so, any of its Rights, duties, or
obligations under any of the Transaction Documents except to a successor
trustee appointed in accordance with Section 8.02 of the Declaration of
Trust. Any resignation by Trustee (whether permitted or not) of Trustee
under the Declaration of Trust shall not affect Lessee's rights with respect
to the Property under the Lease. If the Trustee is replaced by a successor
trustee, all reasonable costs incurred by Agent, Trustee, or the successor
trustee in connection with the substitution of the Trustee, the assignment
of the rights and duties of the Trustee to the successor trustee, and the
transfer of the Trust Estate to the successor trustee shall be borne by
Lessee.
Section 3.11. Other Tenant Leases. Other than the Lease, Trustee
shall not enter into any lease, tenancy, occupancy arrangement, or other
similar agreement with respect to the Property, or any portion thereof nor
shall Trustee consent to the entry by Lessee into any sublease of all or any
portion of the Property other than to subleases specifically approved or
permitted pursuant to Section 17 of the Lease, without Agent's prior
written consent, which consent may be withheld for any reason in Agent's
sole discretion. Nothing in the foregoing shall be deemed to prohibit or
further condition assignments or subleases by the Lessee, or the addition
of Additional Lessees to the Lease where permitted under the terms of the
Lease.
Section 3.12. Agent's Approval of Settlements. Subject to the
rights of Lessee under the Lease unilaterally to settle certain claims,
Trustee shall not settle or compromise any claims relating to damage
claims, insurance proceeds, or condemnation awards relating to the
Property without the prior written consent of Agent, which shall not be
unreasonably withheld so long as no Event of Default exists.
Section 3.13. Notice of Actions; Prosecution. Promptly upon
obtaining actual knowledge of any condemnation or threatened
condemnation, or any damage or destruction, of any portion of the
Property, Trustee shall notify Agent and Lessee of such fact. Trustee
shall then take such actions, including, without limitation, exercise of
rights provided for in the Lease arising out of such condemnation, as may
be directed by Agent to protect and/or defend the positions and interests
of Trustee and the Instrument Holders with respect to such matter, but
subject to the rights of Lessee under the Lease if the Lease then remains
in effect as to the affected Parcel(s). Agent, on behalf of the Instrument
Holders, shall be entitled to direct the exercise of Trustee's rights in
respect of, and control, such actions (except to the extent that Lessee has
the unilateral right to control such matters under the Lease), including
being represented by separate counsel at Lessee's expense if reasonably
deemed necessary by Agent, and Trustee shall deliver, or cause to be
delivered, to Agent such instruments as Agent may request from time to
time to permit such participation.
Section 3.14. Covenants of Trust Company.
(a) The Trust Company shall give at least thirty (30)
days prior written notice to Agent, each Instrument Holder and Lessee of
any change in the place of business of, or the change in the legal, trade
or fictitious business names used by Trust Company and shall, upon
Agent's or Lessee's request, execute any additional certificates or
instruments that Agent may deem appropriate or necessary in connection
with any such change.
(b) The Trust Company shall not directly or indirectly
create or permit to be created or remain or leave undischarged any Lien
attributable to it, which is not related to the transactions contemplated by
the Transaction Documents, on any Parcel or Improvements thereon or
any interest therein or in the Trust Estate other than Permitted
Encumbrances. The Trust Company agrees that it will, at its own cost
and expense, take such action as may be necessary duly to discharge and
satisfy in full, promptly after the same first becomes known to the Trust
Company, any Lien attributable to it unrelated to the transactions
contemplated by the Transaction Documents.
(c) The Trust Company shall not transfer any of the
estates, properties, rights, powers, duties or trusts of the Trustee to any
successor trustee or to any additional or separate trustee under the
Declaration of Trust without giving written notice thirty (30) days prior
to such transfer to the Agent and the Lessee (unless such transfer is
effected pursuant to Section 8.02(d) of the Declaration of Trust, in which
event, written notice thereof shall be provided promptly following such
transfer). The Trust Company covenants and agrees that all such transfers
to a successor trustee shall be done in compliance with and pursuant to the
terms and conditions of this Agreement.
(d) Trust Company shall not amend, supplement, modify
or terminate the Declaration of Trust or any of the other Transaction
Documents without the prior written consent of Lessee, which consent
shall not be unreasonably withheld so long as Lessee's rights and interests
are not materially adversely affected thereby. The Lessee shall be deemed
to be a third party beneficiary under the Declaration of Trust to the extent
of the rights (including, without limitation, rights relating to any monies,
consents, approvals and notices) given to the Lessee thereunder, and the
Lessee shall have a direct right to enforce all such rights.
Notwithstanding the foregoing, Lessee shall not be responsible for any
costs or expenses incurred in connection with any modifications to the
Declaration of Trust that are not requested by Lessee.
(e) Trust Company shall maintain its existence as a
Massachusetts trust company and preserve and keep in full force and
effect its rights and franchises as necessary to permit it to serve as Trustee
hereunder so long as it is the Trustee; provided, that the sole obligation
of the Trust Company with respect to a breach of this covenant shall be
to resign as Trustee in accordance with Section 8.02 of the Declaration of
Trust.
ARTICLE IV.
THE NOTES AND THE CERTIFICATES
Section 4.01. Rates Applicable to Instruments. Each of the Notes
shall bear interest at the Note Rate applicable to such Note, and each
Certificate shall earn a yield at the Certificate Rate applicable to such
Certificate. All payments of principal, interest, yield and stated amount
on the Instruments that are not paid when due in accordance with the
terms of this Agreement and the applicable Instruments shall bear interest
at the Default Rate until paid. To the extent permitted by applicable Law,
interest on the unpaid principal balance of the Notes and yield on the
Certificates from time to time outstanding at the rates provided in this
Agreement shall be calculated on the basis of the actual number of days
elapsed, but computed as if each year consisted of three hundred and sixty
(360) days. However, any calculations of the Maximum Rate shall be
made on the basis of a 365 (or 366, as applicable) day year. Acceptance
by Trustee or any Instrument Holder of any payment in an amount less
than the amount then due shall be deemed an acceptance on account only.
Section 4.02. Assignments and Participations.
(a) The Lessee may not assign its rights or delegate its
obligations under this Agreement without the prior written consent of all
of the Instrument Holders. The foregoing shall not, however, be deemed
to limit Lessee's rights under the Lease with respect to the Property,
including the right to assign to other parties that constitute "Lessee" under
the Lease.
(b) Each Instrument Holder may assign all or a portion
of the Instruments then held by it and its rights and obligations under this
Agreement and the other Transaction Documents to another bank or
financial institution approved by Lessee, which approval shall not be
unreasonably withheld or delayed. The parties to each such assignment
shall execute and deliver to the Agent for its acceptance and recording in
the Register (as defined in the Declaration of Trust) an "Assignment
Agreement" (herein so-called) in substantially the form attached hereto as
Exhibit "A". Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment Agreement
(which effective date shall be at least five (5) Business Days after the
execution of such Assignment Agreement), (x) the assignee thereunder
(the "Assignee") shall, to the extent that rights and obligations hereunder
have been assigned to it, have the rights and obligations of an Instrument
Holder hereunder and a Holder under the Transaction Documents arising
subsequent to such assignment and (y) the assignor thereunder (the
"Assignor") shall, to the extent that rights and obligations hereunder have
been assigned by it, relinquish its rights (other than any rights to
indemnification it may have hereunder under the Transaction Documents)
under this Agreement with respect to the Instruments (or interests therein)
assigned. No Assignee of an Instrument or an interest therein shall
become a "Purchaser" hereunder nor shall any Assignee have any
Commitment for Advances hereunder as a result of such assignment, and
no Purchaser shall be released from any unfunded Commitment hereunder
as a result of an assignment of the Instruments then held by such
Purchaser. Any Advance made by a Purchaser against its Instruments
after the assignment of an interest in such Instrument to a third party shall
be deemed to have been made by such Purchaser against the portion of the
Instrument that is still held by the Purchaser in question. No Assignee of
an Instrument or an interest therein shall acquire any greater rights with
respect to or arising out of such Instrument therein than were available to
the original Holder thereof (or would be available to such original Holder
if it were the then Holder thereof). Lessee shall not be responsible for
any costs, expenses or other charges in connection with any assignment
hereunder.
(c) By executing and delivering an Assignment
Agreement, the Assignor thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
such Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement and the other Transaction
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, the other Transaction Documents
or any other instrument or document furnished pursuant hereto; (ii) such
Assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Lessee or the
performance or observance by the Lessee of any of its obligations under
this Agreement or any other Transaction Document, any other instrument
or document furnished pursuant hereto; (iii) such Assignee confirms that
it has received a copy of this Agreement, together with such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision with respect to entering into such Assignment
Agreement; and (iv) such Assignee will, independently and without
reliance upon the Lessee, the Agent, the Trustee, such Assignor or any
other Instrument Holder and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement.
(d) Each Instrument Holder may sell participations (as
opposed to assignments of Instruments or assignments of partial interests
in Instruments) to one or more banks or other entities in or to all or a
portion of the Instruments then held by it and its rights and obligations
under this Agreement and the other Transaction Documents; provided,
however, that (i) such Instrument Holder shall remain the Holder of any
such Instrument for all purposes under this Agreement and the other
Transaction Documents and the Lessee, the Trustee, the Agent and the
other Instrument Holders shall continue to deal solely and directly with
such Instrument Holder in connection with such Instrument Holder's rights
and obligations under this Agreement; (ii) no participant shall be entitled
to receive any greater payment than such Instrument Holder would have
been entitled to receive with respect to the rights participated except as a
result of circumstances arising after the date of such participation to the
extent that such circumstances affect other Instrument Holders and
participants generally; and (iii) no Instrument Holder shall grant a
participation that conveys to the participant the direct right to vote or
receive notices under this Agreement or other Transaction Documents in
respect of the Instrument in which such participant holds a participation.
(e) Any Instrument Holder may, in connection with any
assignment or participation or proposed assignment or participation
pursuant to this Section 4.02, disclose to the assignee or participant or
proposed assignee or participant any information relating to the Lessee
furnished to such Instrument Holder by or on behalf of the Lessee;
provided, that, prior to any such disclosure, the assignee or participant or
proposed assignee or participant shall agree to preserve the confidentiality
of any confidential information relating to the Lessee received by it from
such Instrument Holder in a manner consistent with that set forth in
Section 6.17 hereof and any other provision of the Transaction Documents
relating to the preservation of confidentiality.
(f) Anything in this Section 4.02 to the contrary
notwithstanding, any Instrument Holder may assign and pledge all or any
of the Instruments held by it to any Federal Reserve Bank or the United
States Treasury as collateral security pursuant to applicable regulations of
the Board of Governors of the Federal Reserve System and any operating
circular issued by such Federal Reserve Bank; provided that any payment
made by the Lessee to the Trustee for the benefit of such assigning and/or
pledging Instrument Holder in accordance with the terms of the
Transaction Documents shall satisfy the Lessee's obligations under the
Transaction Documents in respect thereof to the extent of such payment.
