TRANSACTION AGREEMENT
This TRANSACTION AGREEMENT dated as of November 13, 1995 (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"); CITICORP LEASING, INC., a Delaware corporation
("CLI"), on behalf of itself as the initial "Purchaser" and initial "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, as the initial Purchaser of the Instruments, (i) a Series A Trust Note
(the "A-Note") in the stated principal amount of up to $21,000,000.00 (such
amount being referred to as the "A-Note Commitment"), (ii) a Series B Trust Note
(the "B-Note") in the stated principal amount of up to $3,000,000.00 (such
amount being referred to as the "B-Note Commitment"), and (iii) a Series C
Certificate (the "Certificate") in the stated amount of up to $1,000,000.00
(such amount being referred to as the "Certificate Commitment"). The original
A-Note issued to CLI, 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-Note issued to CLI,
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 Certificate 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 and
Agent.
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 the initial Purchaser of the Instruments, confirms that
its Certificate Commitment is $1,000,000.00, its A-Note Commitment is
$21,000,000.00, and its B-Note Commitment is $3,000,000.00, for a total
Commitment of $25,000,000.00. As of the date hereof, no Person other than CLI
is a "Purchaser" and no other Person has any Commitment hereunder.
(b) Advances under the Instruments representing the Commitment shall
be made by the Purchaser(s) 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 Purchaser(s) 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. If, at any time after the date hereof, there is more than one
Purchaser with respect to the A-Notes, B-Notes or Certificates, 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
Purchaser(s) 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.
(c) 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, and for other Approved Purposes. Upon the execution by Trustee
and Lessee, and the approval thereof by Agent, on behalf of Purchaser(s), 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
Purchaser(s), 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 Purchaser(s), shall approve,
a Construction Supplement to the Lease in substantially the form attached to the
Lease (each, a "Construction Supplement" and collectively, "Construction
Supplements").
(d) 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. 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 Purchaser(s) 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 Purchaser(s), subject to the terms and conditions
hereof.
(e) 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 Purchaser(s), 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 first 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, Purchaser, 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 Purchaser and/or their respective counsel and/or consultants
through the Closing Date as otherwise provided herein, or in the other
Transaction Documents, shall be paid in full. Trustee, Purchaser and their
respective counsel and consultants have agreed to defer payment of their various
fees and costs relating to the negotiation and execution of the Transaction
Documents as of the date of execution hereof, but such amounts shall be paid, or
provision for such payment shall have been made, by Lessee on or before the
earlier of December 15, 1995, or the Closing Date.
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, Purchaser 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
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) 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
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).
(d) The conditions set out in both subsections (a) and (b) shall
apply, subject to reasonably 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.
(e) To the extent applicable the underwriting guidelines listed on
attached Schedule 2 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.
(f) Anything to the contrary herein notwithstanding, from and after
December 31, 1996:
(A) 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
(B) 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 December 31,
1997. On December 31, 1997, any unused Commitment of the Purchasers shall be
cancelled 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) Structuring Fee. Upon execution of this Agreement Lessee shall
pay to CLI or an Affiliate of CLI a structuring fee in the amount of $125,000
cash (i.e. 0.50% of the Commitment). Lessee shall be entitled to a credit
against such structuring fee in the amount of $25,000 in respect of a proposal
fee in such amount previously paid to CLI or an Affiliate thereof.
(b) Arranging Fee. In connection with the Secondary Transaction
(as defined in Section 4.01 hereof), Lessee shall pay to CLI or an Affiliate of
CLI an arranging fee in an amount equal to 0.50% of the outstanding principal
amount (of the Notes) and outstanding amount (of the Certificates), which fee
shall be payable both with respect to portions of the Instruments transferred to
other financial institutions and to Instruments that may be held by CLI or an
Affiliate thereof. In addition, Lessee shall pay any placement fees or other
fees or similar amounts charged by any financial institutions (other than CLI
and its Affiliates) that purchase instruments in connection with the Secondary
Transaction (but not otherwise). If the Secondary Transaction occurs in a
series of placements over time, the arrangement fee for such placement shall be
paid periodically on the amount of Instruments placed by CLI as they are placed,
and the arrangement fee on the Instruments, if any, that CLI elects to hold
shall be paid at the end of the Secondary Transaction period (or such earlier
time as CLI notifies Lessee that CLI elects to hold the Instruments in
question).