(g) No assignment shall result in a change in the Note
Rate or Certificate Rate applicable to the Instrument in question.
(h) Regardless of the number of Instrument Holders, at
all times the Instrument Holders shall designate a single "Agent" to
interface with Lessee and the Trustee, and the Lessee and Trustee shall be
required to pay to or otherwise deal only with the Agent and not the
individual Instrument Holders. Wherever the Transaction Documents
grant rights or remedies to the Instrument Holders (either in the aggregate
or to a particular class of Instrument Holders) all such rights and remedies
shall be exercised through the Agent. Lessee and Trustee shall be free to
ignore directions or instructions delivered directly by any Instrument
Holder rather than by Agent on behalf of the Instrument Holders (or
applicable portion thereof).
Section 4.03. Taxes.
(a) Any and all payments by the Lessee or the Trustee
hereunder or under any of the Transaction Documents (including, without
limitation, payments of Net Rent, Contingent Rent Payments, Offer
Purchase Price, and Additional Rent (as such terms are defined in the
Lease), interest, current yield, fees and principal and stated amounts of
the Instruments) shall be made free and clear of and without deduction for
any and all present or future Taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto, excluding, in the
case of payments made to each Instrument Holder or the Trustee (as the
case may be), (1) taxes imposed on the Trustee's or such Instrument
Holder's income, and franchise taxes imposed on it, by the jurisdiction
under the Laws of which such Instrument Holder or the Trustee (as the
case may be) is organized or any political subdivision thereof and, in the
case of each Instrument Holder, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction of such Instruments
Holder's office where Instrument Holder's interest in the Instruments is
administered or any political subdivision thereof and (2) any taxes
imposed by the United States of America by means of withholding at the
source if and to the extent that such taxes shall be in effect and shall be
applicable, on the more recent to occur of (x) the original issuance of the
applicable Instrument, or (y) the date of adjustment of the Note Rate or
Certificate Rate applicable to such Instrument or applicable interest therein
in connection with the Secondary Transaction, to payments to be made to
such Instrument Holder or the Trustee, as the case may be (all such non-
excluded Taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Charges" and all such excluded
Taxes, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Excluded Charges"). If the Lessee or the
Trustee shall be required by Law to deduct any Charges from or in
respect of any sum payable hereunder or under any of the Transaction
Documents to the Trustee or any Instrument Holder (i) the sum otherwise
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 4.03) the Trustee or such Instrument Holder (as
the case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Lessee or the Trustee
shall make such deductions, and (iii) the Lessee or the Trustee shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Law.
(b) Notwithstanding anything to the contrary contained
in this Agreement, the Lessee and/or the Trustee, as applicable, shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or other similar taxes imposed by the United States of America on
Net Rent, Contingent Rent Payments, Offer Purchase Price, and
Additional Rent, interest, current yield, fees, principal and stated amounts
of the Instruments or other amounts payable hereunder or under the other
Transaction Documents for the account of the Trustee or any Instrument
Holder (without the payment of increased amounts to such Instrument
Holder or the Trustee pursuant to subsection (a) above in the case of
Excluded Charges) other than the Trustee (or any successor thereto) or an
Instrument Holder (i) that is a domestic corporation for Federal income
tax purposes or (ii) which has filed with the Lessee and/or the Trustee all
applicable forms, affidavits, or certificates for the applicable year to the
extent deduction or withholding of such taxes is not required as a result
of the filing. If the Lessee or the Trustee shall so deduct or withhold any
such taxes, it shall provide a statement to the Lessee, Trustee and Agent,
as applicable, setting forth the amount of such taxes so deducted or
withheld, the applicable rate and any other information or documentation
which such Instrument Holder or the Trustee may reasonably request for
assisting such Instrument Holder or the Trustee to obtain any allowable
credits or deductions for the taxes so deducted or withheld in the
jurisdiction or jurisdictions in which such Instrument Holder is subject to
taxes.
(c) In addition, the Lessee agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made hereunder
or under the Transaction Documents or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any of the
Transaction Documents (hereinafter referred to as "Other Taxes").
(d) The Lessee will indemnify the Trustee and each
Instrument Holder for the full amount of any Charges and Other Taxes
(including, without limitation, any Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.03) paid by the
Trustee or such Instrument Holder (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with
respect thereto except as a result of the negligence or willful misconduct
of such Instrument Holder or the Trustee, as the case may be, whether or
not such Charges or Other Taxes were correctly or legally asserted.
Payments under this indemnification shall be made within thirty (30) days
from the date such Instrument Holder or the Trustee (as the case may be)
makes written demand therefor accompanied by reasonable substantiation
of the requested payment. Lessee shall not be responsible for any interest
or penalties in connection with such Charges or Other Taxes unless Lessee
has been notified of such Charges or Other Taxes as provided above at
least thirty (30) days prior to the imposition of any such interest or
penalties (or, if later, within thirty (30) days after the Trustee or
Instrument Holder, as applicable, obtained actual knowledge that a Charge
or Other Tax for which Lessee has responsibility hereunder has been
imposed).
(e) Within thirty (30) days after the date of the payment
of Charges by or at the direction of the Lessee, the Lessee will furnish to
the Trustee the original or a certified copy of a receipt evidencing
payment thereof. Should any Instrument Holder or the Trustee ever
receive any refund, credit or deduction from any taxing authority to which
such Instrument Holder or the Trustee would not be entitled but for the
payment by the Lessee of Charges as required by Section 4.03 (it being
understood that the decision as to whether or not to claim, and if claimed,
as to the amount of any such refund, credit or deduction shall be made by
such Instrument Holder or the Trustee in its sole discretion), such
Instrument Holder or the Trustee thereupon shall repay to the Lessee an
amount with respect to such refund, credit or reduction equal to any net
reduction in taxes actually obtained by such Instrument Holder to the
extent attributable to such refund, credit or deduction.
(f) Without prejudice to the survival of any other
agreement of the Lessee hereunder, the agreements and obligations of the
Lessee contained in this Section 4.03 shall survive the payment in full of
principal and stated amount of and interest and current yield on the
Instruments.
Section 4.04. Avoidance of Taxes, Other Charges and Increased
Costs.
(a) Each Instrument Holder shall use reasonable efforts
(consistent with its internal policies and legal and regulatory restrictions)
to select a jurisdiction for its purchasing office or change the jurisdiction
of its purchasing office (or other office where its interest in the
Instruments is administered), as the case may be, so as to avoid the
imposition of any Increased Costs, Charges or Other Taxes or to eliminate
any additional Increased Costs, Charges or Other Taxes which may
thereafter accrue; provided, that no such selection or change of the
jurisdiction for its purchasing or other office shall be made if, in the
reasonable judgment of such Instrument Holder, such selection or change
would be disadvantageous to such Instrument Holder.
(b) In the event that any Instrument Holder (other than
CLI) shall claim payment of any additional amounts pursuant to Section
4.03 or payment of Increased Costs, the Lessee shall have the right, if no
Incipient Default or Event of Default exists, to replace such Instrument
Holder with another Approved Instrument Holder provided that such
Approved Instrument Holder unconditionally offers in writing (with a copy
to the Trustee) to purchase, in accordance with the provisions of Section
4.02, all of such Instrument Holder's rights hereunder and under the
Transaction Documents, including the Instruments held by such Instrument
Holder, without recourse, at the principal and stated amount of such
Instruments plus interest and current yield accrued thereon to the date of
such purchase on a date therein specified. If the Instrument Holder accepts
such purchase offer and such purchase is consummated, the Lessee shall
be obliged to pay, simultaneously with such purchase and sale, the
additional amounts to such Instrument Holder pursuant to Section 4.03 and
the Increased Costs attributable to such Instrument Holder in the manner
provided in the Transaction Documents to the date of such purchase as
well as all other amounts due and payable under the Transaction
Documents to or for the benefit of such Instrument Holder; provided, that
(x) if a Instrument Holder accepts such an offer and such bank or financial
institution fails to purchase such rights and interest on such specified date
in accordance with the terms of such offer, the Lessee shall continue to
be obliged to pay the additional amounts to such Instrument Holder
pursuant to Section 4.03 and to pay the Increased Costs attributable to
such Instrument Holder in the manner provided in the Transaction
Documents and (y) if such Instrument Holder fails to accept such purchase
offer, the Lessee shall not be obliged to pay such Instrument Holder such
additional amounts pursuant to Section 4.03 or the Increased Costs
attributable to such Instrument Holder from and after the date of such
purchase offer.
Section 4.05. Sharing of Payments, Etc. If any Instrument Holder
shall obtain any payment (whether voluntary or involuntary), on account
of the Instruments held by it (other than on account of Reserve Costs,
Break Costs, or Increased Costs and other than pursuant to Section 4.03
or any indemnification provision of the Transaction Documents) in excess
of its ratable share of payments on account of the Instruments obtained by
all the Instrument Holders, such Instrument Holders (or Agent on behalf
of the Instrument Holders) shall forthwith make appropriate payments or
distributions to other Instrument Holders calculated so that each
Instrument Holder receives the benefit of its ratable share of each
payment.
Section 4.06. Instrument Holders' Credit Decisions. By its
acceptance of its Instruments each Instrument Holder (whether it acquires
such Instrument as a Purchaser or as an Assignee) acknowledges that it
has, independently and without reliance upon the Trustee, Agent, or any
other Instrument Holder and based on such financial statements and/or
other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement or to acquire
an Instrument. Each Instrument Holder also acknowledges that it will,
independently and without reliance upon the Trustee, Agent, or any other
Instrument Holder and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions with respect to this Agreement or any of the other Transaction
Documents. Without limitation, each Instrument Holder acknowledges
that it has not relied upon statements or representations of Lessee
regarding its financial condition other than the financial information
provided by Lessee to Agent in connection with the execution of this
Agreement, the specific representations contained in the Transaction
Documents, and where applicable, the financial reports and information
supplied by Lessee to Agent during the Term of the Lease pursuant to the
Lease, the Lease Guarantee, or the other Transaction Documents.
ARTICLE V.
MISCELLANEOUS
Section 5.01. Survival. Except as otherwise expressly provided
herein or other applicable instrument or document, the parties' obligations
under this Agreement and in any certificate or other instrument delivered
by any party or on such party's behalf pursuant to this Agreement shall
not survive payment in full of all amounts due on the Notes and the
Certificates and under any of the Transaction Documents, the execution
and delivery of any Transaction Document, any issuance or disposition of
any of the Instruments, any disposition of any interest in the Property or
the termination of any Transaction Document, and shall continue in effect
regardless of any investigation made by or on behalf of any party hereto
and notwithstanding that any party may waive compliance with any other
provision of any Transaction Document. However, it is expressly agreed
that all indemnification provisions for the benefit of Trustee, Agent,
Purchasers, and/or Instrument Holders provided herein or in any such
other instrument or document shall survive any such payments, whether
or not expressly so stated.
Section 5.02. Notices. Unless specifically otherwise provided,
whenever any of the Transaction Documents requires or permits any
consent, approval, notice, request, or demand from one party to another,
the consent, approval, notice, request, or demand must be in writing to be
effective and shall be deemed delivered one (1) Business Day after deposit
with a nationally recognized overnight courier service for overnight
delivery addressed to the parties hereto at the respective addresses
specified below or at such other address as they may specify by written
notice. The address for each party for purposes hereof is as follows:
Holders, Purchasers and Agent:
Citicorp Leasing, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: EFL/CBL Credit Head
FAX No. 914/000-0000
with copies to:
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
FAX No. 214/000-0000
Trustee:
State Street Bank and Trust Company
Corporate Trust Xxxxxxxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
Vice President
FAX No. 617/000-0000
with copies to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
FAX No. 860/000-0000
and a courtesy copy to Agent at:
Citicorp Leasing, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: EFL/CBL Credit Head
FAX No. 914/000-0000
Lessee:
The Pep Boys - Manny, Moe & Xxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Senior Vice President-Finance
FAX No. 215/000-0000
with copies to:
The Pep Boys - Manny, Moe & Xxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Real Estate Counsel
FAX No. 215/000-0000
Notices sent by any other method (including certified mail, personal
delivery, or facsimile transmission) shall be deemed delivered when
actually received by the addressee. Any notice of change of address shall
be effective only upon actual receipt, regardless of delivery method, and
such new address shall be effective as to notices given by the other parties
commencing ten (10) days after such change of address notice is received
by such parties. No party may establish an official address for notice
outside the continental United States.
Section 5.03. Severability. If any provision hereof or the
application thereof to any Person or circumstance shall be invalid, illegal
or unenforceable, the remaining provisions or the application of such
provision to Persons or circumstances other than those as to which it is
invalid or enforceable, shall continue to be valid and enforceable.
Section 5.04. Amendments, Etc. No amendment or waiver of any
provision of this Agreement, nor consent to any departure by the Lessee
therefrom, shall in any event be effective unless the same shall be in
writing and signed by Agent (with the consent of the Majority Holders),
the Lessee and the Trustee, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given unless otherwise provided in such written instrument.
Section 5.05. Headings. The table of contents and headings of the
Articles, Sections and subsections are for convenience only and shall not
affect the meaning of this Agreement.
Section 5.06. Definitions. Except as otherwise expressly
provided, capitalized terms used in this Agreement shall have the
meanings given in Schedule 1 hereto.
Section 5.07. Benefit. The parties hereto and their permitted
successors and assigns, but no others, shall be bound hereby and entitled
to the benefit hereof. Each registered assignee of a partial interest in an
Instrument (regardless of whether a New Instrument is issued to such
assignee) shall be treated as an Instrument Holder and shall be a
beneficiary hereof; however, no holder of a participation or other
derivative interest in an Instrument shall be a beneficiary hereof.
Section 5.08. Place of Payment. The Trustee will cause all
amounts to be paid by Trustee which become due and payable on the
Instruments to be paid by bank wire transfer of immediately available
funds or, at the option of such Instrument Holder, such Affiliate, bank or
institutional investor, by check of the Agent, duly mailed, delivered or
made at the address or account provided in writing by such Instrument
Holder to the Trustee and Agent.
Section 5.09. Counterparts. The parties may sign this Agreement
in any number of counterparts and on separate counterparts, each of which
shall be an original but all of which together shall constitute one and the
same instrument.
Section 5.10. Governing Law; Venue.
(a) THIS AGREEMENT AND ALL TRANSACTION
DOCUMENTS SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
PENNSYLVANIA, WITHOUT REGARD TO ITS CONFLICT OF
LAWS PRINCIPLES; PROVIDED THAT TO THE EXTENT THAT A
PORTION OF THE PROPERTY IS LOCATED IN A STATE OTHER
THAN THE STATE OF PENNSYLVANIA THE LAWS OF SUCH
STATE SHALL GOVERN SUCH PROVISIONS, IF ANY, OF THIS
AGREEMENT OR THE OTHER TRANSACTION DOCUMENTS, TO
THE EXTENT THAT THE STATE IN WHICH SUCH PORTION OF
THE PROPERTY IS LOCATED REQUIRES THAT THE LAWS OF
SUCH STATE BE APPLIED THERETO, IN WHICH CASE AND TO
SUCH EXTENT THIS AGREEMENT AND THE OTHER
TRANSACTION DOCUMENTS SHALL BE GOVERNED BY AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE, IT IS EXPRESSLY AGREED, HOWEVER, THAT IT IS THE
DESIRE AND INTENT OF THE PARTIES THAT THE LAW OF THE
STATE OF PENNSYLVANIA GOVERN ALL PORTIONS OF THIS
AGREEMENT AND THE OTHER TRANSACTION DOCUMENTS
(UNLESS OTHERWISE EXPRESSED THEREIN) TO THE EXTENT
THAT SUCH INTENT MAY BE HONORED WITHOUT VIOLATION
OF THE LAW OR PUBLIC POLICY OF THE STATE IN WHICH ANY
PORTION OF THE PROPERTY IS LOCATED. All references in this
Agreement or other Transaction Documents to "applicable Law" or terms
of similar import shall be interpreted consistent with the foregoing.
(b) Each of the parties hereto hereby submits to personal
jurisdiction in the State of Pennsylvania for the enforcement of its
obligations hereunder and under any and all other of the Transaction
Documents and waives any and all rights to be sued elsewhere. Each of
the parties hereto hereby acknowledges and agrees that the courts of the
State of Pennsylvania are an appropriate venue for any action, litigation
or lawsuit filed in connection with this Agreement or any of the other
Transaction Documents.
Section 5.11. Business Day. If the date scheduled for any
payment or action under any Transaction Document shall not be a
Business Day, then (unless such Transaction Document provides
otherwise) such payment shall be made or such action shall be taken on
the next succeeding Business Day.
Section 5.12. The Trustee. Except for liability for the
representations and warranties made by Trust Company in its individual
capacity in Section 2.02, and for the gross negligence and willful
misconduct of Trust Company, it is expressly understood and agreed by
the parties hereto that (a) this Agreement is executed and delivered by
Trust Company, not in its individual capacity but solely as Trustee under
the Declaration, in the exercise of the powers and authority conferred and
vested in it as the Trustee, (b) each of the representations, undertakings
and agreements herein made on the part of the Trustee is made and
intended not as personal representations, undertakings and agreements by
Trust Company, but is made and intended for the purpose of binding only
the Property created by the Declaration of Trust, (c) nothing herein
contained shall be construed as creating any liability on Trust Company,
individually or personally, to perform any covenant of the Trustee either
expressed or implied contained herein or in the Transaction Documents,
all such liability, if any, being expressly waived by the parties to this
Agreement and by any Person claiming by, through or under the parties
to this Agreement, and (d) under no circumstances shall Trust Company
be personally liable for the payment of any indebtedness or expenses of
the Trustee or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trustee
under this Agreement or the other Transaction Documents.
Section 5.13. Estoppel Certificates. At any party's request each
other party hereto will execute, acknowledge, and deliver a written
statement, addressed to such Person as the party making the request may
reasonably designate, certifying that this Transaction Agreement or other
applicable Transaction Document is unmodified and in full force and
effect (or, if there have been modifications, that this Transaction
Agreement or other applicable Transaction Document is in full force and
effect as modified, and identifying such modifications), and certifying to
such other matters concerning the Transaction as may reasonably be
requested. In the case of Trustee or Agent, the certificate shall state (in
the case of Trustee, after consultation with Agent) the amount of
outstanding principal and accrued interest or stated amount and accrued
certificate yield, as applicable, due under the Instruments
Section 5.14. Transaction Documents; Further Assurances. Each
of the parties hereto does hereby covenant and agree to perform and be
governed and restricted by the Transaction Documents to which it is a
party and, subject to the terms and conditions thereof, to take or cause to
be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable in connection therewith. The Lessee, the Trustee,
Agent, and the Purchasers will, at the expense of the Lessee, execute and
deliver such further instruments and do such further acts as may be
necessary or proper to carry out more effectively the purposes of the
Transaction Documents and the transactions contemplated thereby. The
Lessee, Agent, the Trustee, and the Purchasers may at any time, subject
to the conditions and restrictions contained in the Transaction Documents,
enter into supplements which shall form a part hereof, when required or
permitted by any of the provisions of the Transaction Documents.
Section 5.15. Confidentiality. Each of the parties hereto (and any
Person that hereafter becomes an Instrument Holder) agrees that unless
otherwise required by Law or by any governmental authority or body or
consented to by the Lessee and CLI it will maintain the confidentiality of
all non-public information (i) regarding the financial terms of this
transaction or (ii) regarding the Lessee or the Property which shall be
furnished to it by the Lessee in connection with the transactions
contemplated by the Transaction Documents, in accordance with the
procedures it generally applies to confidential material. The parties hereto
agree not to publish tombstones or other public announcements in
connection with the transactions contemplated hereby without the consent
of the Lessee and the Agent.
Section 5.16. Interest. It is the intention of the parties hereto to
conform strictly to usury Laws applicable to each Instrument Holder and
the Transactions. Accordingly, if the Transactions would be usurious as
to any Instrument Holder under Applicable Law, then, notwithstanding
anything to the contrary in the Instruments, this Agreement or in any
other Transaction Document or agreement entered into in connection with
the Transactions, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest or current yield as to any
Instrument Holder under Applicable Law that is contracted for, taken,
reserved, charged or received by any Instrument Holder under the
Instruments, this Agreement or under any of such other Transaction
Documents or agreements or otherwise in connection with the
Transactions shall under no circumstances exceed the maximum amount
allowed by such Applicable Law, (ii) in the event that the maturity of the
Instruments is accelerated for any reason, or in the event of any required
or permitted prepayment, then such consideration that constitutes interest
or current yield as to any Instrument Holder under Applicable Law may
never include more than the maximum amount allowed by such Applicable
Law, and (iii) interest or current yield, if any, in excess of that permitted
by Applicable Law provided for in this Agreement or otherwise in
connection with the Transactions shall be, subject to the following
provisions, canceled automatically and, if theretofore paid, shall be
credited by such Instrument Holder on the principal or stated amount of
the Instruments (or, to the extent that the principal or stated amount of the
Instruments shall have been or would thereby be paid in full, refunded by
such Instrument Holder to the party entitled thereto). If at any time the
amount or rate of interest or yield (as applicable) contractually called for
in any Instrument or other Transaction Document (as the same may vary
from time to time pursuant to the terms of such Instrument or other
Transaction Document, the "Stated Rate") exceeds the maximum amount
of interest or yield allowed by Applicable Law in respect of such
Instrument or other Transaction Document, then the rate of interest or
yield to accrue on such Instrument or other Transaction Document shall
be limited to the maximum amount allowed by such Applicable Law, but
any subsequent reduction in the Stated Rate applicable to such Instrument
or other Transaction Document shall not reduce the interest or yield to
accrue on such Instrument or other Transaction Document below the
maximum amount allowed by such Applicable Law until the total amount
of interest or yield on such Instrument or other Transaction Document
equals the amount of interest or yield which would have accrued if the
Stated Rate applicable to such Instrument or other Transaction Document
had at all times been in effect. If at the maturity or final payment of any
Instrument or other Transaction Document the total amount of interest or
yield paid or accrued on such Instrument or other Transaction Document
under the preceding sentence is less than the total amount of interest or
yield which would have accrued if the Stated Rate applicable to such
Instrument or other Transaction Document had at all times been in effect,
then to the fullest extent permitted by Applicable Law, there shall be due
and payable under, and to the Holders of, such Instrument or other
Transaction Document of an amount equal to the difference between (a)
the lesser of (x) the amount of interest or yield (as applicable) which
would have accrued on such Instrument or other Transaction Document
if the maximum amount allowed by Applicable Law had at all times been
in effect and been chosen as the rate or interest or yield to be applicable
throughout the term of such Instrument or other Transaction Document
and (y) the amount of interest or yield (as applicable) which would have
accrued on such Instrument or other Transaction Document if the Stated
Rate applicable to such Instrument or other Transaction Document had at
all times been in effect, and (b) the amount of interest or yield (as
applicable) accrued in accordance with the provisions of such Instrument
or other Transaction Document after giving effect to the preceding
sentence. All sums paid or agreed to be paid to each Instrument Holder
for the use, forbearance or detention of sums included in the Instruments
shall, to the extent permitted by Applicable Law, be amortized, prorated,
allocated and spread throughout the full term of the Instruments until
payment in full so that the rate or amount of interest on account of the
Instruments does not exceed the applicable usury ceiling, if any.