(c) Servicing Fee. On each December 15 (starting December 15, 1996)
throughout the term of this Agreement, Lessee shall pay to CLI or an Affiliate
of CLI a servicing fee in an amount equal to the greater of (i) $25,000.00, or
(ii) 0.125% of the then aggregate outstanding principal balance of the Notes and
the aggregate outstanding amount of the Certificates.
(d) Commitment Fee. On each March 15, June 15, September 15, and
December 15 through and including December 15, 1997, Lessee shall pay to CLI 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) 20 basis points
BBB 25 basis points
BBB- 31.50 basis points
lower than BBB- 37.50 basis points
The first payment due on March 15, 1996, shall also include an additional
prorated payment covering the period from the date hereof through December 15,
1995, and the last payment due December 15, 1997, shall also include an
additional prorated payment for the period December 15, 1997 to December 31,
1997. In the event the December 31, 1997, date (which date currently represents
the last day on which any Advance may be made hereunder) 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 December 31, 1997,
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.
(e) 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, (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 paragraphs (d)(ii)
and (g)(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.
(f) 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.
(g) 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.
(h) 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.
(i) 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.
(j) 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 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
or 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 (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) 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; Secondary Transaction.
(a) 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 Highest Lawful 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.
(b) At such time as the Commitment of the Purchasers has been
terminated (pursuant to Section 1.05), has otherwise expired by its own terms,
or, if earlier, has been fully satisfied (in either case, the "Completion Date")
the Purchasers will attempt, in good faith, to assign the Instruments
theretofore issued to such Purchasers, or interests or participations in such
Instruments, to other financial institutions, in minimum increments of
$5,000,000.00, such transaction being herein referred to as the "Secondary
Transaction". Purchasers and Lessee shall cooperate for a period of ninety (90)
days after the Completion Date to arrange for the sale and assignment of
Instruments by Purchasers to entities designated by, or approved by, Lessee;
provided, that any proposed assignee designated by Lessee must be a financial
institution having (or be an Affiliate of an institution having) a combined
capital and surplus (net worth) of at least $100,000,000.00 based on its latest
financial statements, must be eligible to purchase the Instruments (or interests
therein) in question without causing a violation or, or triggering a
registration requirement under, the Securities Act or applicable state or
federal securities laws, or a violation of ERISA or other applicable laws, and
otherwise must be an entity with which CLI is not precluded from dealing under
the policies and procedures then in effect at CLI and its Affiliates (any such
entity being referred to herein as an "Approved Instrument Holder"). After such
ninety (90) day period Purchasers shall be free to complete the Secondary
Transaction by placing the Instruments with financial institutions designated by
Purchasers.
(c) If, at the time of any transfer of an instrument or an interest
or participation therein in connection with the Secondary Transaction, the
number of basis points over the LIBO Rate required by the transferee of an
Instrument or interest therein (the "Required Spread") is different from the
Spread then used to calculate the applicable Note Rate or Certificate Rate on
such Instrument (which Required Spread shall be based on then applicable market
conditions), the Spread applicable to the Instrument or interest therein so
transferred (and to any replacement Instrument issued to any such transferee)
shall be adjusted to the Required Spread, the Note Rate or Certificate Rate
applicable to such Instrument or interest therein, as the case may be, shall be
recalculated as and when the Spread is adjusted, and the Applicable Rate (used
to compute the Net Rent payable under the Lease) shall be adjusted accordingly,
as provided for in the Lease. Such adjustments shall be automatic and
effective without the necessity of any amendment to this Agreement or any other
Transaction Document. In connection with the Secondary Transaction the Agent
shall notify the Trustee and the Lessee from time to time of the adjustments in
the Spread and the corresponding adjustments in each Note Rate, each Certificate
Rate and the Applicable Rate. The Agent shall furnish to the Lessee and, upon
request, the Trustee copies of the Agent's computations of any such adjustment,
which computations shall be in reasonable detail. It is acknowledged that the
Spread for the different series of Instruments (and for Instruments within the
same series) may vary, thus resulting in varying Note Rates and/or Certificate
Rates with respect to Instruments (or interests therein) within the same series.