Section 5.17. Money. Unless stipulated otherwise, all references
in any of the Transaction Documents to "dollars," "money," "payments,"
or other similar financial or monetary terms, are references to currency
of the United States of America.
Section 5.18. Number and Gender of Words. Whenever in any
Transaction Document the singular number is used, the same shall include
the plural where appropriate, and vice versa; and other words of any
gender in any Transaction Document shall include each other gender
where appropriate. The words "herein" and "hereunder," and other
words of similar import, refer to the relevant Transaction Document as a
whole and not to any particular part or subdivision thereof.
Section 5.19. Articles, Sections, Exhibits, and Schedules. All
references to "Article," "Articles," "Section," "Sections," "Subsection,"
or "Subsections" contained in this Agreement are, unless specifically
indicated otherwise, references to articles, sections, and subsections of this
Agreement. All references to "Exhibits" and "Schedules" contained in
this Agreement are references to exhibits and schedules attached to this
Agreement, all of which are made a part of this Agreement for all
purposes, the same as if set forth in this Agreement verbatim, it being
understood that if any Exhibit, which is to be executed and delivered,
contains blanks, the same shall be completed correctly and in accordance
with the terms and provisions contained and as contemplated in this
Agreement prior to or at the time of, or after, the execution and delivery
thereof.
Section 5.20. Decisions of Parties. Except as expressly otherwise
provided herein, all opinions, approvals, decisions, and determinations are
to be in such party's discretion and need not be reasonable.
Section 5.21. Restructure of Transaction. Notwithstanding the
provisions of Section 13(b)(i)(B) or (C) of the Lease, in the event of the
occurrence of a change in GAAP or the interpretive rulings applicable
thereunder, or a change in SEC rulings and/or requirements, which in
either case requires the recharacterization of the Lease as a "capital lease"
rather than an "operating lease", Lessee may request that the transaction
be restructured in a manner that will maintain the economic interests of
the parties and will permit Lessee to continue to have the Lease treated as
an "operating lease" for its financial accounting purposes. If Lessee so
requests, and Agent, CLI, all other Purchasers, and the Majority Holders
agree to such a restructure, then the parties will proceed in good faith, but
at Lessee's expense, to negotiate such changes in the structure of the
transaction and the Transaction Documents as the parties may mutually
determine to be necessary to effect such intention. While the parties agree
to cooperate in good faith to negotiate modifications to the Transaction
Documents to achieve operating lease treatment for the Lessee, no party
will be obligated to accept a restructure of the transaction and/or any
modification to any Transaction Document that is, in such party's opinion,
materially adverse to its legal or financial interest. In the event that the
parties are unable to agree to a restructuring or modification which is
acceptable to Lessee, Lessee shall be entitled to exercise the right set forth
in Section 13(b) of the Lease in accordance with the terms and conditions
therein contained.
Section 5.22. Construction of Agreement. Should any provision
of this Agreement require interpretation or construction in any judicial,
administrative, or other proceeding or circumstance, it is agreed that the
parties hereto intend that the court, administrative body, or other entity
interpreting or construing the same shall not apply a presumption that the
provisions hereof shall be more strictly construed against one party by
reason of the rule of construction that a document is to be construed more
strictly against the party who itself or through its agents prepared the
same, it being agreed that the agents of both parties hereto have fully
participated in the preparation of all provisions of this Agreement and all
of the Transaction Documents.
THIS WRITTEN TRANSACTION
AGREEMENT, TOGETHER WITH THE OTHER
TRANSACTION DOCUMENTS, REPRESENTS THE
FINAL AGREEMENT BETWEEN THE PARTIES
WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
Section 5.23. Brokers. Except to the extent of fees or other
payments specifically provided to be paid by Lessee under the Transaction
Documents, each party hereto shall pay or cause to be paid any and all
valid claims of any brokers or agents with whom such party has dealt who
claim a right to any fees or other compensation in connection with
arranging the financing of the Property provided hereby and shall
indemnify, defend and hold all other parties hereto harmless from such
claims, whether or not they are valid.
Section 5.24. WAIVER OF JURY TRIAL. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, AND FOR THE PURPOSE
OF REDUCING THE TIME AND EXPENSE OF LITIGATION, THE
PARTIES HERETO EACH WAIVE TRIAL BY JURY IN ANY
ACTION BROUGHT ON, UNDER, OR BY VIRTUE OF THIS
AGREEMENT, ANY OF THE TRANSACTION DOCUMENTS, OR
ANY OF THE TRANSACTIONS CONTEMPLATED OR
GOVERNED THEREBY.
ARTICLE VI.
THE AGENT
Section 6.01. Appointment.
(a) The Purchasers and the Instrument Holders hereby
designate and appoint CLI as the initial administrative agent (herein
"Agent") on behalf of the Purchasers and the Instrument Holders, as
applicable, under this Agreement and the Transaction Documents. By its
execution hereof CLI authorizes, and by its execution of an Assignment
Agreement and/or by its execution of a supplement hereto becoming a
Purchaser hereunder, each such additional Purchaser and each such
Instrument Holder hereby irrevocably authorizes the Agent to perform the
rights and obligations of the "Agent" hereunder and under the other
Transaction Documents. The Agent shall serve without compensation,
except as otherwise agreed in writing by the Lessee and the Majority
Holders, but the Agent shall be entitled to payment or reimbursement of
its out-of-pocket expenses incurred in the performance of its duties as
provided for in the applicable provisions of the Transaction Documents.
Without limitation, to the extent that any Transaction Document provides
for the payment or reimbursement of expenses incurred by the Purchasers
or Instrument Holders, or any of them, any such expenses incurred by the
Agent in connection with such matters shall be deemed to have been
incurred by the Instrument Holders or Purchasers, as applicable, and the
Agent shall be entitled to the same reimbursement rights.
(b) In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Purchasers or
Instrument Holders, as applicable (or in certain specified circumstances
the Trustee), and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or
for Lessee.
Section 6.02. Nature of Duties.
(a) The Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement or in the other
Transaction Documents. The Agent has a contractual obligation, as
provided herein and in the Transaction Documents, but shall not have by
reason of this Agreement or any other Transaction Document a trust or
fiduciary relationship in respect of any Instrument Holder. Nothing in this
Agreement or any of the other Transaction Documents, expressed or
implied, is intended to or shall be construed to impose upon the Agent any
obligations in respect of this Agreement or any of the Transaction
Documents except as expressly set forth herein or therein.
(b) Each Purchaser and Instrument Holder shall make
its own independent investigation of the financial condition and affairs of
Lessee in connection with the Transactions contemplated hereunder and
shall make its own appraisal of the creditworthiness of Lessee, and the
Agent shall have no duty or responsibility, either initially or on a
continuing basis, to provide any Instrument Holder with any credit or
other information with respect thereto, whether coming into its possession
before the Closing Date or at any time or times thereafter. Each
Purchaser and Instrument Holder acknowledges that neither the Agent nor
counsel to the Agent nor any other Instrument Holder is providing any
assurances, or shall have any responsibility, with respect to the ownership
of any Property or the absence of any Liens or defects of title, or the
authorization, execution, legality, sufficiency or effect of any Transaction
Document or any other document, or the validity, creation, perfection or
priority of any Right, or to investigate or not to investigate any of those
matters, and each Instrument Holder agrees to look solely to its rights as
one of the Instrument Holders with respect to any of the foregoing.
(c) The Agent may at any time request instructions from
the Instrument Holders or Purchasers, as applicable, with respect to any
actions or approvals which by the terms of this Agreement or of any of
the other Transaction Documents the Agent is permitted to take or to
grant, and if such instructions are promptly requested, the Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the
Transaction Documents until it shall have received such instructions from
the Majority Holders or Majority Purchasers, as applicable. Without
limiting the foregoing, no Instrument Holder shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining
from acting under this Agreement, the Instruments, or any of the other
Transaction Documents in accordance with the instructions of the Majority
Holders or Majority Purchasers, as applicable.
(d) If the Agent seeks the consent or approval of the
Instrument Holders or Purchasers (either collectively or with respect to
any particular series of Instruments) to the taking or refraining from
taking any action hereunder, the Agent shall send written notice thereof
to each Instrument Holder or Purchaser, as the case may be (either
collectively or as to the affected series, as applicable) based on the most
recent information known to Agent with respect to such ownership as set
forth in the Register maintained by the Agent. The Agent shall promptly
notify each Instrument Holder or Purchaser, as applicable, at any time that
the Majority Holders or Majority Purchasers, as applicable, have
instructed the Agent to act or refrain from acting in any particular manner
pursuant hereto. Upon request Agent shall supply a copy of the Register
to Lessee.
(e) Whenever this Agreement or any other Transaction
Document requires that the Agent take action at the direction of the
Majority Holders of the Instruments or any particular series of
Instruments, or at the direction of the Majority Purchasers, then prior to
taking the action in question (including, without limitation, prior to giving
directions to the Trustee in connection therewith), Agent shall seek
direction from the Instrument Holders (or applicable series thereof) or
Purchasers, as applicable, and shall take actions or give directions
consistent with the desires of the Majority Holders (with respect to the
applicable series thereof) or the Majority Purchasers, as applicable.
Where this Agreement or the other Transaction Documents do not require
approval of the Majority Holders or Majority Purchasers with respect to
any particular action or direction, then Agent may, but need not, seek
input from the Instrument Holders or Purchasers as to the appropriate
course of action, but in the absence of any such direction Agent shall be
free to take such actions as Agent may deem appropriate and in the best
interests of the Instrument Holders (or the applicable series thereof) or
Purchasers, as applicable, as a whole. In the exercise of its powers and
rights hereunder Agent shall exercise the same care as it exercises with
respect to similar transactions entered into solely for its own account and
shall otherwise have no liability or responsibility to the Instrument Holders
or Purchasers except for actions taken by Agent in bad faith, actions
which are grossly negligent, or actions which constitute willful misconduct
by the Agent.