Once any Instrument (or a particular interest in an Instrument, if applicable)
has been transferred in the Secondary Transaction and the Note Rate or
Certificate Rate applicable thereto has been adjusted, the Note Rate or
Certificate Rate applicable to such Instrument (or interest therein, as
applicable) shall not thereafter be affected by adjustments of the Note Rate or
Certificate Rate applicable to other Instruments (or other interests in the same
Instrument, if applicable).
(d) On the date that is six (6) months after the Completion Date
(unless extended by mutual agreement of Lessee and the Purchasers), the Note
Rate or Certificate Rate, as applicable, for any Instruments or interests
therein that continue to be held by the original Purchasers thereof (whether as
a result of an affirmative election by such Purchasers to continue to hold such
Instruments or interests therein or as a result of a failure to place the
Instruments or interests therein in the Secondary Transaction) shall be
adjusted, if necessary, on a one-time basis to equal the highest Note Rate or
Certificate Rate, as applicable, applicable to any Instrument or interest
therein of the same series that was transferred by Purchasers to others in
the Secondary Transaction. Any transfers of Instruments or interests therein
that occur subsequent to such date shall not be deemed to be part of the
Secondary Transaction and the Note Rate or Certificate Rate applicable thereto
shall not be adjusted in connection with such transfer.
(e) Purchasers shall have a right, but not the obligation, to place
Instruments or interests therein with other financial institutions acceptable to
Lessee prior to the Completion Date (i.e., prior to the Secondary Transaction)
if Purchasers desire to do so. In such event the Note Rates or Certificate
Rates applicable to such Instruments or interests therein shall be adjusted in
the same manner as contemplated in subsection (c) above in respect of the
Secondary Transaction (and the rental payable under the Lease shall be
correspondingly adjusted). No such early placement of an Instrument or an
interest therein shall affect the interest rates or rates of return applicable
to other Instruments, or interests in the same Instrument, that continue to be
held by the Purchasers after such early placement, nor the rates applicable to
the portion of Instruments representing further Advances thereunder by the
Purchasers.
(f) Any assignment of Instruments or interests therein in the
Secondary Transaction shall be carried out in the same manner as an assignment
of Instruments as contemplated in Section 4.02 below, subject to the foregoing
provisions relating to the change of Note Rates or Certificate Rates, as
applicable.
(g) Subsequent to the Secondary Transaction any Instrument Holder
shall continue to have the right to assign its Instruments or interests therein
as provided for in Section 4.02 below. However, no such assignment after the
Secondary Transaction shall result in a change in the Note Rate or Certificate
Rate applicable to the Instrument in question.
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 except for
assignments that constitute a part of the Secondary Transaction.
(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)
in 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. If any Purchaser sells a
participation in an Instrument during the period provided for in Section 4.01
above, such participation shall be treated as having been part of the Secondary
Transaction and the Note Rate or Certificate Rate, as applicable, with respect
to the portion of the Instrument participated by such Purchaser shall be
adjusted in the same manner and to the same extent as if the portion of the
Instrument so participated had been assigned to the participant.
(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) Except for an assignment of an Instrument or an interest therein
by the original Purchaser thereof in connection with the Secondary Transaction,
no assignment (including, without limitation, any assignment that occurs during
the Secondary Transaction period but is not made by the original Purchaser of
the Instrument or interest therein in question) 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 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 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, PURCHASER 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
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
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,
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, other than
CLI, agrees that, subject to Section 4.02, it will use its best efforts to
maintain the confidentiality of the general structure of this transaction.
Further, 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. 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 5.22. 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 5.23. 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 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 (A) the rights of all parties shall have been fully
and finally adjudicated by a court of competent jurisdiction or (B) 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 without the approval of
CLI. 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 (A)
the Purchaser with the largest outstanding Commitment, or (B) 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 PARENT
ATTACHED TO
TRANSACTION AGREEMENT
AMONG
THE PEP BOYS - MANNY, MOE & XXXX, as LESSEE PARENT
STATE STREET BANK AND TRUST COMPANY, as TRUSTEE
AND
CITICORP LEASING, INC., as AGENT, INITIAL PURCHASER, and INITIAL HOLDER
LESSEE:
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation,
By:
Name:
Title:
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
TRANSACTION AGREEMENT
AMONG
THE PEP BOYS - MANNY, MOE & XXXX, as LESSEE PARENT
STATE STREET BANK AND TRUST COMPANY, as TRUSTEE
AND
CITICORP LEASING, INC., as AGENT, INITIAL PURCHASER, and INITIAL HOLDER
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 AGENT AND INITIAL PURCHASER
ATTACHED TO
TRANSACTION AGREEMENT
AMONG
THE PEP BOYS - MANNY, MOE & XXXX, as LESSEE PARENT
STATE STREET BANK AND TRUST COMPANY, as TRUSTEE
AND
CITICORP LEASING, INC., as AGENT, INITIAL PURCHASER, and INITIAL HOLDER
ADMINISTRATIVE AGENT,
INITIAL PURCHASER and INITIAL HOLDER:
CITICORP LEASING, INC.,
a Delaware corporation,
By:
Name:
Title:
J:\DOCS\PUBLIC\MORRISC\AGR\105543.9
citicorp\pep boys\ transaction agreement
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(b).
"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
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, 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 Purchaser the amount of the
Commitment is specified in subsection 1.01(a) hereof; in the case of any
subsequent Purchaser(s) the amount of its Commitment shall be specified
as provided for in subsections 1.01(d) and (e) hereof.
"Construction Advance" and "Construction Advances" shall have the
meanings provided therefor in Section 1.01(c) hereof.
"Construction Supplement" and "Construction Supplements" shall have
the meanings provided therefor in Section 1.01(c) hereof.
"Debt Rating" means, as of any Adjustment 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 July 18, 1995, from Trust
Company to Lessee describing certain costs and charges to be paid to Trust
Company in connection herewith.
"Holder" has the same meaning as "Instrument Holder."
"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.
"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 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 December 31, 2002.
"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).
"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 Borrower. 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.
"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.
"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.
"Secondary Transaction" means the transaction contemplated in Section
4.01 hereof, pursuant to which the Purchaser shall attempt to place the
Instruments or interest therein with other financial institutions, and
pursuant to which the Note Rates and Certificate Rate on the Instruments
are subject to adjustment based on then applicable market rates.
"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 Most Recent
Debt Rating Spread
BBB+ (or higher) 55 basis points (0.55%)
BBB 62.5 basis points (0.625%)
BBB- 75 basis points (0.75%)
less than BBB- 100 basis points (1.00%)
The "Spread" applicable to any Instrument or interest therein is subject
to adjustment in connection with the Secondary Transaction as provided in
Section 4.01 hereof.
"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 Owners 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 Policy will in fact 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 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 November 13, 1995, 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 November 13, 1995 ("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
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 November 13, 1995,
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 November 13, 1995 ("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 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.
Form of Assignment Agreement
Dated ,
Reference is made to the Transaction Agreement, dated as of
_________________, 1995, (as the same may hereafter be amended or otherwise
modified from time to time, being the "Transaction Agreement"), by and among
THE PEP BOYS - MANNY, MOE & XXXX, a Pennsylvania corporation ("Lessee"),
CITICORP LEASING, INC., a Delaware corporation (as Agent, and as the initial
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
TO
ASSIGNMENT AGREEMENT
[Pep Boys Leased Property]
"Assignor"
a
By:
Name:
Title:
SIGNATURE PAGE
OF
ASSIGNEE
TO
ASSIGNMENT AGREEMENT
[Pep Boys 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.]
ACKNOWLEDGEMENT OF ASSIGNMENT
BY
TRUSTEE AND AGENT
TO
ASSIGNMENT AGREEMENT
[Pep Boys 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 November 13, 1995
Among
THE PEP BOYS - MANNY, MOE & XXXX
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.