(f) The Majority Holders (either of the Instruments as
a whole, or of the applicable series of Instruments) shall at any time have
the right to direct the Agent in the exercise of any rights or options that
may then be available to the Instrument Holders of the Instruments (or the
applicable series thereof), and upon receipt of any such direction Agent
shall proceed in the manner directed by the Majority Holders; provided,
that in no event shall Agent have any obligation to proceed in any manner
that Agent in good faith believes may expose Agent to any risk or
obligation unless and until Agent has been provided by the Instrument
Holders with security satisfactory to Agent to protect Agent with respect
to the risk or obligation in question. Similarly, the Majority Purchasers
shall at any time have the right to direct the Agent in the exercise of any
rights or options that may then be available to the Purchasers, and upon
receipt of any such direction Agent shall proceed in the manner directed
by the Majority Purchasers; provided, that in no event shall Agent have
any obligation to proceed in any manner that Agent in good faith believes
may expose Agent to any risk or obligation unless and until Agent has
been provided by the Purchasers with security satisfactory to Agent to
protect Agent with respect to the risk or obligation in question.
(g) In its dealings with the Trustee, the Lessee, or the
Instrument Holders the Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, power
of attorney, or other paper or document which Agent in good faith
believes to be genuine and what it purports to be.
(h) In the event of any good faith disagreement between
any of the parties to this Agreement resulting in adverse claims or
demands being made upon Agent, or if Agent, in good faith, is in doubt
as to what action it should take hereunder, Agent may, at its option,
refuse to comply with any claims or demands on it so long as such
disagreement continues or such doubt exists, and in any such event, Agent
shall not be or become liable in any way or to any person for its failure
or refusal to act, and Agent shall be entitled to continue so to refrain from
acting until (i) the rights of all parties shall have been fully and finally
adjudicated by a court of competent jurisdiction or (ii) all differences shall
have been adjusted and all doubt resolved by agreement among all of the
interested persons and Agent shall have been notified thereof in writing
signed by all such persons. The rights of Agent under this paragraph are
cumulative of all other rights which it may have under law or otherwise.
Section 6.03. Rights, Exculpation, etc. Neither the Agent nor any
of its Affiliates, officers, directors, employees, agents, attorneys or
consultants shall be liable to any Instrument Holder for any action taken
or omitted by them hereunder or under any of the Transaction Documents,
or in connection herewith or therewith, except that (i) the Agent shall be
obligated on the terms set forth herein for performance of its express
obligations hereunder, and (ii) Agent shall be liable to the Instrument
Holders for damages caused by its gross negligence in the discharge of its
duties hereunder or its own willful misconduct. The Agent shall not be
responsible to any Instrument Holder for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectability, or sufficiency of this
Agreement, or any of the other Transaction Documents, or any of the
transactions contemplated hereby and thereby, or for the financial
condition of Lessee. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Transaction
Documents or the financial condition of Lessee, or the existence or
possible existence of any Incipient Default or Event of Default.
Section 6.04. Reliance. The Agent shall be entitled to rely upon
any written notices, statements, certificates, orders or other documents or
any telephone message believed by it in good faith to be genuine and
correct and to have been signed, sent or made by the proper Person, and
with respect to all matters pertaining to this Agreement or any of the
Transaction Documents and its duties hereunder or thereunder, upon
advice of legal counsel, independent public accountants and other experts
selected by it. Lessee and Trustee shall be entitled to rely upon any
written notices, requests, waivers, consents, receipts, authorizations,
powers of attorney, statements, certificates, orders, approvals, directions,
or other documents or matters issued by or from Agent and shall be
entitled to give notices to, make requests of and otherwise deal solely with
Agent, as administrative agent for the Holders, the Purchasers and the
Trustee, as the case may be, except as expressly provided herein.
Section 6.05. Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Lessee in accordance with the express
terms of the Transaction Documents, or Lessee fails upon demand by the
Agent to perform its obligations to reimburse or indemnify the Agent, the
Instrument Holders will reimburse and indemnify the Agent for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent or in any way relating to or arising out of this
Agreement or any of the other Transaction Documents or any action taken
or omitted by the Agent under this Agreement or any of the other
Transaction Documents, in proportion to their respective proportions of
the principal amount of Notes and outstanding amounts of Certificates;
provided that no Instrument Holder shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. The obligations of the Instrument
Holders under this Section shall survive the discharge in full of the
Instruments. If the Agent is or becomes a Instrument Holder, the Agent
shall have and may exercise the same rights and powers hereunder and is
subject to the same obligations and liabilities as and to the extent set forth
herein for any other Instrument Holder. The terms "Instrument Holder"
or "Majority Holder" or any similar terms shall, unless the context clearly
otherwise indicates, include the Agent in its individual capacity as a
Instrument Holder or one of the Majority Holders. The Agent and its
Affiliates may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or other business with Lessee as if it were
not acting as Agent pursuant hereto.
Section 6.06. Successor Agent; Resignation of Agent.
(a) The Majority Holders may, at any time by written
notice to Lessee, Trustee, and the Agent then serving, designate a
successor Agent, with or without cause; provided, however, that so long
as CLI has an outstanding Commitment hereunder, the Agent shall not be
removed, except for cause, without the approval of CLI. For this
purpose, "cause" shall mean the gross neglect by Agent of its duties
hereunder. Any such successor Agent shall have all rights, powers, and
duties assigned to the "Agent" hereunder from and after the effective date
of its appointment. Except in cases where the Agent is being replaced as
a result of a material default or dereliction of its duties by the existing
Agent, the effective date of the appointment of a successor Agent shall be
not less than thirty (30) days after the notice of appointment of the
successor Agent is given.
(b) The Agent may resign at any time upon written
notice given to the Lessee, the Trustee, and each Instrument Holder. The
effective date of the resignation shall be not less than sixty (60) days after
the notice of resignation is given. In the event of any such resignation by
Agent, the Majority Holders shall promptly appoint a successor agent and,
if no successor agent is so appointed within thirty (30) days thereafter the
Agent shall be (i) the Purchaser with the largest outstanding Commitment,
or (ii) if no Commitment remains outstanding hereunder, the Instrument
Holder that holds the largest aggregate amount of Instruments (measured
by dollar amount).
(c) In the event of the appointment of a successor Agent
(whether as a result of the resignation of the previous Agent or otherwise),
the outgoing Agent shall reasonably cooperate with the successor Agent,
the Trustee, the Purchasers, Lessee, and the Instrument Holders to
provide for a smooth transition of the function of the Agent hereunder.
Any books and records of the outgoing Agent relating to its service as
Agent hereunder (but not books and records relating to any Instruments
that the outgoing Agent may hold for its own account) shall be turned over
to the successor Agent.
Section 6.07. Authorization to Act as Agent of Trustee. In
addition, the Trustee hereby appoints and authorizes the Agent to collect,
disburse, invest and otherwise administer on the Trustee's behalf all funds
paid or payable to the Trustee hereunder or under any of the Transaction
Documents, in each case, in accordance with the terms hereof and thereof,
and the Trust Company, in its individual capacity, shall not be liable for
the actions or inactions of the Agent in connection with the Agent's
collection, disbursement, investment and administration of such funds. As
to any matters not expressly provided for by this Agreement or the other
Transaction Documents, the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain
from acting (and shall be fully protected in so acting or refraining from
acting) upon the instructions of the Majority Purchasers or the Majority
Holders, and such instructions shall be binding upon all Purchasers or
Holders, as applicable; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability
or which is contrary to this Agreement or applicable Law.
IN WITNESS WHEREOF, intending to be legally bound
hereby, the parties have caused this Agreement to be duly executed on the
attached Signature Pages by their respective officers thereunto duly
authorized as of the day and year first above written.
[SEE ATTACHED SIGNATURE PAGES]
SIGNATURE PAGE OF LESSEE AND LESSEE PARENT
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
LESSEE AND LESSEE
PARENT:
THE PEP BOYS - MANNY,
MOE & XXXX,
a Pennsylvania corporation
By:
Name:
Title:
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
TRUSTEE:
STATE STREET BANK AND
TRUST COMPANY,
a Massachusetts trust company
(not in its individual
capacity, but solely as Trustee)
By:
Name:
Title:
TRUST COMPANY:
STATE STREET BANK AND
TRUST COMPANY,
a Massachusetts trust company
(in its individual
capacity, but only as expressly
stated herein)
By:
Name:
Title:
SIGNATURE PAGE OF CLI,
AS AGENT, PURCHASER AND INSTRUMENT HOLDER
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
AGENT, PURCHASER and
INSTRUMENT HOLDER:
CITICORP LEASING, INC.,
a Delaware corporation
By:
Name:
Title:
SIGNATURE PAGE OF BANK OF MONTREAL,
AS PURCHASER AND INSTRUMENT HOLDER
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
PURCHASER and
INSTRUMENT HOLDER:
BANK OF MONTREAL
By:
Name:
Title:
SCHEDULE 1
Certain Definitions
As used herein, the following terms have the meanings indicated:
"A-Note" means any of, and "A-Notes" means all of, the Series
A Trust Notes, due on the Maturity Date issued and, unless otherwise
specified or the context otherwise requires, outstanding under the
Declaration of Trust.
"Acquisition Price" shall have the meaning provided therefor in
Exhibit A attached to the Lease.
"Advance" and "Advances" shall have the meaning provided
therefor in Section 1.01(c).
"Affiliate" means a Person directly or indirectly, through one or
more intermediaries, controlling, controlled by, or under common control
with the Person in question. The term "control," as used in the
immediately preceding sentence, means, with respect to a Person that is
a corporation, the right to exercise, directly or indirectly, more than ten
percent (10%) of the voting rights attributable to the shares of the
controlled corporation and, with respect to a Person that is not a
corporation, the possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of the controlled
Person.
"Agent" means the administrative agent for the Instrument Holders
and Purchasers appointed from time to time under this Agreement. CLI
is the initial Agent appointed under this Agreement.
"Agreement" means this Transaction Agreement, as it may be
amended, modified, supplemented, renewed, extended, and/or restated,
from time to time, it being acknowledged and agreed that the parties may
elect, by mutual agreement, to amend this Agreement to increase the
amount of Advances available to Trustee hereunder, but expressly
acknowledging that Purchasers have not agreed, and have no obligation
whatsoever to do so under any circumstances.
"Applicable Rate" shall have the meaning provided therefor in the
Lease.
"Approved Purposes" means (i) the purchase price paid by
Trustee from time to time to acquire portions of the Property, (ii) amounts
advanced from time to time by Trustee to Lessee in respect of
Construction Advances (including, without limitation, Interim Advances)
under the Lease, and (iii) reasonable costs and expenses incurred in
connection with the purchase of the Property and/or the closing of the
transactions contemplated hereby from time to time, all as properly
substantiated to, and approved by, Agent.
"B-Note" means any of, and "B-Notes" means all of, the Series B
Trust Notes, due on the Maturity Date, issued and, unless otherwise
specified or the context otherwise requires, outstanding under the
Declaration of Trust.