as Administrative Agent, Initial Purchaser, and Initial Holder
[Pep Boys 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 . . . . . . . . . . . . 4
Section 1.04. Conditions Precedent to All Advances . . . . . . . . . 4
Section 1.05. Advance Process. . . . . . . . . . . . . . . . . . . . 9
Section 1.06. Form of Documents. . . . . . . . . . . . . . . . . . . 10
Section 1.07. Transaction Fees . . . . . . . . . . . . . . . . . . . 10
Section 1.08. Extension of Lease Term. . . . . . . . . . . . . . . . 11
ARTICLE II. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 12
Section 2.01. Lessee's Representations and Warranties. . . . . . . . 12
Section 2.02. Trust Company Representations. . . . . . . . . . . . . 14
ARTICLE III. TRUSTEE AND TRUST COMPANY COVENANTS . . . . . . . . . . . . 17
Section 3.01. Lien Claims. . . . . . . . . . . . . . . . . . . . . . 17
Section 3.02. Inspection of Property . . . . . . . . . . . . . . . . 17
Section 3.03. Notice of Significant Matters. . . . . . . . . . . . . 17
Section 3.04. Qualification; Business; Use of Advances.. . . . . . . 18
Section 3.05. Encumbrances . . . . . . . . . . . . . . . . . . . . . 18
Section 3.06. Transaction Documents. . . . . . . . . . . . . . . . . 18
Section 3.07. Transactions with Affiliates . . . . . . . . . . . . . 19
Section 3.08. Transfer or Encumbrance of the Property. . . . . . . . 19
Section 3.09. Compliance with Laws and Documents . . . . . . . . . . 19
Section 3.10. Assignment . . . . . . . . . . . . . . . . . . . . . . 20
Section 3.11. Other Tenant Leases. . . . . . . . . . . . . . . . . . 20
Section 3.12. Agent's Approval of Settlements. . . . . . . . . . . . 20
Section 3.13. Notice of Actions; Prosecution . . . . . . . . . . . . 20
Section 3.14. Covenants of Trust Company . . . . . . . . . . . . . . 21
ARTICLE IV. THE NOTES AND THE CERTIFICATES. . . . . . . . . . . . . . . 22
Section 4.01. Rates Applicable to Instruments; Secondary Transaction 22
Section 4.02. Assignments and Participations . . . . . . . . . . . . 24
Section 4.03. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 4.04. Avoidance of Taxes, Other Charges and Increased Costs. 29
Section 4.05. Sharing of Payments, Etc . . . . . . . . . . . . . . . 30
Section 4.06. Instrument Holders' Credit Decisions . . . . . . . . . 30
ARTICLE V. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.01. Survival . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.02. Notices. . . . . . . . . . . . . . . . . . . . . . . . 31
Section 5.03. Severability . . . . . . . . . . . . . . . . . . . . . 33
Section 5.04. Amendments, Etc. . . . . . . . . . . . . . . . . . . . 33
Section 5.05. Headings . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.06. Definitions. . . . . . . . . . . . . . . . . . . . . . 33
Section 5.07. Benefit. . . . . . . . . . . . . . . . . . . . . . . . 33
Section 5.08. Place of Payment . . . . . . . . . . . . . . . . . . . 33
Section 5.09. Counterparts . . . . . . . . . . . . . . . . . . . . . 34
Section 5.10. Governing Law; Venue . . . . . . . . . . . . . . . . . 34
Section 5.11. Business Day . . . . . . . . . . . . . . . . . . . . . 34
Section 5.12. The Trustee. . . . . . . . . . . . . . . . . . . . . . 35
Section 5.13. Estoppel Certificates. . . . . . . . . . . . . . . . . 35
Section 5.14. Transaction Documents; Further Assurances. . . . . . . 35
Section 5.15. Confidentiality. . . . . . . . . . . . . . . . . . . . 36
Section 5.16. Interest . . . . . . . . . . . . . . . . . . . . . . . 36
Section 5.17. Money. . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 5.18. Number and Gender of Words . . . . . . . . . . . . . . 37
Section 5.19. Articles, Sections, Exhibits, and Schedules. . . . . . 37
Section 5.20. Decisions of Parties . . . . . . . . . . . . . . . . . 38
Section 5.21. Construction of Agreement. . . . . . . . . . . . . . . 38
Section 5.22. Brokers. . . . . . . . . . . . . . . . . . . . . . . . 38
Section 5.23. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 38
ARTICLE VI. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.01. Appointment. . . . . . . . . . . . . . . . . . . . . . 39
Section 6.02. Nature of Duties . . . . . . . . . . . . . . . . . . . 39
Section 6.03. Rights, Exculpation, etc.. . . . . . . . . . . . . . . 42
Section 6.04. Reliance . . . . . . . . . . . . . . . . . . . . . . . 42
Section 6.05. Indemnification. . . . . . . . . . . . . . . . . . . . 42
Section 6.06. Successor Agent; Resignation of Agent. . . . . . . . . 43
Section 6.07. Authorization to Act as Agent of Trustee . . . . . . . 43
FIRST AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys Transaction)
This First Amendment to Transaction Agreement (this "Amendment") is entered
into effective as of the ___ day of July, 1996, 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 (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"); CITICORP LEASING, INC., a Delaware corporation
("CLI"), on behalf of itself as the initial "Purchaser" and initial "Instrument
Holder" and on behalf of the other financial institutions that may, from time
to time, become "Purchasers" or "Instrument Holders"; and CITICORP LEASING,
INC., a Delaware corporation ("Agent"), in its capacity as the initial
administrative agent for the Instrument Holders.