"Bankruptcy Code" means Title 11 of the United States Code, as
amended from time to time.
"Break Costs" shall mean an amount equal to the amount (if any)
required to compensate any Instrument Holder for any additional losses
(including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or
reemployment of deposits or funds acquired by such Instrument Holder to
fund or maintain any Instrument) it may reasonably incur as a result of the
payment of the principal balance of a Note or the stated amount of a
Certificate, as applicable, on any date other than a Payment Date.
"Business Day" means every day on which banks in the Cities of
New York, New York, Chicago, Illinois, Boston, Massachusetts, and
Philadelphia, Pennsylvania, are open for business and are not required to
be closed.
"Certificate" means any of, and "Certificates" means all of, the
Series C Trust Certificates, due on the date of the expiration or
termination (for any reason) of the Lease, issued, and unless otherwise
specified or the context otherwise requires, outstanding under the
Declaration of Trust.
"Certificate Holder" means any of, and "Certificate Holders"
means all of, the Holders from time to time of the Certificates.
"Certificate Rate" means, with respect to each Certificate or an
applicable portion thereof and with respect to each day during an Interest
Period, a rate per annum determined for such day equal to the LIBO Rate,
plus the Spread applicable to such Certificate or portion thereof.
"Commitment" means, with respect to a Purchaser, the amount of
such Purchaser's commitment to make Advances pursuant to Section 1.01
of this Agreement. In the case of the original Purchasers the amount of
their respective Commitments is specified in subsections 1.01(a) and (b)
hereof; in the case of any subsequent Purchaser(s) the amount of its
Commitment shall be specified as provided for in subsections 1.01(f) and
(g) hereof.
"Construction Advance" and "Construction Advances" shall have
the meanings provided therefor in Section 1.01(d) hereof.
"Construction Supplement" and "Construction Supplements"
shall have the meanings provided therefor in Section 1.01(d) hereof.
"Debt Rating" means, as of any date, the then current rating
issued by Standard & Poor's Corporation for Lessee's senior unsecured
debt, or if Lessee then has no senior unsecured debt rated by Standard &
Poor's Corporation, such other rating (including, without limitation, a
rating issued by another rating service if any such rating is then available
or a rating determined by the internal analysts of Agent or an Affiliate of
Agent) as Agent may deem most closely corresponds thereto.
"Debtor Relief Laws" means the Bankruptcy Code and all other
applicable liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization, suspension of
payments, or similar debtor relief Laws from time to time in effect
affecting the Rights of creditors generally.
"Declaration" or "Declaration of Trust" means that certain
Declaration of Trust of even date herewith executed by Trustee with
respect to the Property and the Transactions contemplated hereby, as
amended, restated, supplemented, or otherwise modified from time to
time.
"Default Rate" means the lesser rate per annum of (i) two percent
(2%) in excess of the effective prime interest rate quoted by Citibank,
N.A., from time to time in effect as its base or reference rate for short-
term floating rate commercial loans (whether or not such rate is actually
charged in any particular instance), or (ii) the Maximum Rate.
"Environmental Indemnity Agreement" means collectively that
certain Environmental Indemnity Agreement of even date herewith
executed by Lessee (and the other lessees under the Lease) for the benefit
of Trustee, Agent and the Instrument Holders, as amended, restated,
supplemented, or otherwise modified from time to time.
"Event of Default" has the meaning given thereto in the Lease.
"Fee Letter" means that certain letter dated January 10, 1997,
from Trust Company to Lessee describing certain costs and charges to be
paid to Trust Company in connection herewith.
"Hold Position" has the meaning provided therefor in Section
1.01(a) hereof.
"Holder" has the same meaning as "Instrument Holder."
"Improvements" has the meaning provided therefor in the
Preliminary Statement hereof.
"Increased Costs" means any additional amounts required to be
paid to any Instrument Holder to compensate such Instrument Holder for
any increased costs of maintaining the Instrument (the effect of which is
not included in the applicable Instrument Holder's determination of such
costs at the more recent to occur of the original issuance of such
Instrument or the adjustment of the Note Rate or Certificate Rate
applicable to such Instrument or applicable interest therein in connection
with the Secondary Transaction (as defined in the Lease) as a result of the
implementation after the date hereof of any applicable Law regarding
capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Instrument Holder (or any
lending office thereof) with any request or directive regarding capital
adequacy (whether or not having the force of Law) of any such authority,
central bank or comparable agency which has the effect of increasing the
amount of capital required or expected to be maintained as a result of its
maintaining the Instrument.
"Instrument" means any of, and "Instruments" means all of,
collectively, the Notes and the Certificates.
"Interim Advance" and "Interim Advances" shall have the
meanings provided therefor in Section 1.01(d) hereof.
"Interim Supplement" and "Interim Supplements" shall have the
meanings provided therefor in Section 1.01(d) hereof.
"Instrument Holder" or "holder" when used with respect to any
Instrument(s), means the Person whose name appears on the Register as
the registered owner of such Instrument(s) or the registered assigns of a
portion of an Instrument, as applicable. It is acknowledged that each
Purchaser shall be an Instrument Holder for all purposes hereof (until such
time as it has disposed of all of its Instruments) and entitled to the benefit
of all provisions hereof respecting the Instrument Holders, in addition to
and not in lieu of, its rights as the Purchaser hereunder.
"Interest Period" means, as applicable to an Instrument, (i) the
period commencing on the date of the first Advance under such Instrument
through the day immediately preceding the first Payment Date, or (ii) the
period commencing on any Payment Date through the day immediately
preceding the next Payment Date.
"Law" or "Laws" means, either singularly or collectively, as
applicable, all applicable statutes, laws, ordinances, regulations, orders,
writs, injunctions, decisions, opinions or decrees of any governmental
authority or any Tribunal.
"Lease" means, collectively, that certain Master Lease of even date
herewith, executed by Trustee, as lessor, and Lessee, as lessee, covering
portions of the Property, together with such supplements or amendments
thereto as may be executed from time to time by Lessee (or any
Additional Lessees) and Trustee and approved by Agent, including,
without limitation, supplements thereto adding Parcels to the Property or
"Additional Lessees" as a party to the Lease.
"Lease Guarantee" means that certain Lease Guarantee of even
date herewith executed by Lease Guarantor with respect to the Lease, as
amended, restated, supplemented, or otherwise modified from time to
time.
"Lease Guarantor" means The Pep Boys - Manny, Moe & Xxxx,
a Pennsylvania corporation.
"Lessee" means The Pep Boys - Manny, Moe & Xxxx, a
Pennsylvania corporation, its permitted successors and assigns. For
purposes of this Agreement any other Person that is a party to the Lease
shall not be treated as "Lessee" unless the context otherwise requires.
"Lessee's Equipment" shall have the meaning given to such term
in the Lease.
"LIBO Business Day" means a day of the year on which dealings
are carried on in the London interbank market and banks are open for
business in London and not required or authorized to close in New York
City.
"LIBO Rate" for each Interest Period means an interest rate per
annum equal to the average (rounded, if necessary, to the next highest
1/16 of 1%) of the rates of interest per annum at which deposits in United
States dollars are offered to prime banks in the London interbank market
at 11:00 a.m. (London time) two LIBO Business Days before the first day
of such Interest Period (the "LIBO Rate Setting Date") for a period equal
to such Interest Period.
"LIBO Rate Reserve Percentage" for any Interest Period means
the reserve percentage applicable to the Instrument Holders during such
Interest Period under the regulations issued from time to time by the
Board of Governors of the Federal Reserve System (or if more than one
such percentage is so applicable, the daily average for such percentages
for those days in such Interest Period during which any such percentages
shall be so applicable) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental to other
marginal reserve requirement) for Instrument Holders in respect of
liabilities or assets consisting of or including Eurocurrency Liabilities (as
defined in Regulation D of the Board of Governors of Federal Reserve
System as in effect from time to time) having a term equal to such Interest
Period.
"Lien" means any lien, mortgage, security interest, pledge, charge,
easement or encumbrance (excluding any transfer, assignment, or sublease
permitted under Section 17 of the Lease, or any lien on Lessee's
Equipment) of any kind, including, without limitation, a mechanic's lien,
a materialman's lien, the rights of a vendor, lessor, or similar party under
any conditional sales agreement or other title retention agreement or lease
substantially equivalent thereto, any production payment, and any other
right of or arrangement with any creditor to have his claim satisfied out
of any property or assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
"Litigation" means any proceeding, claim, and/or lawsuit
conducted by or before any Tribunal.
"Majority Holders" means: (i) with respect to any series of
Instruments, the registered Holders of at least sixty-six and two-thirds
percent (66-2/3%) in aggregate principal or stated amount of such series
of Instruments then outstanding; and (ii) with respect to more than one
series of Instruments, the registered Holders of at least sixty-six and two-
thirds percent (66-2/3%) of the total aggregate principal and stated
amounts of such series of Instruments then outstanding.
"Majority Purchasers" means the Purchaser(s) whose aggregate
outstanding Commitment at any relevant time is at least sixty-six and two-
thirds percent (66-2/3%) of the aggregate outstanding Commitments of all
Purchasers.
"Master Schedule" shall have the meaning provided therefor in the
Declaration of Trust.
"Maturity Date" shall mean August 31, 2003.
"Maximum Rate" means the maximum nonusurious interest rate,
if any, that at any time or from time to time may be contracted for, taken,
reserved, charged or received on any Note, Certificate, or other applicable
obligation, as the case may be, under the Law of the State of
Pennsylvania, or, if Pennsylvania Law is pre-empted thereby, the Law of
the United States of America applicable to the Holders and the
Transactions that would permit Holders to lawfully contract for, charge,
take, reserve or receive a greater amount of interest than that permitted
under Pennsylvania Law.
"New Improvements" shall have the meaning provided therefor in
the Lease.
"Note" means any of, and "Notes" means all of, collectively, the
A-Notes and the B-Notes outstanding under the Declaration of Trust.
"Note Rate" means, with respect to each Note or an applicable
portion thereof and with respect to each day during an Interest Period, a
rate per annum determined for such day equal to the LIBO Rate, plus the
Spread applicable to such Note or portion thereof.
"Noteholders" means, in the aggregate, the Holders at the time in
question of all of the Notes then outstanding (or, if applicable, the series
of Notes in question).
"Outside Funding Date" has the meaning provided therefor in
Section 1.05(e) hereof.
"Parcels" means any tracts or parcels of real property that may
hereafter be added to the Property, together with any and all structures,
buildings, fixtures, or other improvements from time to time located
thereon and any and all appurtenances thereto; provided, that such term
does not include Lessee's Equipment or any other trade fixtures,
inventory, or other items of personal property located on such parcels that
are owned by any other Person other than Trustee. Nothing in the
foregoing definition or applicable provisions of this Agreement shall be
deemed to limit or restrict Lessee's rights to demolish improvements
located on Parcels at the time such Parcel is added to the Property in
connection with the construction of New Improvements on the Parcel, to
the extent permitted by the express terms of the Lease.
"Payment Date" means the first day of each calendar month to and
including the month in which the Maturity Date falls, as well as the
Maturity Date itself; provided, however, that if such Payment Date is not
a Business Day, such Payment Date shall be the next succeeding Business
Day.
"Pep Boys I Facility" means that certain asset defeasance lease
facility created pursuant to that certain Transaction Agreement dated
November 13, 1995, by and among Lessee, Trustee and CLI, that certain
Declaration of Trust dated November 13, 1995, executed by Trustee, and
that certain Master Lease dated November 13, 1995, by and between
Trustee and Lessee.
"Percentage" means, relative to any Purchaser and any series of
Instruments, the percentage equal to the ratio of such Purchaser's
Commitment in respect of that series of Instruments to the total
Commitments of all Purchasers in respect of that series of Instruments.
"Permitted Encumbrances" shall have the meaning provided
therefor in the Lease.
"Person" means any individual, firm, corporation, association,
partnership, joint venture, other entity, or Tribunal.
"Plans" shall have the meaning provided therefor in the Lease.
"Property" shall have the meaning provided therefor in the Lease.
"Purchaser" means any Person having a Commitment hereunder.
"Reserve Costs" means, so long as Instrument Holders hereafter
shall be required under regulations of the Board of Governors of the
Federal Reserve System to maintain reserves in excess of those maintained
at the more recent to occur of the original issuance of the applicable
Instrument or the adjustment of the Note Rate or Certificate Rate
applicable to such Instrument or the applicable interest therein in
connection with the Secondary Transaction with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional
amounts equal to the product of (1) the outstanding balance of the
Instruments, multiplied by (2) an interest rate per annum equal, at all
times during the period in which such reserves were assessed, to the
remainder obtained by subtracting (a) the LIBO Rate for such Interest
Period from (b) the rate obtained by dividing such LIBO Rate applicable
during such Interest Period by a percentage equal to 100% minus the
applicable LIBO Rate Reserve Percentage, payable on each Payment Date.
"Rights" means rights, remedies, powers, and privileges.
"Securities Act" means the Securities Act of 1933, as amended.
"Spread" shall be either (A) in the case of the Certificates, 225
basis points, or (B) in the case of the A-Notes and the B-Notes, the
number of basis points determined by reference to the following chart,
based on the Debt Rating of Lessee as of the beginning of the applicable
Interest Period:
Lessee s Most Recent
Debt Rating Spread
BBB+ (or higher) 37.5 basis points (0.375%)
BBB 42.5 basis points (0.425%)
BBB- 52.5 basis points (0.525%)
less than BBB- 75.0 basis points (0.75%)
"Taxes" means all taxes, assessments, fees, levies, impositions,
duties, deductions, withholdings, or other charges of any nature
whatsoever from time to time or at any time imposed by any Laws or by
any Tribunal as well as any other item included within the term
"Impositions" under the Lease.
"Term" shall have the meaning provided therefor in the Lease.
"Title Company" means one or more title insurance companies
reasonably acceptable to Agent which shall issue the Title Policies.
"Title Policies" means, collectively, (A) one or more Owner s
Title Insurance Policies (collectively, the "Owner's Title Policy") issued
to Trustee by the Title Company, in the aggregate amount of the
Advances hereunder, insuring that Trustee owns fee simple title to the
Property, subject to no exceptions other than the Permitted Encumbrances,
and (B) one or more Mortgagee Title Insurance Policies (collectively, the
"Mortgagee Title Policy") issued to Agent (for the benefit of the
Noteholders) by the Title Company, in the aggregate amount of the Notes
issued hereunder, insuring that the Transaction Mortgage is a first
mortgage lien on fee simple title to the Property subject to no exceptions
other than the Permitted Encumbrances. Each of the Owners Title Policy
and the Mortgagee Title Policy shall provide such other coverages as
Agent may reasonably require and as may be available from time to time.
The parties acknowledge that the Title Policies will be a series of separate
policies in the aggregate required amount, with such separate policies
providing coverage in the amount of the respective Acquisition Prices (in
the case of the Owner's Title Policy) or the relevant Note amounts
attributable to the Parcels covered (in the case of the Mortgagee Title
Policy) of the respective Parcels of Property from time to time subject to
this Agreement. The term "Title Policy" shall include any endorsements
to previously issued title insurance policies that the Purchaser may deem
appropriate in connection with any Advance, and any endorsements that
Lessee may cause to be provided to insure over title problems that can not
be removed where Lessee is permitted to do so under the terms of the
Lease or this Agreement.
"Transaction Documents" means this Agreement, the Lease, the
Lease Guarantee, the Declaration of Trust, the Environmental Indemnity
Agreement, the Instruments and any and all other agreements, documents,
and instruments executed and delivered to or for the benefit of Trustee,
Purchasers, or Instrument Holders by pursuant to the terms of, or
otherwise in connection with, this Agreement, and any future amendments
hereto or restatements hereof, or pursuant to the terms of any of the other
Transaction Documents, together with any and all renewals, extensions,
and restatements of, and amendments and modifications to, any of the
foregoing.
"Transaction Mortgage" means one or more mortgages, deeds of
trust, deeds to secure debt, or similar security instruments executed by
Trustee and granting to Agent, for the benefit of the Noteholders (but not
the Certificate Holders), a first mortgage lien on the Property and each
Parcel thereof. The Transaction Mortgage shall, as to each Parcel, be in
form and substance acceptable to Agent and shall be subject to no liens or
encumbrances other than the Permitted Encumbrances.
"Transactions" means the transactions provided for in and
contemplated by this Agreement and the other Transaction Documents.
"Tribunal" means court, department, commission, board, bureau,
agency, or instrumentality of any governmental authority.
"Trust Estate" shall have the meaning provided therefor in the
Declaration of Trust.
SCHEDULE 2
Underwriting Guidelines
1. TITLE MATTERS.
1.1 The title insurance required by Agent and Trustee for any
Parcel shall be that which is customary in the jurisdiction in which the
Parcel is located for institutional investors and lenders in large commercial
transactions. Agent and Trustee shall be reasonable in negotiating and
agreeing to title insurance coverage.
1.2 Reinsurance or coinsurance will not be required if (1) the
amount to be insured for the Parcel, following completion of all
Improvements, is less than $ 4,000,000.00 and (2) one of the following
title insurance companies is the title insurer: Chicago Title Insurance
Corporation (or one of its wholly owned affiliates, such as TICOR or
Safeco), Commonwealth Land Title Insurance Corporation, First
American Title Insurance Corporation, Lawyers Title Insurance
Corporation, Old Republic/Minnesota or Xxxxxxx Title (any of the
foregoing being an "Acceptable Insurer"). Agent and/or Trustee shall
have the right to remove any title insurer from the above list at any time
hereafter with respect to closings on Parcels not then acquired, based on
its reasonable determination that such title insurer's financial rating has
been reduced to an unacceptably low level.
1.3 In the event that any mechanics' lien, suppliers' lien, or
similar lien is placed against any Parcel, Lessee shall have the right to
satisfy Agent and/or Trustee with respect to such lien by, among other
means, providing Agent and/or Trustee with affirmative title insurance
coverage over such lien delivered by an Acceptable Insurer which is
insuring the Parcel in question.
2. ENVIRONMENTAL REPORTS.
2.1 Each environmental report shall be addressed to Agent,
Trustee and Lessee, as follows:
"To Citicorp Leasing, Inc. ("Agent"), for
itself and in its capacity as Agent for the
Purchasers and Instrument Holders under the
Transaction Agreement dated __________,
1997, among Agent, Trustee (as defined
below), The Pep Boys - Manny, Moe and
Xxxx, a Pennsylvania corporation (the
"Transaction Agreement"), State Street
Bank and Trust Company, as Trustee under
the Declaration of Trust dated __________,
1997 ("Trustee") and [insert proper Pep
Boys entity]"
2.2 A reference in an environmental report to the existence of
asbestos, PCBs, lead paint or other hazards located within a building or
other structure that is intended to be demolished or substantially renovated
and improved, shall not be regarded as an impediment to going forward
with the transaction, or to the acquisition of the Parcel by the Trustee, or
the funding of any Advance, so long as (1) prior to the acquisition of the
Parcel in question, Lessee demonstrates to the reasonable satisfaction of
Agent and Trustee that the plans for the demolition and/or improvement
of the Parcel include provisions satisfactory to Agent and Trustee for the
removal, abatement and proper disposal of such materials, in accordance
with all applicable Laws, and (2) prior to the Construction Advance for
any such Parcel, Lessee provides Agent and Trustee with evidence of such
removal, abatement and disposal, and for payment therefor.
2.3 Nothing in the foregoing shall require Agent or Trustee to
accept a Parcel with respect to which the environmental report shows
evidence of underground or soil hazards, such as underground tanks, soil
or groundwater contamination or other problems requiring remediation.
3. SURVEY.
3.1 The survey shall, at a minimum, satisfy the following
requirements unless otherwise approved by Agent:
3.1.1 The surveyor should perform all necessary field
work, field-stake the property, and supply a current plat of survey
(the "Survey") of the property.
3.1.2 Without limitation of other applicable requirements,
the Survey must:
(i) Set forth an accurate metes and bounds
description of the land, as well as a lot/block description if
the property is platted;
(ii) Locate all existing easements (setting forth
recording information with respect to recorded easements
and locating recorded easements per the legal description
contained therein), alleys, streets, and roads;
(iii) Show any encroachments on to the land from
any adjacent property, any encroachments from the land on
to adjacent property, and any encroachments into any
easement or restricted area within the boundaries of the
land;
(iv) Locate all existing improvements (such as
buildings, power lines, fences, and the like);
(v) Locate all dedicated public streets or other
roadways providing access to the land, including all curb
cuts;
(vi) Locate all governmental or privately required
setback lines and similar restrictions affecting the land or
any part thereof and any violations of such restrictions; and
(vii) Set forth the gross square foot area of the
land, together with the net square foot area of the land
which shall be the gross square foot area of the land less
any area of the land located within (A) streets or roadways,
or (B) encroachments, overlaps, or strips, gores or other
areas affected by discrepancies in legal descriptions.
3.2 The Survey should contain a certification with regard to the
matters set forth thereon substantially as follows:
"The undersigned Registered Public
Surveyor (the "Surveyor") hereby certifies
that (a) this plat of survey and the property
description set forth hereon are true and
correct and prepared from an actual on-the-
ground survey of the real property (the
"Property") shown hereon; (b) such survey
was conducted by the Surveyor, or under his
supervision; (c) all monuments shown
hereon actually exist, and the location, size
and type of material thereof are correctly
shown; (d) except as shown hereon, there
are no encroachments onto the Property or
protrusions therefrom, there are no
improvements on the Property, there are no
visible easements or rights-of-way of the
Property and there are no visible
discrepancies, conflicts, shortages in area or
boundary line conflicts; (e) the size, location
and type of improvements are as shown
hereon (including, without limitation, the
parking lots and other parking areas
indicating the number of parking spaces
within each), and, except as shown hereon,
all are located within the boundaries of the
Property and set back from the Property
lines the distances indicated; (f) the distance
from the nearest intersecting street or road
is as shown; (g) the Property has access to
and from a public roadway; (h) except as
shown hereon all recorded easements have
been correctly platted hereon; (i) the
boundaries, dimensions and other details
shown hereon are true and correct; and (j)
except as shown hereon the Property is not
located in a 100-Year Flood Plain or in an
identified "flood prone area", as defined by
the U. S. Department of Housing and Urban
Development, pursuant to the Flood Disaster
Protection Act of 1973, as amended.
"The undersigned does further certify that
the survey was made in accordance with the
"Minimum Standard Detail Requirements of
the ALTA/ACSM Land Title Surveys,
jointly established by ALTA and ACSM in
1992, and includes items 1, 2, 3, 4, 6, 7(a),
8, 9, 10, and 13 of Table A thereof, and is
prepared to the ALTA/ACSM accuracy
standards (as adopted and in effect on the
date of this certification) of an Urban
Survey.
"The Surveyor expressly understands and
agrees that (a)
("Title Company"), Citicorp Leasing, Inc.
("Agent"), for itself and in its capacity as
Agent for the Purchasers and Instrument
Holders under the Transaction Agreement
dated ___________, 1997, among Agent,
Trustee (as defined below), The Pep Boys -
Manny, Moe and Xxxx, a Pennsylvania
corporation (the "Transaction Agreement"),
State Street Bank and Trust Company, as
Trustee under the Declaration of Trust dated
_________, 1997 ("Trustee"), and [insert
proper Pep Boys entity] are entitled to rely
on this plat of survey as being true and
accurate in all respects and this Certificate
as being true and accurate; and (b) the
consideration paid to the Surveyor for the
preparation and certification of such survey
has been paid, in part, in anticipation of
such reliance hereon.
EXECUTED this ____ day of
_____________, 19__.
By:
Registered Public Surveyor No.
Address:
[S E A L]"
3.3 Specific matters reflected on a survey meeting the standards
set forth above shall be subject to Agent's reasonable review and
approval, such review and approval to be exercised in light of the effect
of the specific matters in question on the value (to the extent that the
appraisal of the Parcel in question does not specifically reflect the effect
on value of the matter in question), utility, and marketability of the Parcel
in question.
4. APPRAISAL.
4.1 The Appraisal shall be addressed as set forth for the
environmental report described above in paragraph 2.1
4.2 The appraiser shall be satisfactory if he/she is an MAI
appraiser with at least five years of experience in appraising similar
properties to the Parcel in the geographic area of the Parcel.
EXHIBIT "A"
Form of Assignment Agreement
Dated ,
Reference is made to the Transaction Agreement, dated as of
____________, 1997 (as the same may hereafter be amended or otherwise
modified from time to time, the "Transaction Agreement"), by and among
THE PEP BOYS - MANNY, MOE & XXXX, a Pennsylvania corporation
("Lessee"), CITICORP LEASING, INC., a Delaware corporation (as
Agent, Purchaser and Instrument Holder), BANK OF MONTREAL, as
Purchaser and Instrument Holder, and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company ("Trustee"), pursuant
to the Declaration of Trust ("Declaration of Trust") of even date with the
Transaction Agreement executed by Trustee.
________________________ , a ____________________
("Assignor") is the Holder of certain Instruments issued by the Trustee
under the Trust Declaration and desires to assign such Instruments to
____________________________, a _________________________
("Assignee"). Certain terms defined in the Transaction Agreement are
used herein with the same meaning.
The Assignor and Assignee agree as follows:
(a) The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, without recourse to the Assignor, the Instruments listed on
Schedule 1 attached hereto (the "Assigned Instruments"), together with
all of Assignor's rights as an Instrument Holder under the Transaction
Agreement and the Transaction Documents as of the Effective Date (as
defined below) with respect to Assigned Instruments (the Assigned
Instruments, plus all of Assignor's rights with respect thereto being
referred to as the "Assigned Interest"). The effective date of this sale and
assignment shall be the date specified on Schedule 1 hereto (the "Effective
Date"). [IF LESS THAN WHOLE INSTRUMENT IS TO BE
ASSIGNED, MODIFY ACCORDINGLY].
(b) It is expressly acknowledged that Assignor does not hereby
assign to Assignee, and Assignee does not hereby assume from Assignor,
any of Assignor's obligations as a "Purchaser" under the Transaction
Documents to purchase additional Instruments thereunder in connection
with any Advance. [DELETE IF THE ASSIGNOR IS NOT A
PURCHASER UNDER THE TRANSACTION AGREEMENT.]
(c) On the Effective Date, the Assignee will pay to the
Assignor, in same day funds, at such address and account as the Assignor
shall advise the Assignee, the sum of $___________. From and after the
Effective Date, the Assignor agrees that the Assignee shall be entitled to
all rights, powers and privileges of the Assignor under the Transaction
Agreement, the Transaction Documents and the Instruments to the extent
of the Assigned Interest, including without limitation (i) the right to
receive all payments in respect of the Assigned Interest for the period
from and after the Effective Date, whether on account of principal or
stated amount, interest or current yield, fees, indemnities in respect of
claims arising after the Effective Date, Increased Costs, Break Costs, or
otherwise; (ii) the right to vote and to instruct the Agent and/or the
Trustee under the Transaction Documents based on the Assigned Interest;
and (iii) the right to receive notices, requests, demands and other
communications. The Assignor agrees that it will promptly remit to the
Assignee any amount received by it in respect of the Assigned Interest
(whether from the Lessee, the Trustee, the Agent, or otherwise) in the
same funds in which such amount is received by the Assignor.
(d) The Assignor (i) represents and warrants that it is the legal
and beneficial owner of the Assigned Interest and that such interest is free
and clear of any adverse claim; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties
or representations made in or in connection with the Transaction
Agreement, the Instruments or the Transaction Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Transaction Agreement, the Instruments, the Transaction
Documents or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Lessee or the
performance or observance by the Lessee of any of its obligations under
the Transaction Agreement, the Instruments, the Transaction Documents
or any other instrument or document furnished pursuant thereto.
(e) Assignor hereby authorizes and requests that Trustee issue
New Notes or New Certificates, as applicable, pursuant to Section 3.08
of the Declaration of Trust, in the name of Assignee (but at the expense
of Assignee) to replace the Assigned Instruments endorsed herewith in
accordance with the terms of the Declaration of Trust. Further, if the
Assigned Interest represents less than all of the indebtedness or equity
evidenced by the Instrument in question, Assignor also hereby requests
that Trustee issue to Assignor a New Note or New Certificate, as
applicable, in the amount of $ , representing the portion of the
Instrument not assigned herein by Assignor.
(f) The Assignee (i) acknowledges that it has received a copy
of the Transaction Agreement, together with such financial information or
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment; (ii) agrees
that it will, independently and without reliance upon the Trustee, the
Assignor or any other Instrument Holder and based on such documents
and information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under the
Transaction Agreement, the Instruments and the other Transaction
Documents; (iii) assumes and agrees to perform in accordance with their
terms all of the obligations which by the terms of the Transaction
Agreement, the Instruments and the other Transaction Documents are
required to be performed by an Instrument Holder and which arise
subsequent to the date hereof; (iv) specifies as its administrative offices
(and address for notices) the offices set forth beneath its name on the
signature pages hereof; (v) represents and warrants to Lessee, Trustee and
Agent that the representations and warranties applicable to a "Holder"
pursuant to Section 2.03 of the Transaction Agreement are true and
correct as to the Assignee as of the date hereof; and (vi) attaches the
forms prescribed by the Internal Revenue Service of the United States of
America certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Transaction Agreement
(and the other Transaction Documents) or such other documents as are
necessary to indicate that all such payments are subject to such rates at a
rate reduced by an applicable tax treaty. Further, Assignee acknowledges
that it is not relying upon any statements of Lessee regarding its financial
condition or that of any of its subsidiaries except to the extent of financial
reports and related information provided by Lessee to Agent pursuant to
the Transaction Documents or in connection with the negotiation and
execution thereof.
(g) Following the execution of this Assignment, it will be
delivered to the Agent for acceptance and recording by the Agent in the
Register. Upon such acceptance and recording and receipt of any consent
of the Lessee required pursuant to the Transaction Documents, as of the
Effective Date, (i) the Assignee shall be a party to the Transaction
Agreement and, to the extent provided in this Transaction Assignment,
have the rights and obligations of an Instrument Holder thereunder and
under the Instruments and the Transaction Documents and (ii) the
Assignor shall, to the extent provided in this Assignment, relinquish its
rights and be released from its obligations under the Transaction
Agreement, the Instruments and the Transaction Documents. Nothing
herein shall release Assignor from any remaining obligations that Assignor
may have as a Purchaser (if Assignor is a Purchaser) under the
Transaction Documents, nor shall this Assignment release Assignor from,
nor reduce Assignor's rights with respect to or relating to, any other
Instruments that Assignor may continue to hold or may hereafter acquire.
(h) Upon such acceptance, recording and consent, from and
after the Effective Date, Trustee shall make all payments under the
Transaction Documents in respect of the Assigned Interest (including,
without limitation, all payments of principal, interest or current yield) to
the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Transaction Documents for periods
prior to the Effective Date directly between themselves.
(i) By its execution hereof Assignee acknowledges that Citicorp
Leasing, Inc. is the currently appointed "Agent" for the Instrument
Holders and Purchasers under the terms of the Transaction Documents,
and that Assignee is acquiring the Instruments subject to the rights (and,
where applicable) the obligations of the Agent or any successor Agent that
may hereafter be appointed pursuant to the Transaction Agreement.
(j) This Assignment shall be governed by, and construed in
accordance with, the laws of the State of Massachusetts.
IN WITNESS WHEREOF, intending to be legally bound hereby,
the parties hereto have caused this Assignment to be executed by their
respective officers thereunto duly authorized on the attached Signature
Pages, as of the date first above written.
[See Attached Signature Pages] SIGNATURE PAGE OF ASSIGNOR
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Assignor"
a
By:
Name:
Title:
SIGNATURE PAGE OF ASSIGNEE
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Assignee"
a
By:
Name:
Title:
Address of Assignee:
Schedule 1
to
Assignment Agreement
Effective Date ___________, 19___
[DESCRIBE THE NOTES/CERTIFICATES TO BE ASSIGNED
BY DATE, CERTIFICATE OR NOTE NUMBER, FACE
AMOUNT, ETC.]
ACKNOWLEDGMENT OF ASSIGNMENT
BY
TRUSTEE AND AGENT
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Trustee"
STATE STREET BANK
AND TRUST
COMPANY, a Massachusetts trust company,
(not in its individual capacity,
but solely as Trustee)
By:
Name:
Title:
"Agent"
CITICORP LEASING, INC.,
a
Delaware corporation
By:
Name:
Title:
TRANSACTION AGREEMENT
Dated as of February 28, 1997
Among
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation,
STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company,
not in its individual capacity except as expressly stated herein, but
solely as Trustee,
and
CITICORP LEASING, INC.,
a Delaware corporation,
as Administrative Agent, Purchaser, and Holder,
and
BANK OF MONTREAL,
as Purchaser and Holder