RECITALS
Effective as of November 13, 1995, the parties hereto entered into a
certain Transaction Agreement (herein so-called) relating to the acquisition
and/or development of certain parcels of real property and the leasing of such
property to Lessee. Capitalized terms used in this Amendment and not otherwise
defined herein shall have the meanings given thereto in the Transaction
Agreement.
Lessee has requested that the Transaction Agreement be amended to permit
Lessee to obtain Construction Advances during the course of construction of
particular Improvements for costs incurred without the requirement that it
satisfy all of the requirements for Construction Advances currently provided
for in the Transaction Agreement.
Trustee, Purchaser, and Agent are willing to accommodate such request on
the basis set out herein, and the parties have entered into this Amendment to
memorialize their agreements on such matter.
NOW, THEREFORE, in consideration of the premises set out above and other
good and valuable consideration, the receipt and sufficiency of which is hereby
confirmed by the parties, the parties hereto have agreed, and do hereby agree,
to amend the Agreement in the following respects.
AGREEMENTS
1. A new section 1.09 is hereby added to the Transaction Agreement, to
read in its entirety as follows:
Section 1.09. Interim Advances.
(a) 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 Section 1.09.
(b) 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. No Parcel for
which the Required Completion Date will occur within the next
two (2) months shall be eligible for inclusion in any Interim
Advance.
(c) 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 size for the
Interim Advance, but costs for each Parcel shall be accounted for
separately. No more than 60% of the anticipated costs of construction
of the New Improvements on any particular Parcel shall be included in an
Interim Advance with respect to such 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.
(d) 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(b) relating to regular Construction
Advances.
(e) Costs related to the New Improvements on any particular
Parcel may be included in only one (1) Interim Advance. 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.
(f) 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.
(g) 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.
(h) 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
substantil 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 the 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 the
Transaction Agreement, and (v) 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.
(i) As further conditions to any Interim Advance:
(i) 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 First Amendment to the Lease of even date
herewith. Each Interim Construction Supplement shall be treated in
the same manner as, and shall be included as, a "Construction
Supplement" for all purposes of the Transaction Agreement and the
other Transaction Documents except to the extent this Amendment
otherwise requires.
(ii) 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
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.
(iii) 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
Interim Advance in question) an endorsement to the Owner Title Policy
and the Mortgagee Title Policy covering the Parcel(s) in question
increasing the coverage to the aggregate amount advanced in respect
of the Parcel(s) and Improvements thereon and/or down dating the
coverage date, without exceptions unacceptable to Agent in its
reasonable discretion.
(iv) 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.
2. In consideration of the execution of this Amendment Lessee hereby
represents, warrants, and covenants with Purchasers, Instrument Holders, Agent,
and Trustee, as follows:
(a) All of the various representations and warranties of Lessee
contained in Section 2.01 of the Transaction Agreement remain true and
accurate in all material respects as of the date of this Amendment.
(b) To the best of Lessee's knowledge, no Default, Event of Default,
or Incipient Default exists under the Lease, the Lease Guaranty, or the
Environmental Indemnity Agreement.
(c) Lessee hereby acknowledges and confirms that as of the date
hereof, Lessee has no defense to the payment or performance of the
Lessee's obligations under the Lease and that, to the best of Lessee's
knowledge, no claims, counterclaims, affirmative defenses, or other such
rights exist against Lessor, Agent, or any Purchaser or Instrument
Holders under the Lease.
3. Purchaser, Instrument Holder, and Agent hereby approve execution of
a First Amendment to Master Lease in the form attached hereto as Annex I.
4. Contemporaneously with the execution and delivery hereof, Lessee shall
pay, or cause to be paid, all costs and expenses incident to the preparation
hereof and the consummation of the transactions specified herein, including,
without limitation, the fees and expenses of the respective legal counsel to
Trustee and Agent.
5. This Amendment may be executed in any number of counterparts with the
same effect as if all parties hereto had signed the same document. All such
counterparts shall be construed together and shall constitute one instrument,
but in making proof hereof it shall only be necessary to produce one
counterpart hereof, executed by the party against whom this Amendment is
intended to be enforced.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties have
caused this Amendment 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
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys Transaction)
LESSEE:
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation
By:
Name:
Title:
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys Transaction)
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 in the Transaction
Agreement)
By:
Name:
Title:
SIGNATURE PAGE OF AGENT AND INITIAL PURCHASER
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys Transaction)
ADMINISTRATIVE AGENT,
INITIAL PURCHASER and INITIAL HOLDER:
CITICORP LEASING, INC.,
a Delaware corporation,
By:
Name:
Title: Annex I
Approved Form of First Amendment
to Master Lease
SECOND AMENDMENT TO TRANSACTION AGREEMENT
This SECOND AMENDMENT TO TRANSACTION AGREEMENT dated as of the
____ day of September, 1996 (the "Amendment"), is entered into by and among THE
PEP BOYS - MANNY, MOE & XXXX, a Pennsylvania corporation ("Lessee" and "Lease
Guarantor"); STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust
company, not in its individual capacity except as expressly stated in the
Transaction Agreement, but solely as Trustee under the Declaration of Trust
(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"); CITICORP LEASING, INC., a Delaware corporation ("CLI"),
on behalf of itself as the initial Purchaser and initial Instrument Holder
under the Transaction Agreement and on behalf of the other financial
institutions that may, from time to time, become Purchasers or Instrument
Holders thereunder; and CITICORP LEASING, INC., a Delaware corporation
("Agent"), in its capacity as the initial administrative agent for the
Instrument Holders under the Transaction Agreement. Capitalized terms used
but not otherwise defined in this Amendment shall have the meanings set forth
in the Transaction Agreement.
RECITALS
A. Effective as of November 13, 1995, Lessee, Trustee and CLI, for
itself and as Agent, entered into that certain Transaction Agreement
(as heretofore amended, supplemented or otherwise modified from time to time,
the "Transaction Agreement") pursuant to the terms of which Trustee will
acquire or has acquired the Property. The Property will be or has been leased
to Lessee (and, where applicable, certain Additional Lessees that are
wholly-owned subsidiaries of Lessee) by Trustee (and in certain cases by a
co-trustee appointed pursuant to the terms of Section 8.04 of the Declaration
of Trust) under that certain Master Lease of even date with the Transaction
Agreement between Trustee, as lessor, and Lessee, as lessee (as heretofore
amended, supplemented or otherwise modified from time to time, the "Lease").
B. Pursuant to the terms and provisions of that certain Lease Guarantee
dated of even date with the Lease ("Lease Guarantee"), the Obligations (as
defined in the Lease Guarantee) of Lessee under the Lease have been guaranteed
by Lease Guarantor.
C. To finance its acquisition of the Property, the Trustee has issued to
CLI, as the initial Purchaser of the Instruments, (i) an A-Note in the stated
principal amount of up to $21,000,000.00, (ii) a B-Note in the stated principal
amount of up to $3,000,000.00, and (iii) a Certificate in the stated amount of
up to $1,000,000.00, pursuant to CLI's Commitment.
D. Trustee desires to increase the maximum amount of Advances available
to it under the terms of the Transaction Agreement, and CLI has agreed to
increase its Commitment thereunder.
NOW, THEREFORE, in consideration of the premises and agreements set forth
herein and therein, the parties agree as follows:
1. CLI, for itself and as Agent, and Lessee hereby approve the execution
by Trustee of that certain Amendment to Declaration of Trust of even date
herewith.
2. CLI and Trustee hereby agree that the maximum amount of Advances
available to Trustee under the Transaction Agreement is hereby increased
from $25,000,000.00 to $50,000,000.00, and CLI's Commitment is hereby
increased accordingly.
3. Simultaneously with the execution of this Amendment, Lessee, Trustee
and CLI shall execute and deliver such amendments to existing Transaction
Documents as the parties deem necessary or desirable in connection with the
increase in the maximum amount of Advances available to Trustee under the
Transaction Agreement, including, without limitation, amendments to, or
amendments and restatements of, the Notes, the Certificate, the Transaction
Mortgages and the Lease Guarantee. It is expressly agreed and acknowledged
that the stated principal amount of the A-Note shall be increased to
$42,000,000.00, the stated principal amount of the B-Note shall be increased
to $6,000,000.00, and the stated amount of the Certificate shall be increased
to $2,000,000.00.
4. Upon execution of this Amendment, Lessee shall pay to CLI or an
Affiliate of CLI an additional structuring fee in the amount of $93,750.00
(i.e., 0.375% of the increase in the Commitment). Lessee shall be entitled to
a credit against such structuring fee in the amount of $25,000.00 in respect
of a proposal fee in such amount previously paid to CLI or an Affiliate
thereof in connection with such increase.
5. Notwithstanding the provisions of Section 1.07(b) of the Transaction
Agreement, the arranging fee shall be equal to 0.50% of the first
$25,000,000.00 [principal or stated amount] of Instruments transferred by CLI
(or which CLI elects to hold) in the Secondary Transaction, and 0.375% of the
amounts of Instruments transferred by CLI (or which CLI elects
to hold) in the Secondary Transaction in excess of $25,000,000.00.
6. The Servicing Fee provided for in Section 1.07(c) of the
Transaction Agreement shall be increased to an amount equal to the greater of
(i) $50,000.00, or (ii) 0.125% of the aggregate outstanding principal balance
of the Notes and the aggregate outstanding balance of the Certificates.
7. Notwithstanding the provisions of Section 13(b)(i)(B) of the Lease,
in the event of the occurrence of a change in GAAP or the interpretive rulings
applicable thereunder which 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 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 accept
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.
8. Except as amended hereby, the terms and provisions of the Transaction
Agreement shall be and remain in full force and effect and are hereby ratified
and affirmed.
9. By its execution hereof, Lease Guarantor hereby ratifies and affirms
each and every representation, warranty, covenant, obligation and indemnity
contained in the Lease Guarantee and acknowledges that the Lease Guarantee
remains in full force and effect.
10. By their execution hereof, Lessee, Pep Boys - Manny, Moe & Xxxx of
Delaware, Inc., a Delaware corporation ("Pep Boys-Delaware"), and The Pep
Boys Xxxxx Xxx & Xxxx of California, a California corporation ("Pep Boys-
California"), as Indemnitors, hereby ratify and affirm each and every
representation, warranty, covenant, obligation and indemnity contained in
that certain Environmental Indemnity Agreement dated of even date with the
Transaction Agreement and acknowledge that the Environmental Indemnity
Agreement remains in full force and effect.
11. By their execution hereof, Pep Boys-Delaware and Pep Boys-California,
in their capacity as Additional Lessees under the Lease, hereby ratify and
affirm the terms and provisions of the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.
[SEE ATTACHED SIGNATURE PAGES]
SIGNATURE PAGE OF LESSEE AND LEASE GUARANTOR
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
LESSEE, LEASE GUARANTOR AND
INDEMNITOR:
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation
By:
Name:
Title:
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
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 AGENT, INITIAL PURCHASER, INITIAL HOLDER
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
AGENT, INITIAL PURCHASER AND
INITIAL HOLDER:
CITICORP LEASING, INC.,
a Delaware corporation
By:
Name:
Title:
SIGNATURE PAGE OF ADDITIONAL LESSEES
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
ADDITIONAL LESSEES AND INDEMNITORS:
PEP BOYS - MANNY, MOE & XXXX OF
DELAWARE, INC., a Delaware corporation
By:
Name:
Title:
THE PEP BOYS MANNY, MOE & XXXX OF
CALIFORNIA, a California corporation
By:
Name:
Title:
