Exhibit 10.26
TRANSACTION AGREEMENT
(1997 Pep Boys II Leased Property)
This TRANSACTION AGREEMENT dated as of February 28, 1997 (the
"Agreement"), is entered into by and among THE PEP BOYS - MANNY, MOE & XXXX, a
Pennsylvania corporation ("Lessee"); STATE STREET BANK AND TRUST COMPANY, a
Massachusetts trust company, not in its individual capacity except as expressly
stated herein, but solely as Trustee under the Declaration of Trust, as
hereinafter defined (State Street Bank and Trust Company, when acting in its
respective capacities as such Trustee, together with any successor trustee under
the Declaration of Trust, is herein referred to as the "Trustee" and State
Street Bank and Trust Company, when acting in its individual capacity, is herein
referred to as "Trust Company"); BANK OF MONTREAL ("Bank of Montreal") as an
initial "Purchaser" and "Instrument Holder; CITICORP LEASING, INC., a Delaware
corporation ("CLI"), on behalf of itself as an initial "Purchaser" and
"Instrument Holder" hereunder and on behalf of the other financial institutions
that may, from time to time, become "Purchasers" or "Instrument Holders"
hereunder; and CITICORP LEASING, INC., a Delaware corporation ("Agent"), in its
capacity as the initial administrative agent for the Instrument Holders
hereunder. Capitalized terms used but not otherwise defined in this Agreement
shall have the meanings set forth in Schedule 1 hereto.
Preliminary Statement
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A. From time to time Trustee will acquire certain parcels of real
property (each such parcel, together with all agreements, easements, licenses,
rights of way or use, appurtenances, tenements, hereditaments and other rights
and benefits now or hereafter belonging to or pertaining to such parcel or the
improvements thereon, being referred to as a "Parcel").
B. Each Parcel and any improvements located or constructed thereon (the
"Improvements") will be leased to Lessee (and, where applicable, certain
Additional Lessees that are wholly-owned subsidiaries of Lessee) by Trustee
under that certain Master Lease (the "Lease") of even date herewith between
Trustee, as lessor, and Lessee, as lessee. All Parcels that, as of any relevant
time, have been included in the coverage of the Lease by supplements as provided
for therein, and all Improvements located on such Parcels from time to time, are
sometimes herein collectively called the "Property." It is acknowledged that
while various subsidiaries of Lessee may, under the terms of the Lease, become
"Additional Lessees" from time to time, references in this Agreement to "Lessee"
are intended to refer only to THE PEP BOYS - MANNY, MOE & XXXX, a Pennsylvania
corporation.
C. To finance its acquisition of the Property, the Trustee shall issue
to CLI and Bank of Montreal, as the initial Purchasers of the Instruments, (i)
Series A Trust Notes (collectively, the "Original A-Notes") in the aggregate
stated principal amount of up to $37,800,000.00 (such amount being referred to
as the "A-Note Commitment"), (ii) Series B Trust Notes (collectively, the
"Original B-Notes") in the aggregate stated principal amount of up to
$5,400,000.00 (such amount being referred to as the "B-Note Commitment"), and
(iii) Series C Certificates (collectively, the "Original Certificates") in the
aggregate stated amount of up to $1,800,000.00 (such amount being referred to as
the "Certificate Commitment"). The Original A-Notes, and any other Series A
promissory notes issued from time to time pursuant to the terms hereof and of
the Declaration of Trust, are collectively referred to as the "A-Notes"; the
Original B-Notes, and any other Series B promissory notes issued from time to
time pursuant to the terms hereof and of the Declaration of Trust are
collectively referred to as the "B-Notes." The Original Certificates and any
other Series C certificates issued from time to time pursuant to the terms
hereof and of the Declaration of Trust are collectively referred to as the
"Certificates." The A-Notes and the B-Notes are herein collectively referred to
as the "Notes." The Notes and the Certificates are herein referred to
collectively as the "Instruments."
D. The Instruments shall be issued, be dated, mature and be payable as
provided in this Agreement and in the Declaration of Trust and shall be entitled
to the benefit of the Trust Estate held by Trustee pursuant to the Declaration
of Trust. A copy of the Declaration of Trust has been provided to Lessee, Agent
and Purchasers.
NOW, THEREFORE, in consideration of the agreements herein and in the
other Transaction Documents and in reliance upon the representations and
warranties set forth herein and therein, the parties agree as follows:
ARTICLE I.
FUNDING
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Section 1.01. Advances under Instruments.
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(a) CLI, as an initial Purchaser of the Instruments, confirms
that its Certificate Commitment is $1,800,000.00, its A-Note Commitment is
$18,112,500.00, and its B-Note Commitment is $2,587,500.00, for a total
Commitment of $22,500,000.00. Notwithstanding the foregoing, it is expressly
agreed that in no event will CLI ever be obligated to make an Advance in respect
of its Commitment if, at the time of the Advance and after giving effect to the
Advance in question, the "Hold Position" of CLI (i) for Advances made during the
period ending March 31, 1997, would exceed $38,500,000.00, (ii) for Advances
made during the period April 1, 1997, through June 30, 1997, would exceed
$30,000,000.00, (iii) for Advances made during the period July 1, 1997, through
September 30, 1997, would exceed $25,000,000.00, and (iv) for Advances made on
or after October 1, 1997, would exceed $15,000,000.00. For purposes hereof the
term "Hold Position" means the sum of (i) the aggregate outstanding principal
balance and/or stated amounts of Instruments then held by CLI hereunder, plus
(ii) the aggregate outstanding principal and/or stated amount of notes or equity
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certificates then held by CLI in respect of the Pep Boys I Facility, plus (iii)
the remaining amount of available advances that Lessee may request under the Pep
Boys I Facility; provided, however, that there shall be excluded from such
calculation any portion of the principal balance and/or stated amount, as
applicable, of any such instruments (whether hereunder or in respect of the Pep
Boys I Facility) that are held by CLI for the benefit of an unaffiliated
participant or assignee that has closed on or purchased such participation. It
is acknowledged that CLI's "Hold Position" with respect to the Pep Boys I
Facility as of the date hereof is $15,920,000.00, such that the maximum amount
of Advances currently available under the CLI Commitment is $22,500,000.00.
(b) Bank of Montreal, as an initial Purchaser of the
Instruments, confirms that its Certificate Commitment is zero ($0.00), its
A-Note Commitment is $19,687,500.00, and its B-Note Commitment is $2,812,500.00,
for a total commitment of $22,500,000.00.
(c) Advances under the Instruments representing the Commitment
shall be made by the Purchasers at the request of the Lessee, in one or more
installments (each an "Advance" and collectively "Advances") subject to
satisfaction or waiver of all conditions and requirements with respect thereto
set forth herein. The Purchasers shall fund each Advance by advancing funds
under A-Notes in the aggregate amount of 84% of such Advance, B-Notes in the
amount of 12% of such Advance, and Certificates in the amount of 4% of such
Advance. Each Purchaser shall fund its pro rata share of each Advance by
depositing with the Agent funds in an amount equal to such Purchaser's
Percentage of the portion of such Advances to be made by Purchasers in respect
of A-Notes, B-Notes or Certificates, as the case may be. All such Advances shall
be funded by the Purchasers by transfers of immediately available funds received
prior to 11:00 a.m. (New York, New York time) in an account of the Trustee to be
established and maintained at Citibank, N.A., New York, New York (Account No.
00000000 - ABA No. 000000000), or to such other Person or account as Trustee may
direct.
(d) The proceeds of each Advance(s) shall be used by Trustee
to purchase Parcels and Improvements, if any, thereon, to make Construction
Advances (as hereinafter defined) to Lessee under the Lease in respect of New
Improvements, to make Interim Advances (as hereinafter defined) to Lessee under
the Lease in respect of New Improvements then under construction in certain
circumstances as more fully described in Section 1.04(c) below, and for other
Approved Purposes. Upon the execution by Trustee and Lessee, and the approval
thereof by Agent, on behalf of Purchasers, of a supplement to the Lease adding a
Parcel to the Lease, and the execution and delivery of such other documents in
connection therewith as Agent, on behalf of Purchasers, may reasonably deem
appropriate consistent with Section 1.04 below, such Parcel and Improvements
shall thereafter be a part of the "Property" covered by this Agreement and the
Transaction Documents. In the case of Advances made to permit Trustee to
reimburse Lessee for the costs of New Improvements located on Parcels already
included in the Property (each, a "Construction Advance" and collectively,
"Construction Advances"), Lessee and Trustee shall execute, and Agent, on behalf
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of the Purchasers, shall approve, a Construction Supplement to the Lease in
substantially the form attached to the Lease (each, a "Construction Supplement"
and collectively, "Construction Supplements").
(e) From time to time other banks or financial institutions
satisfactory to Lessee, Trustee, Agent, and CLI may become additional
"Purchasers" for purposes of this Agreement. Approval of any proposed Purchaser
by any party hereto shall not be unreasonably withheld. In such event such new
Purchaser shall execute such supplements or amendments to this Agreement and/or
the other Transaction Documents as the other parties hereto may deem appropriate
to evidence, among other matters (i) the amount of the Commitment of such new
Purchaser with respect to Instruments, (ii) whether the Commitment of the new
Purchaser represents an increase of the overall Commitment of the Purchasers
hereunder or a reduction of the Commitment of CLI hereunder, and (iii) the
assumption by such new Purchaser of the obligations of a "Purchaser" hereunder.
At the time any Person becomes a Purchaser Instruments reflecting the Commitment
of such Purchaser will be issued to such Purchaser and, if the unadvanced
Commitment of any existing Purchaser is reduced as a result thereof, the
Instruments then held by the existing Purchasers shall be replaced by a
replacement Instrument of the same series issued by Trustee in the reduced
amount. It is expressly agreed that no Person may become a Purchaser hereunder
without the prior written consent of Lessee and Agent. It is further
acknowledged and agreed that any Person that becomes an Instrument Holder as a
result of an assignment thereto of Instruments previously issued to a Purchaser
hereunder shall not thereby become a "Purchaser". An Instrument Holder that is
not also a Purchaser shall have no obligation to fund Advances under the
Instruments and no right to approve Advances, which shall be approved by Agent
acting solely on behalf of Purchasers, subject to the terms and conditions
hereof.
(f) Agent shall keep current a Master Schedule reflecting the
amount of the Commitment of each Purchaser, the amount of Advances made in
respect of the outstanding Instruments, any payments made under or with respect
to the Instruments that reduce the outstanding balance thereof, and the amount
of the unfunded Commitment of each Purchaser. Upon request, the Agent will
provide a copy of the then current Master Schedule to any Purchaser, Instrument
Holder, the Trustee, or the Lessee. Such Master Schedule maintained by Agent
shall be conclusive and binding on the Purchasers, Instrument Holders, and the
Trustee in the absence of manifest error. The information reflected on the
Master Schedule shall have no effect upon the amounts payable by the Lessee
under the Lease, all of which payment obligations shall be governed by the Lease
itself.
Section 1.02. Closing Date. The closing of first Advance shall take
place on such date (the "Closing Date") as the Lessee may request, subject to
Lessee's timely satisfaction of all conditions set forth in Section 1.03, as
well as the applicable portions of Section 1.04.
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Section 1.03. Conditions for Initial Advance. In addition to
satisfaction of the requirements of Section 1.04 below (which are applicable to
all Advances), the initial Advance shall not be made hereunder until all of the
following requirements have been satisfied.
(a) This Agreement, the Declaration of Trust, the Lease, the
Lease Guarantee, and the Environmental Indemnity have each been fully executed
and delivered by each of the parties thereto.
(b) Trustee, Purchasers, and Lessee have each received such
evidence of authority to act, legal opinions, and related matters as they may
deem reasonably necessary to confirm that all parties to the Transaction
Documents are bound thereby and such Transaction Documents are binding and
enforceable upon all parties thereto.
(c) All fees, costs, and expenses to be paid or reimbursed by
Lessee to the Trustee or Purchasers and/or their respective counsel and/or
consultants through the Closing Date as otherwise provided herein, or in the
other Transaction Documents, have been paid in full.
Section 1.04. Conditions Precedent to All Advances. In addition to the
requirements of Section 1.03 above, Purchasers will have no obligation to make
Advances hereunder (including, without limitation, the initial Advance) unless,
at the time such Advance is requested, each of the following conditions
precedent has been satisfied. At such time as the applicable conditions have
been satisfied, Purchasers shall make the requested Advance:
(a) If the Advance in question is in connection with the
addition of an unimproved Parcel (or a Parcel as to which any existing
Improvements are intended to be demolished in connection with the construction
of New Improvements) to the Property:
(i) Trustee has executed and delivered, and
arrangements reasonably satisfactory to the Agent have been made for
the recordation of, a Transaction Mortgage covering the Parcel in
question.
(ii) Title Company shall have issued (or provided
Agent with evidence satisfactory to Agent that the Title Company is
irrevocably obligated to issue immediately after closing) the Owner's
Title Policy to Trustee and the Mortgagee Title Policy to the Agent
with respect to the Parcel(s) being added to the Property.
(iii) Agent has received original, fully-executed,
counterparts of a Supplement to the Lease adding the Parcel in question
to the "Property" covered by the Lease.
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(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.
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(b) If the Advance in question is in connection with a
Construction Advance to be made by Trustee under the Lease in respect of New
Improvements that have been constructed by Lessee on a Parcel:
(i) Agent has received and approved original executed
counterparts of a Construction Supplement to the Lease in respect of
the New Improvements in respect of which Construction Advance is to be
made.
(ii) Agent has received and approved, where
applicable, the materials required to be supplied by Lessee pursuant to
the Construction Addendum to the Lease evidencing the completion of the
New Improvements in question, the payment of the costs therefor, and
the performance of Lessee's other obligations thereunder to support
Lessee's entitlement to the Construction Advance in question.
(iii) Agent shall have received, reviewed, and
approved an "as-built" survey of the Parcel in question dated
subsequent to completion of the New Improvements thereon in form and
substance reasonably satisfactory to Agent which shall show the
location of all New Improvements thereon and that the New Improvements
are completely within the boundaries of the Parcel, shall not indicate
the violation of any Laws, the encroachment across or on any easement
(except as otherwise approved by Agent), or the violation of any
restrictive covenant or other restrictions, and shall not reflect any
other conditions not reasonably acceptable to Agent.
(iv) The Title Company shall have issued (or provided
Agent with evidence satisfactory to Agent that the Title Company is
irrevocably obligated to issue immediately after funding of the Advance
in question) an endorsement to the Owner Title Policy and the Mortgagee
Title Policy covering the Parcel in question increasing the coverage to
the aggregate amount advanced in respect of the Parcel and Improvements
thereon, without exceptions unacceptable to Agent in its reasonable
discretion. Any Permitted Encumbrances approved by Agent in connection
with the addition of the applicable Parcel to the Property may not be
disapproved by Agent in connection with a subsequent Advance in respect
of such Parcel so long as the construction of the New Improvements has
not created any encroachments or other problems related thereto that
did not exist when the Permitted Encumbrance in question was originally
approved.
(v) Agent shall have received, reviewed, and approved
an "as-built" appraisal of the Parcel and the completed Improvements
thereon in form and substance, and issued by an appraiser, satisfactory
to Agent indicating an "as if vacant" value of the Parcel and completed
New Improvements thereon of not less than 50% of the Acquisition Price
(as defined in the Lease) of the Parcel in question after giving effect
to the requested Advance. In the event the appraisal received by Agent
does not adequately support the amount of the requested Advance the
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amount of the Advance shall be reduced such that the Acquisition Price
of the Parcel in question after giving effect to such Advance will be
not more than twice the appraised value of the Parcel.
(vi) The Lessee that leases the Parcel in question
under the Lease has received a certificate of occupancy (or local
equivalent), if any, required for lawful occupancy, and has opened for
business in, the New Improvements.
(c) In addition to Lessee's right to obtain Construction
Advances upon completion of New Improvements on a Parcel as provided for in
subsection 1.04(b) above, Lessee may obtain "Interim Advances" (herein
so-called) to reimburse Lessee for costs theretofore incurred in connection with
the construction of New Improvements that are not yet completed and are
therefore not yet eligible for Construction Advances pursuant to subsection
1.04(b). Interim Advances shall be treated as "Construction Advances" and
"Advances" for all purposes of the Transaction Agreement and the other
Transaction Documents, except as otherwise specifically provided in this
subsection 1.04(c). Interim Advances are subject to the following:
(i) Interim Advances may be obtained by Lessee not
more than six (6) times per annum. For administrative convenience of
the parties Lessee will use its best efforts to coordinate the timing
of Interim Advance requests with requests for other Advances for which
Lessee may be eligible.
(ii) The amount of each Interim Advance shall be not
less than $250,000.00. Costs associated with the New Improvements on
more than one Parcel may be aggregated to reach the required minimum
amount for the Interim Advance, but costs for each Parcel shall be
accounted for separately. The aggregate amount of Interim Advance(s) on
a Parcel shall not exceed 85% of the anticipated construction costs for
New Improvements on that Parcel, with all remaining costs being funded
only through a Construction Advance pursuant to Section 1.04(b) upon
Lessee's satisfaction of all requirements applicable thereto.
(iii) Purchasers shall have no obligation to make any
Interim Advance hereunder if, at the time such Interim Advance would
otherwise be made, the Debt Rating of Lessee is lower than BBB (as
rated by Standard & Poor's Corporation) or lower than Baa2 (as rated by
Xxxxx'x Investors Service). However, if Lessee thereafter reattains the
required Debt Rating and is otherwise then eligible for an Interim
Advance, Lessee may reinstate its requests for Interim Advances that
were not available to it because of failure to satisfy the Debt Rating
requirements. Such Debt Rating requirements are applicable to Interim
Advances only, and do not affect the provisions of Section 1.04(g)
below applicable to Advances generally.
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(iv) Costs related to the New Improvements on any
particular Parcel may be included in only two (2) Interim Advances.
However, the foregoing shall not preclude Lessee from obtaining an
Advance for the acquisition of such Parcel pursuant to subsection
1.04(a) and/or a final Construction Advance in respect of the New
Improvements on such Parcel pursuant to subsection 1.04(b) upon
satisfaction of the requirements of such provisions.
(v) The amount of any Construction Advance available
to Lessee pursuant to subsection 1.04(b) in respect of a given Parcel
shall be reduced to the extent that costs that would otherwise have
been included in such Construction Advance have previously been funded
through an Interim Advance.
(vi) The amount of the Interim Advance attributable
to any particular Parcel and the New Improvements thereon shall not
exceed the costs of acquiring the Parcel and/or the cost of
construction of the New Improvements theretofore constructed and in
place on the Parcel (reduced by the amount of any previous Advance in
connection with acquisition of the Parcel in question), as reasonably
substantiated to Agent. Applicable transaction costs and "soft" costs
related to the addition of the Parcels and/or the development of the
New Improvements shall also be eligible for inclusion in an Interim
Advance.
(vii) Each request for any Interim Advance must be
accompanied by a written certification by a senior financial officer of
Lessee (i) that the costs for which the Interim Advance in question has
been requested have been incurred by Lessee and the work for which such
Interim Advance is requested has been completed and is in place, all in
substantial accordance with the Plans for the work in question
previously approved by Agent, (ii) that Lessee expects to complete
construction of the New Improvements to which the Interim Advance
relates on or before the applicable Required Completion Date, (iii)
certifying the amount of costs that are not covered in the Interim
Advance that Lessee reasonably expects to spend to complete the New
Improvements in question ("Remaining Costs"), (iv) that upon completion
of the New Improvements the Lessee expects that the "as-built"
appraisal for such New Improvements will satisfy the requirements of
this Transaction Agreement for purposes of obtaining a final
Construction Advance covering all costs of construction and development
thereof in accordance with subsection 1.04(b)(v) of this Transaction
Agreement, (v) identifying any new Liens affecting the Parcel of which
such officer has received actual written notice and certifying that
with respect to any such Liens and any further liens that may be filed,
Section 7(a) of the Lease will be applicable thereto, and (vi) that
Lessee then satisfies all other applicable requirements for obtaining
the requested Interim Advance and will continue to do so after giving
effect to the Interim Advance in question.
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(viii) As further conditions to any Interim Advance:
(A) Agent shall have received and approved
original executed counterparts of an Interim Construction
Supplement to the Lease in respect of the Interim Advance in
question in substantially the form attached to the Lease. Each
Interim Construction Supplement shall be treated in the same
manner as, and shall be included as, a "Construction
Supplement" for all purposes of this Transaction Agreement and
the other Transaction Documents.
(B) Agent shall have received and approved,
where applicable, the materials required to be supplied by
Lessee pursuant to the Construction Addendum to the Lease
evidencing construction (to the extent that the costs thereof
are included in the Interim Advance request) of the New
Improvements in question, the payment of the costs therefor,
and the performance of Lessee's other obligations thereunder
to support Lessee's entitlement to the Interim Advance in
question. In this regard the parties acknowledge that the
conditions set out in the Construction Addendum shall be
applicable only to the extent that such conditions would be
reasonably expected to have been completed or satisfied in the
course of construction in a commercially prudent manner to the
stage at which the construction on the New Improvements in
question is then advanced, as reasonably determined by Agent.
(C) Agent shall have received, reviewed, and
approved (either at the time the Parcel was added to the
Property or in connection with the Interim Advance in
question) an "as-if-completed" appraisal of the Parcel(s) and
the completed Improvements to be constructed thereon in form
and substance, and issued by an appraiser, satisfactory to
Agent indicating, on an "as if vacant" basis, that the Parcel
and Improvements to be constructed thereon will have a value,
when completed, of not less than 50% of the sum of the
Acquisition Price (as defined in the Lease) of the Parcel in
question after giving effect to the requested Interim Advance
and the amount of Remaining Costs for such Parcel. In the
event the appraisal received by Agent does not adequately
support the amount of the requested Advance the amount of the
Advance shall be reduced such that the sum of the Acquisition
Price of the Parcel in question after giving effect to such
Advance and the amount of Remaining Costs for such Parcel will
be not more than twice the appraised value of the Parcel.
(D) Agent shall have the right, in its
discretion, to waive the requirement for delivery by Lessee of
any items or materials required to be supplied by Lessee
hereunder with respect to a Parcel; provided, however, that
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any such waiver with respect to a Parcel shall not be deemed
to constitute a waiver with respect to any future Parcel(s).
(d) Regardless of whether the Advance is in connection with
the addition of a Parcel or in connection with a Construction Advance under the
Lease:
(i) No Casualty or Condemnation (as those terms are
defined in the Lease) shall have occurred with respect to any portion
of the Parcel to which such Advance is being made.
(ii) No Event of Default has occurred and is
continuing, and no Special Incipient Default exists under the Lease.
(iii) All reasonable costs and expenses incurred by
Agent or Trustee in connection with the Advance in question, and all
reasonable fees or other payments due in respect of such Advance, have
been paid (or arrangements satisfactory to Agent and Trustee regarding
the payment thereof have been made). It is agreed that so long as no
Event of Default exists no overhead or other internal costs of the
Agent shall be payable by Lessee; provided that the foregoing
limitation shall not be deemed to limit or restrict amounts that are
otherwise recoverable by Agent pursuant to any Transaction Document if
an Event of Default exists.
(iv) No material adverse change has occurred in the
financial condition or business of Lessee and its consolidated
subsidiaries, taken as a whole, as shown on or reflected in a
consolidated balance sheet of Lessee, or its consolidated statement of
income or cash flow, other than changes in the ordinary course of
business that will not have any materially adverse effect, either
individually or in the aggregate, on the business or financial
condition of Lessee and its consolidated subsidiaries.
(v) The amount of the Advance shall not exceed the
costs of acquiring the Parcel and/or the cost of the New Improvements,
as reasonably substantiated to Agent. Applicable transaction costs and
"soft" costs related to the addition of the Parcels and/or the
development of the New Improvements shall be eligible for Advance,
subject to the overall limitation that the value of the Parcel or
Improvements in question must support the amount of the Advance (based
on the appraisal requirements set out in subsection [b][v] above).
(e) The conditions set out in both subsections (a) and (b)
shall apply, subject to reasonable modifications under the circumstances, in the
event Lessee requests an Advance in respect of an improved Parcel where the
Improvements existing thereon are to be occupied under the Lease rather than
being entirely demolished, with or without renovation and/or construction of New
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Improvements, and whether or not a subsequent "Construction Advance" is
anticipated.
(f) To the extent applicable the underwriting guidelines
listed on Schedule 2 attached hereto shall be adhered to by the Agent in
evaluating any requested Advance. Any matters not specifically addressed in such
guidelines shall be subject to the approval of Agent in the exercise of its
reasonable discretion.
(g) Anything to the contrary herein notwithstanding:
(i) Purchasers shall have no obligation to make any
Advance hereunder for the addition of a Parcel to the Property if, at
the time such Advance would otherwise be made, the Debt Rating of
Lessee is lower than BBB- (as rated by Standard & Poor's Corporation or
Baa3 (as rated by Xxxxx'x Investors Service), or the Debt Rating of
Lessee is BBB-/Baa3 and Lessee is then on "credit-watch" status with
either rating agency; and
(ii) Purchasers shall have no obligation to make any
Advance hereunder as a Construction Advance in respect of a Parcel
previously added to the Property if, at the time such Advance would
otherwise be made, the Debt Rating of Lessee is BB+ or lower (as rated
by Standard & Poor's Corporation or Ba1 or lower (as rated by Xxxxx'x
Investors Service).
Section 1.05. Advance Process. The following procedures and limitations
shall be applicable to each Advance unless otherwise waived by Agent:
(a) Lessee shall notify Agent in writing not less than fifteen
(15) days prior to the date on which the Advance in question is desired (or, in
the case of the first Advance hereunder in respect of a Parcel located within a
given state, not less than thirty (30) days prior to the date on which the
Advance in question is desired). The requested Advance shall be funded by the
Purchaser(s) on or before the requested date if Lessee has satisfied all of the
conditions precedent to the requested Advance (other than the execution and
delivery of the necessary Supplements and related closing documents) at least
five (5) Business Days prior to the requested Advance date. Neither Agent nor
Trustee shall have any liability or obligation to Lessee if an Advance cannot be
completed at the time requested by Lessee if all required materials are not
supplied by Lessee in a timely manner.
(b) All materials that are to be reviewed and/or approved as a
condition to the requested Advance shall be submitted to Agent (and, in the case
of the environmental site assessment for a Parcel to be added to the Property,
to the Trustee) for review and approval simultaneously with Lessee's request for
Advance. Except for the environmental site assessment, Lessee shall not be
12
required to deliver materials directly to Trustee unless Lessee is specifically
requested to do so by Agent, it being the responsibility of Agent and its
counsel to coordinate the funding of each Advance (Agent will provide Trustee
with copies of all such materials approved by the Agent as needed). The parties
acknowledge that it may be necessary, in certain cases, for Agent to obtain
approval of one or more such items by one or more of the Purchasers to fulfill
Agent's obligation to such Purchasers, but Agent shall be responsible for
obtaining a timely response from any such Purchaser, and any Purchaser that does
not respond to Agent in a timely manner shall be deemed to have consented to or
approved the matter in question. Trustee and Lessee may rely upon any consent or
approval of any matter given by Agent without inquiry as to whether any required
approvals of any Purchasers have in fact been obtained by Agent.
(c) In connection with each Advance, Agent shall prepare the
necessary supplements to the Lease, and other documents, if any, reasonably
required in connection with such Advance and submit counterparts of the
necessary documents to all applicable parties for execution and delivery. Agent
shall submit to the Trustee all such supplements or other documents requiring
the Trustee's signature with instructions authorizing the Trustee's execution
and delivery of the same. Upon completion of the documents executed in
connection with any Advance, Agent shall deliver to Trustee a copy of the
document transcript for such Advance.
(d) Lessee and Agent, and Trustee (where necessary) shall make
such mutually satisfactory arrangements for the closing and funding of the
Advance, including, without limitation, escrow arrangements with a Title Company
or closing attorney where applicable, as may be necessary or appropriate under
the circumstances.
(e) In no event shall any Advance be available after August
31, 1998 ("Outside Funding Date"). On the Outside Funding Date, any unused
Commitment of the Purchasers shall be canceled and of no further effect.
Section 1.06. Form of Documents. All instruments, documents, or
materials executed by or for the benefit of, or submitted to, Agent or
Purchasers in connection with this Agreement, including, without limitation,
documents submitted in connection with Advances, shall be in form and substance
reasonably acceptable to Agent and its counsel.
Section 1.07. Transaction Fees. Lessee shall pay from time to time the
following fees related to the transactions contemplated herein:
(a) Arranging/Structuring Fee. Lessee shall pay to CLI or an
Affiliate of CLI a structuring fee in the amount of $247,500 cash upon execution
of this Agreement.
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(b) Servicing Fee. Subject to the terms of a certain side
letter agreement of even date herewith between Agent and Lessee regarding a
limitation on such fee, on each December 15 (starting December 15, 1997)
throughout the term of this Agreement, as well as on the Maturity Date, Lessee
shall pay to CLI or an Affiliate of CLI a servicing fee in an amount equal to
0.125% of the weighted average outstanding principal balance of the Notes and
the weighted-average outstanding amount of the Certificates for the preceding
year. The first payment shall be prorated on a daily basis for the period from
the date hereof through December 15, 1997, and the last payment due on the
Maturity Date shall also be a prorated payment covering the period December 16,
2002, through the Maturity Date.
(c) Commitment Fee. On each March 30, June 30, September 30,
and December 30 through and including September 30, 1998, Lessee shall pay to
the Purchasers a commitment fee (computed quarterly in arrears) in an amount
equal to one-fourth of the amount determined by multiplying the unused portion
of the Commitment (computed on a weighted average daily basis during the
quarter) by the applicable percentage provided for in the following chart:
Lessee's Debt Rating Commitment Fee Rate
-------------------- -------------------
BBB+ (or higher) 15.0 basis points
BBB 20.0 basis points
BBB- 26.5 basis points
lower than BBB- 32.5 basis points
The first payment due on March 30, 1997, shall be prorated on a daily basis for
the period from the date hereof through March 30, 1997, and the last payment due
September 30, 1998, shall also be a prorated payment reflecting only the period
July 1, 1998, through the Outside Funding Date. In the event the Outside Funding
Date is extended, the obligation to continue to pay a commitment fee on the
unused portion of the Commitment shall be likewise extended. In the event that
Lessee desires to terminate its right to obtain Advances hereunder prior to the
Outside Funding Date, Agent and Trustee agree to enter into an amendment to this
Agreement and the other Transaction Documents as necessary to terminate the
obligation of the Purchasers to advance the unused portion of the Commitment,
and after such termination no further commitment fees shall be due.
(d) Trustee Fees. From time to time the Lessee shall pay to
the Trustee the various fees and other payments provided for in the Declaration
of Trust and/or in the Fee Letter.
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Section 1.08. Extension of Lease Term.
------------------------
(a) Anything to the contrary in the Lease or any other
Transaction Document to the contrary notwithstanding, it is expressly agreed
that the Term of the Lease may not be extended without the unanimous approval of
the Instrument Holders, which approval may be withheld or conditioned in such
Instrument Holders' sole discretion. Neither Agent nor Trustee shall have the
authority to grant approval of any extension of the Term of the Lease requested
by Lessee unless all Instrument Holders have approved the extension in question.
Agent shall be responsible for polling the Instrument Holders in the event
Lessee requests an extension of the Term of the Lease, and Lessee and Trustee
shall be entitled to rely on any statement or certificate issued by Agent
confirming that all Instrument Holders have approved the requested extension. In
connection with any such extension of the Term of the Lease, Lessee, Trustee,
Agent, and the Instrument Holders shall enter into such supplements and
amendments to all Transaction Documents (including, without limitation,
amendments or reissuance of the Instruments themselves), as any party may
reasonably require to reflect the agreements of the parties with respect to such
extension.
(b) In the event that Lessee and Agent desire to extend the
term of the Lease and one or more Instrument Holders are unwilling to approve
such extension, Lessee and Agent shall endeavor, as more fully described in the
Lease, but at Lessee's sole cost, to arrange for replacement of the Instrument
Holders that do not desire to extend the Lease.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
------------------------------
Section 2.01. Lessee's Representations and Warranties. The Lessee
hereby represents and warrants to the Trustee, Agent, Purchasers, and the
Instrument Holders that the following statements are true and correct as of the
date hereof:
(a) Organization and Authority. Lessee (i) is duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Pennsylvania, (ii) has full corporate power and authority
to own and operate its properties and to conduct its business as presently
conducted, and full corporate power, authority and legal right to execute,
deliver and perform its obligations under this Agreement and all other
Transaction Documents to which Lessee is a party, and (iii) is duly qualified to
do business as a foreign corporation in good standing in each jurisdiction in
which its ownership or leasing of properties or the conduct of its business
requires such qualification.
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(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.
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(f) No Default. Lessee is not in default under or with respect
to any agreement or other instrument to which it is party or by which it or its
assets may be bound which would have a material adverse effect on the financial
condition of Lessee or the ability of Lessee to perform its obligations under
the Lease or any other Transaction Document to which Lessee is a party. Lessee
is not subject to or in default under any order, award or decree of any court,
arbitrator, or other governmental authority binding upon or affecting it or by
which any of its assets may be bound or affected which would have a material
adverse effect on the ability of Lessee to carry on its business as presently
conducted or to perform its obligations under this Agreement and all other
Transaction Documents to which Lessee is a party.
Section 2.02. Trust Company Representations. Trust Company, in its
individual capacity and not as Trustee (with the exception of clauses [d][ii]
and [f][ii], which representations are made solely in its trust capacity),
represents and warrants to the Lessee, to Agent, and the Instrument Holders that
the following statements are and shall be true and correct as of the Closing
Date:
(a) Organization and Authority. Trust Company is a trust
company duly organized, validly existing and in good standing under the
laws of the Commonwealth of Massachusetts, and Trust Company has all
requisite corporate power and authority to execute and deliver the
Instruments, the Declaration of Trust, and each Transaction Document to
which it is a party (regardless of the capacity in which it is a party
thereto) and to comply with the terms thereof and perform its
obligations thereunder. The trust created by the Trust Declaration is a
trust formed by Trust Company for the sole purpose of acquiring,
financing, and leasing the Property.
(b) No Actions Pending. There is no action, suit, proceeding
or investigation at law or in equity by or before any court,
governmental body, agency, commission or other tribunal now pending or,
to the knowledge of the Trust Company, threatened, against or affecting
the Trust Company, (i) which questions the validity or enforceability
of this Agreement or any of the other Transaction Documents to which
the Trust Company is a party (regardless of its capacity therein), or
(ii) the probable outcome of which would impair the ability of the
Trust Company to perform its obligations under any Transaction Document
to which it is or is to be a party.
(c) No Violation. The Trust Company's or the Trustee's
respective execution, delivery and performance of its obligations under
each Transaction Document to which it is or is to be a party
(including, without limitation, the execution, delivery, and
performance by Trustee of the Lease in its capacity as Lessor
thereunder) will not violate such party's charter or by-laws, will not
contravene any federal or state law, governmental rule or regulation
(which representation shall be limited to the laws of Massachusetts and
United States federal law) pertaining to its banking or trust powers,
17
judgment or order applicable to such party or any of its assets, and
will not require the consent or approval of any stockholders of the
Trust Company or of any trustee or holder of any material indebtedness
of the Trust Company, will not conflict with or result in a breach of
any term or provision of, or constitute any default under, indebtedness
for the repayment of borrowed money or any other material indenture,
mortgage, contract, agreement or other instrument to which it is a
party or by which it or any of its assets is bound, will not result in
any violation of any Laws (which representation shall be limited to the
laws of Massachusetts and United States federal law pertaining to its
banking or trust powers), which violation of any such Law would
materially adversely affect the ability of such party to perform its
obligations under any Transaction Document to which it is or is to be a
party or question the validity or enforceability of the Transaction
Documents to which it is or is to be a party or require the consent or
approval of, the giving of notice to, the registration, qualification
or filing with, or the taking of any other action with respect to, any
federal or state governmental commission, authority, body or agency
under any existing law (which representation shall be limited to the
laws of Massachusetts and United States federal law) governing the
banking or trust or fiduciary powers of the Trust Company, except for
filings, if any, made pursuant to any periodic reporting requirements
applicable to it.
(d) Authorization, Execution, Delivery and Enforceability of
Transaction Documents. Each of the Transaction Documents to which Trust
Company is or is to become a party, and any other agreement entered
into in connection with any transaction contemplated by any Transaction
Document, has been duly authorized by all necessary action on the part
of Trust Company, has been duly executed and delivered, and is the
legal, valid and binding obligation of Trust Company enforceable
against Trust Company in accordance with its terms, except as
enforceability thereof may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of
equity. Each of the Transaction Documents to which the Trustee
(including, without limitation, in its capacity as Lessor) is or is to
become a party, and any other agreement entered into in connection with
any transaction contemplated by any Transaction Document, (i) has been
duly authorized by all necessary action on the part of the Trustee, has
been duly executed and delivered, and (ii) is the legal, valid and
binding obligation of Trustee (but not Trust Company) enforceable
against such party in accordance with its terms, except as
enforceability thereof may be limited by the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and by general principles of
equity.
(e) Authorizations and Consents. The nature of Trust Company,
its execution and delivery of each Transaction Document to which it is
a party (regardless of the capacity in which it is a party), its
consummation of the transactions contemplated thereby, its compliance
18
with the terms thereof or any circumstance in connection with the
transactions contemplated thereby does not require the consent of any
Person or the approval or authorization of, or filing, registration or
qualification with, any Massachusetts or federal governing authority
governing the banking or trust powers of Trust Company (other than such
as have been obtained) as a condition to such execution, delivery and
compliance. All authorizations, consents, licenses, orders, approvals,
waivers, extensions or variances of, or notices to or registrations or
filings with any governmental department, commission, board, bureau,
agency or instrumentality (which representation shall be limited to the
laws of Massachusetts and United States federal law pertaining to its
banking or trust powers) necessary to the valid execution, delivery and
performance by the Trust Company and the Trustee, respectively, of the
Declaration of Trust, this Agreement and the other Transaction
Documents to which such party is or is to be a party have been
obtained.
(f) Authorization, Execution, Delivery and Enforceability of
Instruments. Each of the Notes and the Certificates (i) has been duly
authorized by all necessary corporate action on the part of the Trust
Company, in its capacity as Trustee, has been duly executed and
delivered by the Trustee, and (ii) constitutes a legal, valid and
binding obligation of the Trustee (acting solely as Trustee under the
Declaration of Trust, and not in its individual capacity), enforceable
against the Trustee in accordance with their terms and the terms of the
Declaration.
(g) Liens. Trust Company has not voluntarily created or
granted any Lien upon any portion of the Property other than in
accordance with the terms of the Transaction Documents.
(h) No Brokers. Trust Company has entered into no agreements,
arrangements or negotiations that would require the payment of any fees
or compensation to any brokers, finders, or similar persons in
connection with the transactions contemplated hereby except for such
fees and expense reimbursements to the parties hereto and their
respective counsel as are provided for in the Transaction Documents
and, in the case of the Trustee, the Fee Letter, and Trust Company
(solely with respect to the above actions taken by it in its individual
capacity) agrees to indemnify, defend and save harmless each other
party hereto from and against any claims for fees or commissions from
any Person engaged by the Trust Company.
(i) Offer of Interests. Neither the Trust Company nor any
Person authorized to act on its behalf has directly or indirectly
offered any interest in the Trust Estate or under the Declaration of
Trust or any interests similar thereto or the Instruments or any
similar security, or offered any thereof for sale to, or solicited any
offer to buy any thereof from, or otherwise approached or negotiated
19
with respect thereto with, any Person, which offer or solicitation
would require registration under the Securities Act.
ARTICLE III.
TRUSTEE AND TRUST COMPANY COVENANTS
-----------------------------------
Until the Trustee's obligations hereunder, under the Declaration of
Trust, and all other Transaction Documents have been paid and performed in full,
unless Trustee receives from Agent a written statement specifying that the
Majority Holders do not object to a deviation, Trustee covenants and agrees with
Lessee, Agent, and each of the Instrument Holders as follows:
Section 3.01. Lien Claims. Trustee shall (a) promptly furnish to Agent
and Lessee a copy of any notice of claims sent to Trustee by any person claiming
or asserting any Lien on any portion of the Property, and (b) not create or
authorize any Liens (other than the Permitted Encumbrances) on the Property
arising by, through, or under Trustee.
Section 3.02. Inspection of Property. At all reasonable times, Trustee
shall permit Agent and/or its representatives to inspect the Property, provided
that such inspection rights are subject to all limitations and restrictions upon
the right of Trustee (as "lessor" under the Lease) to inspect the Property under
the Lease.
Section 3.03. Notice of Significant Matters.
(a) Trustee shall promptly supply to Agent and Lessee copies
of any tax or other bills, and any other notices or other material
communications received by Trustee from any Person (including, without
limitation, Lessee, Lease Guarantor, or any Tribunal) relating to the Property
or any Transaction Document unless it is evident that Agent and/or Lessee, as
the case may be, shall have independently received such communication. Without
limitation, it is expressly intended that the foregoing covenant shall require
delivery to Agent and Lessee of any notice or communication received by Trustee
with respect to any compliance or non-compliance of the Property with respect to
Environmental Laws, or the presence of Hazardous Materials on or emanating from
the Property. Notwithstanding the foregoing, however, Trustee shall have no
obligation to provide Lessee with copies of any instructions, communications,
directions, or authorizations received from Agent or any Instrument Holder with
respect to or relating to actions to be taken by the Trustee as a result of an
Event of Default or Incipient Default.
20
(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
21
consent of the Majority Holders, which consent may be withheld in such Holders'
discretion except in those instances where the Transaction Documents require
that such approval be exercised reasonably, in which event the Holders shall not
unreasonably withhold or delay their approval of the matter in question.
(b) Trustee shall not amend, supplement, modify, or terminate
the Declaration of Trust without the prior written consent of Lessee, which
consent shall not be unreasonably withheld so long as Lessee's rights and
interests are not materially adversely affected thereby. The Lessee shall be
deemed to be a third party beneficiary under the Declaration of Trust to the
extent of the rights (including, without limitation, rights relating to any
monies, consents, approvals and notices) given to the Lessee thereunder, and the
Lessee shall have a direct right to enforce all such rights. Notwithstanding the
foregoing, Lessee shall not be responsible for any costs or expenses incurred in
connection with any modifications to the Declaration of Trust that are not
requested by Lessee.
Section 3.07. Transactions with Affiliates. Trustee will not, directly
or indirectly, enter into any transaction with respect to the ownership of the
Property (or, if at any time the Trustee obtains possession of the Property as a
result of the expiration or termination of the Lease, the operation of the
Property) with any of its Affiliates other than in the ordinary course of
business and upon fair and reasonable terms no less favorable than Trustee could
obtain or could become entitled to in an arm's-length transaction with a Person
which was not an Affiliate of Trustee. No transactions by Trustee (whether with
Affiliates of Trustee or otherwise) shall affect Lessee's rights with respect to
the Property pursuant to the Lease so long as no Event of Default exists.
Section 3.08. Transfer or Encumbrance of the Property. Except as a
result of the exercise by Lessee or a nominee of Lessee of any options to
purchase the Property or a portion thereof contained in the Lease, or at the
request of Agent or the Majority Holders after the occurrence of an Event of
Default, Trustee will not, directly or indirectly, voluntarily or by operation
of Law, sell, convey, transfer, assign, encumber, pledge, lease, rezone, or
permit to be sold, conveyed, transferred, assigned, encumbered, pledged, leased
(except for the Lease and any sublease permitted under the terms of the Lease)
or rezoned, or otherwise dispose of, any interest in all or any part of the
Property without Agent's prior written approval, which approval may be withheld
for any reason in the sole and absolute discretion of Agent. So long as the
Lease remains in effect, any transaction by Trustee with respect to the Property
approved by Agent shall be made expressly subject to the rights of Lessee under
the Lease, including Lessee's purchase options thereunder. Notwithstanding the
foregoing, Agent agrees to execute such instruments or documents as Lessee may
request in connection with the granting of easements or other such interests
affecting the Property under those circumstances where the Lessee is permitted
to grant such rights pursuant to the Lease and after Lessee has satisfied all
requirements of the Lease with respect to such matters. In no event shall Agent
be obligated to grant any recognition, non-disturbance or other rights to any
subtenant of Lessee under the Lease that
22
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.
23
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.
24
(d) Trust Company shall not amend, supplement, modify or
terminate the Declaration of Trust or any of the other Transaction Documents
without the prior written consent of Lessee, which consent shall not be
unreasonably withheld so long as Lessee's rights and interests are not
materially adversely affected thereby. The Lessee shall be deemed to be a third
party beneficiary under the Declaration of Trust to the extent of the rights
(including, without limitation, rights relating to any monies, consents,
approvals and notices) given to the Lessee thereunder, and the Lessee shall have
a direct right to enforce all such rights. Notwithstanding the foregoing, Lessee
shall not be responsible for any costs or expenses incurred in connection with
any modifications to the Declaration of Trust that are not requested by Lessee.
(e) Trust Company shall maintain its existence as a
Massachusetts trust company and preserve and keep in full force and effect its
rights and franchises as necessary to permit it to serve as Trustee hereunder so
long as it is the Trustee; provided, that the sole obligation of the Trust
Company with respect to a breach of this covenant shall be to resign as Trustee
in accordance with Section 8.02 of the Declaration of Trust.
ARTICLE IV.
THE NOTES AND THE CERTIFICATES
------------------------------
Section 4.01. Rates Applicable to Instruments. Each of the Notes shall
bear interest at the Note Rate applicable to such Note, and each Certificate
shall earn a yield at the Certificate Rate applicable to such Certificate. All
payments of principal, interest, yield and stated amount on the Instruments that
are not paid when due in accordance with the terms of this Agreement and the
applicable Instruments shall bear interest at the Default Rate until paid. To
the extent permitted by applicable Law, interest on the unpaid principal balance
of the Notes and yield on the Certificates from time to time outstanding at the
rates provided in this Agreement shall be calculated on the basis of the actual
number of days elapsed, but computed as if each year consisted of three hundred
and sixty (360) days. However, any calculations of the Maximum Rate shall be
made on the basis of a 365 (or 366, as applicable) day year. Acceptance by
Trustee or any Instrument Holder of any payment in an amount less than the
amount then due shall be deemed an acceptance on account only.
Section 4.02. Assignments and Participations.
-------------------------------
(a) The Lessee may not assign its rights or delegate its
obligations under this Agreement without the prior written consent of all of the
Instrument Holders. The foregoing shall not, however, be deemed to limit
Lessee's rights under the Lease with respect to the Property, including the
right to assign to other parties that constitute "Lessee" under the Lease.
25
(b) Each Instrument Holder may assign all or a portion of the
Instruments then held by it and its rights and obligations under this Agreement
and the other Transaction Documents to another bank or financial institution
approved by Lessee, which approval shall not be unreasonably withheld or
delayed. The parties to each such assignment shall execute and deliver to the
Agent for its acceptance and recording in the Register (as defined in the
Declaration of Trust) an "Assignment Agreement" (herein so-called) in
substantially the form attached hereto as Exhibit "A". Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment Agreement (which effective date shall be at least five (5)
Business Days after the execution of such Assignment Agreement), (x) the
assignee thereunder (the "Assignee") shall, to the extent that rights and
obligations hereunder have been assigned to it, have the rights and obligations
of an Instrument Holder hereunder and a Holder under the Transaction Documents
arising subsequent to such assignment and (y) the assignor thereunder (the
"Assignor") shall, to the extent that rights and obligations hereunder have been
assigned by it, relinquish its rights (other than any rights to indemnification
it may have hereunder under the Transaction Documents) under this Agreement with
respect to the Instruments (or interests therein) assigned. No Assignee of an
Instrument or an interest therein shall become a "Purchaser" hereunder nor shall
any Assignee have any Commitment for Advances hereunder as a result of such
assignment, and no Purchaser shall be released from any unfunded Commitment
hereunder as a result of an assignment of the Instruments then held by such
Purchaser. Any Advance made by a Purchaser against its Instruments after the
assignment of an interest in such Instrument to a third party shall be deemed to
have been made by such Purchaser against the portion of the Instrument that is
still held by the Purchaser in question. No Assignee of an Instrument or an
interest therein shall acquire any greater rights with respect to or arising out
of such Instrument therein than were available to the original Holder thereof
(or would be available to such original Holder if it were the then Holder
thereof). Lessee shall not be responsible for any costs, expenses or other
charges in connection with any assignment hereunder.
(c) By executing and delivering an Assignment Agreement, the
Assignor thereunder and the Assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (i) such Assignor makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement and the other Transaction Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
the other Transaction Documents or any other instrument or document furnished
pursuant hereto; (ii) such Assignor makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Lessee
or the performance or observance by the Lessee of any of its obligations under
this Agreement or any other Transaction Document, any other instrument or
document furnished pursuant hereto; (iii) such Assignee confirms that it has
received a copy of this Agreement, together with such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision with respect to entering into such Assignment Agreement; and (iv) such
26
Assignee will, independently and without reliance upon the Lessee, the Agent,
the Trustee, such Assignor or any other Instrument Holder and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.
(d) Each Instrument Holder may sell participations (as opposed
to assignments of Instruments or assignments of partial interests in
Instruments) to one or more banks or other entities in or to all or a portion of
the Instruments then held by it and its rights and obligations under this
Agreement and the other Transaction Documents; provided, however, that (i) such
Instrument Holder shall remain the Holder of any such Instrument for all
purposes under this Agreement and the other Transaction Documents and the
Lessee, the Trustee, the Agent and the other Instrument Holders shall continue
to deal solely and directly with such Instrument Holder in connection with such
Instrument Holder's rights and obligations under this Agreement; (ii) no
participant shall be entitled to receive any greater payment than such
Instrument Holder would have been entitled to receive with respect to the rights
participated except as a result of circumstances arising after the date of such
participation to the extent that such circumstances affect other Instrument
Holders and participants generally; and (iii) no Instrument Holder shall grant a
participation that conveys to the participant the direct right to vote or
receive notices under this Agreement or other Transaction Documents in respect
of the Instrument in which such participant holds a participation.
(e) Any Instrument Holder may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 4.02, disclose to the assignee or participant or proposed assignee
or participant any information relating to the Lessee furnished to such
Instrument Holder by or on behalf of the Lessee; provided, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any confidential information
relating to the Lessee received by it from such Instrument Holder in a manner
consistent with that set forth in Section 6.17 hereof and any other provision of
the Transaction Documents relating to the preservation of confidentiality.
(f) Anything in this Section 4.02 to the contrary
notwithstanding, any Instrument Holder may assign and pledge all or any of the
Instruments held by it to any Federal Reserve Bank or the United States Treasury
as collateral security pursuant to applicable regulations of the Board of
Governors of the Federal Reserve System and any operating circular issued by
such Federal Reserve Bank; provided that any payment made by the Lessee to the
Trustee for the benefit of such assigning and/or pledging Instrument Holder in
accordance with the terms of the Transaction Documents shall satisfy the
Lessee's obligations under the Transaction Documents in respect thereof to the
extent of such payment.
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(g) No assignment shall result in a change in the Note Rate or
Certificate Rate applicable to the Instrument in question.
(h) Regardless of the number of Instrument Holders, at all
times the Instrument Holders shall designate a single "Agent" to interface with
Lessee and the Trustee, and the Lessee and Trustee shall be required to pay to
or otherwise deal only with the Agent and not the individual Instrument Holders.
Wherever the Transaction Documents grant rights or remedies to the Instrument
Holders (either in the aggregate or to a particular class of Instrument Holders)
all such rights and remedies shall be exercised through the Agent. Lessee and
Trustee shall be free to ignore directions or instructions delivered directly by
any Instrument Holder rather than by Agent on behalf of the Instrument Holders
(or applicable portion thereof).
Section 4.03. Taxes.
------
(a) Any and all payments by the Lessee or the Trustee
hereunder or under any of the Transaction Documents (including, without
limitation, payments of Net Rent, Contingent Rent Payments, Offer Purchase
Price, and Additional Rent (as such terms are defined in the Lease), interest,
current yield, fees and principal and stated amounts of the Instruments) shall
be made free and clear of and without deduction for any and all present or
future Taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding, in the case of payments made to
each Instrument Holder or the Trustee (as the case may be), (1) taxes imposed on
the Trustee's or such Instrument Holder's income, and franchise taxes imposed on
it, by the jurisdiction under the Laws of which such Instrument Holder or the
Trustee (as the case may be) is organized or any political subdivision thereof
and, in the case of each Instrument Holder, taxes imposed on its income, and
franchise taxes imposed on it, by the jurisdiction of such Instruments Holder's
office where Instrument Holder's interest in the Instruments is administered or
any political subdivision thereof and (2) any taxes imposed by the United States
of America by means of withholding at the source if and to the extent that such
taxes shall be in effect and shall be applicable, on the more recent to occur of
(x) the original issuance of the applicable Instrument, or (y) the date of
adjustment of the Note Rate or Certificate Rate applicable to such Instrument or
applicable interest therein in connection with the Secondary Transaction, to
payments to be made to such Instrument Holder or the Trustee, as the case may be
(all such non-excluded Taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Charges" and all such excluded
Taxes, levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Excluded Charges"). If the Lessee or the Trustee
shall be required by Law to deduct any Charges from or in respect of any sum
payable hereunder or under any of the Transaction Documents to the Trustee or
any Instrument Holder (i) the sum otherwise payable shall be increased as may be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.03) the Trustee or
such Instrument Holder (as the case may be) receives an amount equal to the sum
28
it would have received had no such deductions been made, (ii) the Lessee or the
Trustee shall make such deductions, and (iii) the Lessee or the Trustee shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Law.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the Lessee and/or the Trustee, as applicable, shall be entitled, to
the extent it is required to do so by law, to deduct or withhold income or other
similar taxes imposed by the United States of America on Net Rent, Contingent
Rent Payments, Offer Purchase Price, and Additional Rent, interest, current
yield, fees, principal and stated amounts of the Instruments or other amounts
payable hereunder or under the other Transaction Documents for the account of
the Trustee or any Instrument Holder (without the payment of increased amounts
to such Instrument Holder or the Trustee pursuant to subsection (a) above in the
case of Excluded Charges) other than the Trustee (or any successor thereto) or
an Instrument Holder (i) that is a domestic corporation for Federal income tax
purposes or (ii) which has filed with the Lessee and/or the Trustee all
applicable forms, affidavits, or certificates for the applicable year to the
extent deduction or withholding of such taxes is not required as a result of the
filing. If the Lessee or the Trustee shall so deduct or withhold any such taxes,
it shall provide a statement to the Lessee, Trustee and Agent, as applicable,
setting forth the amount of such taxes so deducted or withheld, the applicable
rate and any other information or documentation which such Instrument Holder or
the Trustee may reasonably request for assisting such Instrument Holder or the
Trustee to obtain any allowable credits or deductions for the taxes so deducted
or withheld in the jurisdiction or jurisdictions in which such Instrument Holder
is subject to taxes.
(c) In addition, the Lessee agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under the
Transaction Documents or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or any of the Transaction Documents
(hereinafter referred to as "Other Taxes").
(d) The Lessee will indemnify the Trustee and each Instrument
Holder for the full amount of any Charges and Other Taxes (including, without
limitation, any Other Taxes imposed by any jurisdiction on amounts payable under
this Section 4.03) paid by the Trustee or such Instrument Holder (as the case
may be) and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto except as a result of the negligence or
willful misconduct of such Instrument Holder or the Trustee, as the case may be,
whether or not such Charges or Other Taxes were correctly or legally asserted.
Payments under this indemnification shall be made within thirty (30) days from
the date such Instrument Holder or the Trustee (as the case may be) makes
written demand therefor accompanied by reasonable substantiation of the
requested payment. Lessee shall not be responsible for any interest or penalties
in connection with such Charges or Other Taxes unless Lessee has been notified
of such Charges or Other Taxes as provided above at least thirty (30) days prior
to the imposition of any such interest or penalties (or, if later, within thirty
29
(30) days after the Trustee or Instrument Holder, as applicable, obtained actual
knowledge that a Charge or Other Tax for which Lessee has responsibility
hereunder has been imposed).
(e) Within thirty (30) days after the date of the payment of
Charges by or at the direction of the Lessee, the Lessee will furnish to the
Trustee the original or a certified copy of a receipt evidencing payment
thereof. Should any Instrument Holder or the Trustee ever receive any refund,
credit or deduction from any taxing authority to which such Instrument Holder or
the Trustee would not be entitled but for the payment by the Lessee of Charges
as required by Section 4.03 (it being understood that the decision as to whether
or not to claim, and if claimed, as to the amount of any such refund, credit or
deduction shall be made by such Instrument Holder or the Trustee in its sole
discretion), such Instrument Holder or the Trustee thereupon shall repay to the
Lessee an amount with respect to such refund, credit or reduction equal to any
net reduction in taxes actually obtained by such Instrument Holder to the extent
attributable to such refund, credit or deduction.
(f) Without prejudice to the survival of any other agreement
of the Lessee hereunder, the agreements and obligations of the Lessee contained
in this Section 4.03 shall survive the payment in full of principal and stated
amount of and interest and current yield on the Instruments.
Section 4.04. Avoidance of Taxes, Other Charges and Increased Costs.
------------------------------------------------------
(a) Each Instrument Holder shall use reasonable efforts
(consistent with its internal policies and legal and regulatory restrictions) to
select a jurisdiction for its purchasing office or change the jurisdiction of
its purchasing office (or other office where its interest in the Instruments is
administered), as the case may be, so as to avoid the imposition of any
Increased Costs, Charges or Other Taxes or to eliminate any additional Increased
Costs, Charges or Other Taxes which may thereafter accrue; provided, that no
such selection or change of the jurisdiction for its purchasing or other office
shall be made if, in the reasonable judgment of such Instrument Holder, such
selection or change would be disadvantageous to such Instrument Holder.
(b) In the event that any Instrument Holder (other than CLI)
shall claim payment of any additional amounts pursuant to Section 4.03 or
payment of Increased Costs, the Lessee shall have the right, if no Incipient
Default or Event of Default exists, to replace such Instrument Holder with
another Approved Instrument Holder provided that such Approved Instrument Holder
unconditionally offers in writing (with a copy to the Trustee) to purchase, in
accordance with the provisions of Section 4.02, all of such Instrument Holder's
rights hereunder and under the Transaction Documents, including the Instruments
held by such Instrument Holder, without recourse, at the principal and stated
amount of such Instruments plus interest and current yield accrued thereon to
the date of such purchase on a date therein specified. If the Instrument Holder
30
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.
31
ARTICLE V.
MISCELLANEOUS
-------------
Section 5.01. Survival. Except as otherwise expressly provided herein
or other applicable instrument or document, the parties' obligations under this
Agreement and in any certificate or other instrument delivered by any party or
on such party's behalf pursuant to this Agreement shall not survive payment in
full of all amounts due on the Notes and the Certificates and under any of the
Transaction Documents, the execution and delivery of any Transaction Document,
any issuance or disposition of any of the Instruments, any disposition of any
interest in the Property or the termination of any Transaction Document, and
shall continue in effect regardless of any investigation made by or on behalf of
any party hereto and notwithstanding that any party may waive compliance with
any other provision of any Transaction Document. However, it is expressly agreed
that all indemnification provisions for the benefit of Trustee, Agent,
Purchasers, and/or Instrument Holders provided herein or in any such other
instrument or document shall survive any such payments, whether or not expressly
so stated.
Section 5.02. Notices. Unless specifically otherwise provided, whenever
any of the Transaction Documents requires or permits any consent, approval,
notice, request, or demand from one party to another, the consent, approval,
notice, request, or demand must be in writing to be effective and shall be
deemed delivered one (1) Business Day after deposit with a nationally recognized
overnight courier service for overnight delivery addressed to the parties hereto
at the respective addresses specified below or at such other address as they may
specify by written notice. The address for each party for purposes hereof is as
follows:
Holders, Purchasers and Agent:
------------------------------
Citicorp Leasing, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: EFL/CBL Credit Head
FAX No. 914/000-0000
with copies to:
Xxxxx XxXxxxxxx & Oaks Xxxxxxxx
000 Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
FAX No. 214/000-0000
32
Trustee:
--------
State Street Bank and Trust Company
Corporate Trust Xxxxxxxxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
Vice President
FAX No. 617/000-0000
with copies to:
Xxxxxxx, Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
FAX No. 860/000-0000
and a courtesy copy to Agent at:
Citicorp Leasing, Inc.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: EFL/CBL Credit Head
FAX No. 914/000-0000
Lessee:
-------
The Pep Boys - Manny, Moe & Xxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx
Senior Vice President-Finance
FAX No. 215/000-0000
33
with copies to:
The Pep Boys - Manny, Moe & Xxxx
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Real Estate Counsel
FAX No. 215/000-0000
Notices sent by any other method (including certified mail, personal delivery,
or facsimile transmission) shall be deemed delivered when actually received by
the addressee. Any notice of change of address shall be effective only upon
actual receipt, regardless of delivery method, and such new address shall be
effective as to notices given by the other parties commencing ten (10) days
after such change of address notice is received by such parties. No party may
establish an official address for notice outside the continental United States.
Section 5.03. Severability. If any provision hereof or the application
thereof to any Person or circumstance shall be invalid, illegal or
unenforceable, the remaining provisions or the application of such provision to
Persons or circumstances other than those as to which it is invalid or
enforceable, shall continue to be valid and enforceable.
Section 5.04. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, nor consent to any departure by the Lessee therefrom, shall
in any event be effective unless the same shall be in writing and signed by
Agent (with the consent of the Majority Holders), the Lessee and the Trustee,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given unless otherwise provided in such
written instrument.
Section 5.05. Headings. The table of contents and headings of the
Articles, Sections and subsections are for convenience only and shall not affect
the meaning of this Agreement.
Section 5.06. Definitions. Except as otherwise expressly provided,
capitalized terms used in this Agreement shall have the meanings given in
Schedule 1 hereto.
Section 5.07. Benefit. The parties hereto and their permitted
successors and assigns, but no others, shall be bound hereby and entitled to the
benefit hereof. Each registered assignee of a partial interest in an Instrument
(regardless of whether a New Instrument is issued to such assignee) shall be
treated as an Instrument Holder and shall be a beneficiary hereof; however, no
holder of a participation or other derivative interest in an Instrument shall be
a beneficiary hereof.
34
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
35
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
36
Documents, enter into supplements which shall form a part hereof, when required
or permitted by any of the provisions of the Transaction Documents.
Section 5.15. Confidentiality. Each of the parties hereto (and any
Person that hereafter becomes an Instrument Holder) agrees that unless otherwise
required by Law or by any governmental authority or body or consented to by the
Lessee and CLI it will maintain the confidentiality of all non-public
information (i) regarding the financial terms of this transaction or (ii)
regarding the Lessee or the Property which shall be furnished to it by the
Lessee in connection with the transactions contemplated by the Transaction
Documents, in accordance with the procedures it generally applies to
confidential material. The parties hereto agree not to publish tombstones or
other public announcements in connection with the transactions contemplated
hereby without the consent of the Lessee and the Agent.
Section 5.16. Interest. It is the intention of the parties hereto to
conform strictly to usury Laws applicable to each Instrument Holder and the
Transactions. Accordingly, if the Transactions would be usurious as to any
Instrument Holder under Applicable Law, then, notwithstanding anything to the
contrary in the Instruments, this Agreement or in any other Transaction Document
or agreement entered into in connection with the Transactions, it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest or
current yield as to any Instrument Holder under Applicable Law that is
contracted for, taken, reserved, charged or received by any Instrument Holder
under the Instruments, this Agreement or under any of such other Transaction
Documents or agreements or otherwise in connection with the Transactions shall
under no circumstances exceed the maximum amount allowed by such Applicable Law,
(ii) in the event that the maturity of the Instruments is accelerated for any
reason, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest or current yield as to any Instrument
Holder under Applicable Law may never include more than the maximum amount
allowed by such Applicable Law, and (iii) interest or current yield, if any, in
excess of that permitted by Applicable Law provided for in this Agreement or
otherwise in connection with the Transactions shall be, subject to the following
provisions, canceled automatically and, if theretofore paid, shall be credited
by such Instrument Holder on the principal or stated amount of the Instruments
(or, to the extent that the principal or stated amount of the Instruments shall
have been or would thereby be paid in full, refunded by such Instrument Holder
to the party entitled thereto). If at any time the amount or rate of interest or
yield (as applicable) contractually called for in any Instrument or other
Transaction Document (as the same may vary from time to time pursuant to the
terms of such Instrument or other Transaction Document, the "Stated Rate")
exceeds the maximum amount of interest or yield allowed by Applicable Law in
respect of such Instrument or other Transaction Document, then the rate of
interest or yield to accrue on such Instrument or other Transaction Document
shall be limited to the maximum amount allowed by such Applicable Law, but any
subsequent reduction in the Stated Rate applicable to such Instrument or other
Transaction Document shall not reduce the interest or yield to accrue on such
Instrument or other Transaction Document below the maximum amount allowed by
such Applicable Law until the total amount of interest or yield on such
37
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
38
this Agreement prior to or at the time of, or after, the execution and delivery
thereof.
Section 5.20. Decisions of Parties. Except as expressly otherwise
provided herein, all opinions, approvals, decisions, and determinations are to
be in such party's discretion and need not be reasonable.
Section 5.21. Restructure of Transaction. Notwithstanding the
provisions of Section 13(b)(i)(B) or (C) of the Lease, in the event of the
occurrence of a change in GAAP or the interpretive rulings applicable
thereunder, or a change in SEC rulings and/or requirements, which in either case
requires the recharacterization of the Lease as a "capital lease" rather than an
"operating lease", Lessee may request that the transaction be restructured in a
manner that will maintain the economic interests of the parties and will permit
Lessee to continue to have the Lease treated as an "operating lease" for its
financial accounting purposes. If Lessee so requests, and Agent, CLI, all other
Purchasers, and the Majority Holders agree to such a restructure, then the
parties will proceed in good faith, but at Lessee's expense, to negotiate such
changes in the structure of the transaction and the Transaction Documents as the
parties may mutually determine to be necessary to effect such intention. While
the parties agree to cooperate in good faith to negotiate modifications to the
Transaction Documents to achieve operating lease treatment for the Lessee, no
party will be obligated to accept a restructure of the transaction and/or any
modification to any Transaction Document that is, in such party's opinion,
materially adverse to its legal or financial interest. In the event that the
parties are unable to agree to a restructuring or modification which is
acceptable to Lessee, Lessee shall be entitled to exercise the right set forth
in Section 13(b) of the Lease in accordance with the terms and conditions
therein contained.
Section 5.22. Construction of Agreement. Should any provision of this
Agreement require interpretation or construction in any judicial,
administrative, or other proceeding or circumstance, it is agreed that the
parties hereto intend that the court, administrative body, or other entity
interpreting or construing the same shall not apply a presumption that the
provisions hereof shall be more strictly construed against one party by reason
of the rule of construction that a document is to be construed more strictly
against the party who itself or through its agents prepared the same, it being
agreed that the agents of both parties hereto have fully participated in the
preparation of all provisions of this Agreement and all of the Transaction
Documents.
THIS WRITTEN TRANSACTION AGREEMENT, TOGETHER WITH THE OTHER
TRANSACTION DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
39
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 5.23. Brokers. Except to the extent of fees or other payments
specifically provided to be paid by Lessee under the Transaction Documents, each
party hereto shall pay or cause to be paid any and all valid claims of any
brokers or agents with whom such party has dealt who claim a right to any fees
or other compensation in connection with arranging the financing of the Property
provided hereby and shall indemnify, defend and hold all other parties hereto
harmless from such claims, whether or not they are valid.
Section 5.24. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, AND FOR THE PURPOSE OF REDUCING THE TIME AND EXPENSE OF
LITIGATION, THE PARTIES HERETO EACH WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT
ON, UNDER, OR BY VIRTUE OF THIS AGREEMENT, ANY OF THE TRANSACTION DOCUMENTS, OR
ANY OF THE TRANSACTIONS CONTEMPLATED OR GOVERNED THEREBY.
ARTICLE VI.
THE AGENT
---------
Section 6.01. Appointment.
------------
(a) The Purchasers and the Instrument Holders hereby designate
and appoint CLI as the initial administrative agent (herein "Agent") on behalf
of the Purchasers and the Instrument Holders, as applicable, under this
Agreement and the Transaction Documents. By its execution hereof CLI authorizes,
and by its execution of an Assignment Agreement and/or by its execution of a
supplement hereto becoming a Purchaser hereunder, each such additional Purchaser
and each such Instrument Holder hereby irrevocably authorizes the Agent to
perform the rights and obligations of the "Agent" hereunder and under the other
Transaction Documents. The Agent shall serve without compensation, except as
otherwise agreed in writing by the Lessee and the Majority Holders, but the
Agent shall be entitled to payment or reimbursement of its out-of-pocket
expenses incurred in the performance of its duties as provided for in the
applicable provisions of the Transaction Documents. Without limitation, to the
extent that any Transaction Document provides for the payment or reimbursement
of expenses incurred by the Purchasers or Instrument Holders, or any of them,
any such expenses incurred by the Agent in connection with such matters shall be
deemed to have been incurred by the Instrument Holders or Purchasers, as
applicable, and the Agent shall be entitled to the same reimbursement rights.
(b) In performing its functions and duties under this
Agreement, the Agent shall act solely as agent of the Purchasers or Instrument
Holders, as applicable (or in certain specified circumstances the Trustee), and
40
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.
41
(d) If the Agent seeks the consent or approval of the
Instrument Holders or Purchasers (either collectively or with respect to any
particular series of Instruments) to the taking or refraining from taking any
action hereunder, the Agent shall send written notice thereof to each Instrument
Holder or Purchaser, as the case may be (either collectively or as to the
affected series, as applicable) based on the most recent information known to
Agent with respect to such ownership as set forth in the Register maintained by
the Agent. The Agent shall promptly notify each Instrument Holder or Purchaser,
as applicable, at any time that the Majority Holders or Majority Purchasers, as
applicable, have instructed the Agent to act or refrain from acting in any
particular manner pursuant hereto. Upon request Agent shall supply a copy of the
Register to Lessee.
(e) Whenever this Agreement or any other Transaction Document
requires that the Agent take action at the direction of the Majority Holders of
the Instruments or any particular series of Instruments, or at the direction of
the Majority Purchasers, then prior to taking the action in question (including,
without limitation, prior to giving directions to the Trustee in connection
therewith), Agent shall seek direction from the Instrument Holders (or
applicable series thereof) or Purchasers, as applicable, and shall take actions
or give directions consistent with the desires of the Majority Holders (with
respect to the applicable series thereof) or the Majority Purchasers, as
applicable. Where this Agreement or the other Transaction Documents do not
require approval of the Majority Holders or Majority Purchasers with respect to
any particular action or direction, then Agent may, but need not, seek input
from the Instrument Holders or Purchasers as to the appropriate course of
action, but in the absence of any such direction Agent shall be free to take
such actions as Agent may deem appropriate and in the best interests of the
Instrument Holders (or the applicable series thereof) or Purchasers, as
applicable, as a whole. In the exercise of its powers and rights hereunder Agent
shall exercise the same care as it exercises with respect to similar
transactions entered into solely for its own account and shall otherwise have no
liability or responsibility to the Instrument Holders or Purchasers except for
actions taken by Agent in bad faith, actions which are grossly negligent, or
actions which constitute willful misconduct by the Agent.
(f) The Majority Holders (either of the Instruments as a
whole, or of the applicable series of Instruments) shall at any time have the
right to direct the Agent in the exercise of any rights or options that may then
be available to the Instrument Holders of the Instruments (or the applicable
series thereof), and upon receipt of any such direction Agent shall proceed in
the manner directed by the Majority Holders; provided, that in no event shall
Agent have any obligation to proceed in any manner that Agent in good faith
believes may expose Agent to any risk or obligation unless and until Agent has
been provided by the Instrument Holders with security satisfactory to Agent to
protect Agent with respect to the risk or obligation in question. Similarly, the
Majority Purchasers shall at any time have the right to direct the Agent in the
exercise of any rights or options that may then be available to the Purchasers,
and upon receipt of any such direction Agent shall proceed in the manner
42
directed by the Majority Purchasers; provided, that in no event shall Agent have
any obligation to proceed in any manner that Agent in good faith believes may
expose Agent to any risk or obligation unless and until Agent has been provided
by the Purchasers with security satisfactory to Agent to protect Agent with
respect to the risk or obligation in question.
(g) In its dealings with the Trustee, the Lessee, or the
Instrument Holders the Agent shall be protected in acting upon any written
notice, request, waiver, consent, certificate, receipt, authorization, power of
attorney, or other paper or document which Agent in good faith believes to be
genuine and what it purports to be.
(h) In the event of any good faith disagreement between any of
the parties to this Agreement resulting in adverse claims or demands being made
upon Agent, or if Agent, in good faith, is in doubt as to what action it should
take hereunder, Agent may, at its option, refuse to comply with any claims or
demands on it so long as such disagreement continues or such doubt exists, and
in any such event, Agent shall not be or become liable in any way or to any
person for its failure or refusal to act, and Agent shall be entitled to
continue so to refrain from acting until (i) the rights of all parties shall
have been fully and finally adjudicated by a court of competent jurisdiction or
(ii) all differences shall have been adjusted and all doubt resolved by
agreement among all of the interested persons and Agent shall have been notified
thereof in writing signed by all such persons. The rights of Agent under this
paragraph are cumulative of all other rights which it may have under law or
otherwise.
Section 6.03. Rights, Exculpation, etc. Neither the Agent nor any of
its Affiliates, officers, directors, employees, agents, attorneys or consultants
shall be liable to any Instrument Holder for any action taken or omitted by them
hereunder or under any of the Transaction Documents, or in connection herewith
or therewith, except that (i) the Agent shall be obligated on the terms set
forth herein for performance of its express obligations hereunder, and (ii)
Agent shall be liable to the Instrument Holders for damages caused by its gross
negligence in the discharge of its duties hereunder or its own willful
misconduct. The Agent shall not be responsible to any Instrument Holder for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectability, or
sufficiency of this Agreement, or any of the other Transaction Documents, or any
of the transactions contemplated hereby and thereby, or for the financial
condition of Lessee. The Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Transaction Documents or the
financial condition of Lessee, or the existence or possible existence of any
Incipient Default or Event of Default.
Section 6.04. Reliance. The Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Transaction Documents and its
duties hereunder or thereunder, upon advice of legal counsel, independent public
43
accountants and other experts selected by it. Lessee and Trustee shall be
entitled to rely upon any written notices, requests, waivers, consents,
receipts, authorizations, powers of attorney, statements, certificates, orders,
approvals, directions, or other documents or matters issued by or from Agent and
shall be entitled to give notices to, make requests of and otherwise deal solely
with Agent, as administrative agent for the Holders, the Purchasers and the
Trustee, as the case may be, except as expressly provided herein.
Section 6.05. Indemnification. To the extent that the Agent is not
reimbursed and indemnified by the Lessee in accordance with the express terms of
the Transaction Documents, or Lessee fails upon demand by the Agent to perform
its obligations to reimburse or indemnify the Agent, the Instrument Holders will
reimburse and indemnify the Agent for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent or in any way relating to or
arising out of this Agreement or any of the other Transaction Documents or any
action taken or omitted by the Agent under this Agreement or any of the other
Transaction Documents, in proportion to their respective proportions of the
principal amount of Notes and outstanding amounts of Certificates; provided that
no Instrument Holder shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. The obligations of the Instrument Holders under this Section shall
survive the discharge in full of the Instruments. If the Agent is or becomes a
Instrument Holder, the Agent shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Instrument Holder. The terms
"Instrument Holder" or "Majority Holder" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its individual
capacity as a Instrument Holder or one of the Majority Holders. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of banking, trust or other business with Lessee as if it were not
acting as Agent pursuant hereto.
Section 6.06. Successor Agent; Resignation of Agent.
--------------------------------------
(a) The Majority Holders may, at any time by written notice to
Lessee, Trustee, and the Agent then serving, designate a successor Agent, with
or without cause; provided, however, that so long as CLI has an outstanding
Commitment hereunder, the Agent shall not be removed, except for cause, without
the approval of CLI. For this purpose, "cause" shall mean the gross neglect by
Agent of its duties hereunder. Any such successor Agent shall have all rights,
powers, and duties assigned to the "Agent" hereunder from and after the
effective date of its appointment. Except in cases where the Agent is being
replaced as a result of a material default or dereliction of its duties by the
existing Agent, the effective date of the appointment of a successor Agent shall
be not less than thirty (30) days after the notice of appointment of the
successor Agent is given.
44
(b) The Agent may resign at any time upon written notice given
to the Lessee, the Trustee, and each Instrument Holder. The effective date of
the resignation shall be not less than sixty (60) days after the notice of
resignation is given. In the event of any such resignation by Agent, the
Majority Holders shall promptly appoint a successor agent and, if no successor
agent is so appointed within thirty (30) days thereafter the Agent shall be (i)
the Purchaser with the largest outstanding Commitment, or (ii) if no Commitment
remains outstanding hereunder, the Instrument Holder that holds the largest
aggregate amount of Instruments (measured by dollar amount).
(c) In the event of the appointment of a successor Agent
(whether as a result of the resignation of the previous Agent or otherwise), the
outgoing Agent shall reasonably cooperate with the successor Agent, the Trustee,
the Purchasers, Lessee, and the Instrument Holders to provide for a smooth
transition of the function of the Agent hereunder. Any books and records of the
outgoing Agent relating to its service as Agent hereunder (but not books and
records relating to any Instruments that the outgoing Agent may hold for its own
account) shall be turned over to the successor Agent.
Section 6.07. Authorization to Act as Agent of Trustee. In addition,
the Trustee hereby appoints and authorizes the Agent to collect, disburse,
invest and otherwise administer on the Trustee's behalf all funds paid or
payable to the Trustee hereunder or under any of the Transaction Documents, in
each case, in accordance with the terms hereof and thereof, and the Trust
Company, in its individual capacity, shall not be liable for the actions or
inactions of the Agent in connection with the Agent's collection, disbursement,
investment and administration of such funds. As to any matters not expressly
provided for by this Agreement or the other Transaction Documents, the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority
Purchasers or the Majority Holders, and such instructions shall be binding upon
all Purchasers or Holders, as applicable; provided, however, that the Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or applicable Law.
IN WITNESS WHEREOF, intending to be legally bound hereby, the
parties have caused this Agreement to be duly executed on the attached Signature
Pages by their respective officers thereunto duly authorized as of the day and
year first above written.
[SEE ATTACHED SIGNATURE PAGES]
45
SIGNATURE PAGE OF LESSEE AND LESSEE PARENT
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
LESSEE AND LESSEE PARENT:
-------------------------
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation
By________________________________________
Name:_____________________________________
Title:____________________________________
46
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
TRUSTEE:
--------
STATE STREET BANK AND TRUST
COMPANY, a Massachusetts
trust company (not in its
individual capacity, but
solely as Trustee)
By________________________________________
Name:_____________________________________
Title:____________________________________
TRUST COMPANY:
--------------
STATE STREET BANK AND TRUST
COMPANY, a Massachusetts
trust company (in its
individual capacity, but
only as expressly stated
herein)
By________________________________________
Name:_____________________________________
Title:____________________________________
47
SIGNATURE PAGE OF CLI,
AS AGENT, PURCHASER AND INSTRUMENT HOLDER
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
AGENT, PURCHASER and
INSTRUMENT HOLDER:
--------------------
CITICORP LEASING, INC.,
a Delaware corporation
By________________________________________
Name:_____________________________________
Title:____________________________________
48
SIGNATURE PAGE OF BANK OF MONTREAL,
AS PURCHASER AND INSTRUMENT HOLDER
ATTACHED TO
TRANSACTION AGREEMENT
(1997 PEP BOYS II LEASED PROPERTY)
PURCHASER and INSTRUMENT HOLDER:
--------------------------------
BANK OF MONTREAL
By________________________________________
Name:_____________________________________
Title:____________________________________
49
SCHEDULE 1
Certain Definitions
As used herein, the following terms have the meanings indicated:
"A-Note" means any of, and "A-Notes" means all of, the Series A Trust
Notes, due on the Maturity Date issued and, unless otherwise specified or the
context otherwise requires, outstanding under the Declaration of Trust.
"Acquisition Price" shall have the meaning provided therefor in Exhibit
A attached to the Lease.
"Advance" and "Advances" shall have the meaning provided therefor in
Section 1.01(c).
"Affiliate" means a Person directly or indirectly, through one or more
intermediaries, controlling, controlled by, or under common control with the
Person in question. The term "control," as used in the immediately preceding
sentence, means, with respect to a Person that is a corporation, the right to
exercise, directly or indirectly, more than ten percent (10%) of the voting
rights attributable to the shares of the controlled corporation and, with
respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of the controlled Person.
"Agent" means the administrative agent for the Instrument Holders and
Purchasers appointed from time to time under this Agreement. CLI is the initial
Agent appointed under this Agreement.
"Agreement" means this Transaction Agreement, as it may be amended,
modified, supplemented, renewed, extended, and/or restated, from time to time,
it being acknowledged and agreed that the parties may elect, by mutual
agreement, to amend this Agreement to increase the amount of Advances available
to Trustee hereunder, but expressly acknowledging that Purchasers have not
agreed, and have no obligation whatsoever to do so under any circumstances.
"Applicable Rate" shall have the meaning provided therefor in the
Lease.
"Approved Purposes" means (i) the purchase price paid by Trustee from
time to time to acquire portions of the Property, (ii) amounts advanced from
time to time by Trustee to Lessee in respect of Construction Advances
(including, without limitation, Interim Advances) under the Lease, and (iii)
reasonable costs and expenses incurred in connection with the purchase of the
Property and/or the closing of the transactions contemplated hereby from time to
time, all as properly substantiated to, and approved by, Agent.
"B-Note" means any of, and "B-Notes" means all of, the Series B Trust
Notes, due on the Maturity Date, issued and, unless otherwise specified or the
context otherwise requires, outstanding under the Declaration of Trust.
"Bankruptcy Code" means Title 11 of the United States Code, as amended
from time to time.
"Break Costs" shall mean an amount equal to the amount (if any)
required to compensate any Instrument Holder for any additional losses
(including, without limitation, any loss (excluding loss of anticipated
profits), cost or expense incurred by reason of the liquidation or reemployment
of deposits or funds acquired by such Instrument Holder to fund or maintain any
Instrument) it may reasonably incur as a result of the payment of the principal
balance of a Note or the stated amount of a Certificate, as applicable, on any
date other than a Payment Date.
"Business Day" means every day on which banks in the Cities of New
York, New York, Chicago, Illinois, Boston, Massachusetts, and Philadelphia,
Pennsylvania, are open for business and are not required to be closed.
"Certificate" means any of, and "Certificates" means all of, the Series
C Trust Certificates, due on the date of the expiration or termination (for any
reason) of the Lease, issued, and unless otherwise specified or the context
otherwise requires, outstanding under the Declaration of Trust.
"Certificate Holder" means any of, and "Certificate Holders" means all
of, the Holders from time to time of the Certificates.
"Certificate Rate" means, with respect to each Certificate or an
applicable portion thereof and with respect to each day during an Interest
Period, a rate per annum determined for such day equal to the LIBO Rate, plus
the Spread applicable to such Certificate or portion thereof.
"Commitment" means, with respect to a Purchaser, the amount of such
Purchaser's commitment to make Advances pursuant to Section 1.01 of this
Agreement. In the case of the original Purchasers the amount of their respective
Commitments is specified in subsections 1.01(a) and (b) hereof; in the case of
any subsequent Purchaser(s) the amount of its Commitment shall be specified as
provided for in subsections 1.01(f) and (g) hereof.
"Construction Advance" and "Construction Advances" shall have the
meanings provided therefor in Section 1.01(d) hereof.
"Construction Supplement" and "Construction Supplements" shall have the
meanings provided therefor in Section 1.01(d) hereof.
"Debt Rating" means, as of any date, the then current rating issued by
Standard & Poor's Corporation for Lessee's senior unsecured debt, or if Lessee
then has no senior unsecured debt rated by Standard & Poor's Corporation, such
other rating (including, without limitation, a rating issued by another rating
service if any such rating is then available or a rating determined by the
internal analysts of Agent or an Affiliate of Agent) as Agent may deem most
closely corresponds thereto.
"Debtor Relief Laws" means the Bankruptcy Code and all other applicable
liquidation, conservatorship, bankruptcy, moratorium, rearrangement,
receivership, insolvency, reorganization, suspension of payments, or similar
debtor relief Laws from time to time in effect affecting the Rights of creditors
generally.
"Declaration" or "Declaration of Trust" means that certain Declaration
of Trust of even date herewith executed by Trustee with respect to the Property
and the Transactions contemplated hereby, as amended, restated, supplemented, or
otherwise modified from time to time.
"Default Rate" means the lesser rate per annum of (i) two percent (2%)
in excess of the effective prime interest rate quoted by Citibank, N.A., from
time to time in effect as its base or reference rate for short-term floating
rate commercial loans (whether or not such rate is actually charged in any
particular instance), or (ii) the Maximum Rate.
"Environmental Indemnity Agreement" means collectively that certain
Environmental Indemnity Agreement of even date herewith executed by Lessee (and
the other lessees under the Lease) for the benefit of Trustee, Agent and the
Instrument Holders, as amended, restated, supplemented, or otherwise modified
from time to time.
"Event of Default" has the meaning given thereto in the Lease.
"Fee Letter" means that certain letter dated January 10, 1997, from
Trust Company to Lessee describing certain costs and charges to be paid to Trust
Company in connection herewith.
"Hold Position" has the meaning provided therefor in Section 1.01(a)
hereof.
"Holder" has the same meaning as "Instrument Holder."
"Improvements" has the meaning provided therefor in the Preliminary
Statement hereof.
"Increased Costs" means any additional amounts required to be paid to
any Instrument Holder to compensate such Instrument Holder for any increased
costs of maintaining the Instrument (the effect of which is not included in the
applicable Instrument Holder's determination of such costs at the more recent to
occur of the original issuance of such Instrument or the adjustment of the Note
Rate or Certificate Rate applicable to such Instrument or applicable interest
therein in connection with the Secondary Transaction (as defined in the Lease)
as a result of the implementation after the date hereof of any applicable Law
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Instrument Holder (or any lending office thereof)
with any request or directive regarding capital adequacy (whether or not having
the force of Law) of any such authority, central bank or comparable agency which
has the effect of increasing the amount of capital required or expected to be
maintained as a result of its maintaining the Instrument.
"Instrument" means any of, and "Instruments" means all of,
collectively, the Notes and the Certificates.
"Interim Advance" and "Interim Advances" shall have the meanings
provided therefor in Section 1.01(d) hereof.
"Interim Supplement" and "Interim Supplements" shall have the meanings
provided therefor in Section 1.01(d) hereof.
"Instrument Holder" or "holder" when used with respect to any
Instrument(s), means the Person whose name appears on the Register as the
registered owner of such Instrument(s) or the registered assigns of a portion of
an Instrument, as applicable. It is acknowledged that each Purchaser shall be an
Instrument Holder for all purposes hereof (until such time as it has disposed of
all of its Instruments) and entitled to the benefit of all provisions hereof
respecting the Instrument Holders, in addition to and not in lieu of, its rights
as the Purchaser hereunder.
"Interest Period" means, as applicable to an Instrument, (i) the period
commencing on the date of the first Advance under such Instrument through the
day immediately preceding the first Payment Date, or (ii) the period commencing
on any Payment Date through the day immediately preceding the next Payment Date.
"Law" or "Laws" means, either singularly or collectively, as
applicable, all applicable statutes, laws, ordinances, regulations, orders,
writs, injunctions, decisions, opinions or decrees of any governmental authority
or any Tribunal.
"Lease" means, collectively, that certain Master Lease of even date
herewith, executed by Trustee, as lessor, and Lessee, as lessee, covering
portions of the Property, together with such supplements or amendments thereto
as may be executed from time to time by Lessee (or any Additional Lessees) and
Trustee and approved by Agent, including, without limitation, supplements
thereto adding Parcels to the Property or "Additional Lessees" as a party to the
Lease.
"Lease Guarantee" means that certain Lease Guarantee of even date
herewith executed by Lease Guarantor with respect to the Lease, as amended,
restated, supplemented, or otherwise modified from time to time.
"Lease Guarantor" means The Pep Boys - Manny, Moe & Xxxx, a
Pennsylvania corporation.
"Lessee" means The Pep Boys - Manny, Moe & Xxxx, a Pennsylvania
corporation, its permitted successors and assigns. For purposes of this
Agreement any other Person that is a party to the Lease shall not be treated as
"Lessee" unless the context otherwise requires.
"Lessee's Equipment" shall have the meaning given to such term in the
Lease.
"LIBO Business Day" means a day of the year on which dealings are
carried on in the London interbank market and banks are open for business in
London and not required or authorized to close in New York City.
"LIBO Rate" for each Interest Period means an interest rate per annum
equal to the average (rounded, if necessary, to the next highest 1/16 of 1%) of
the rates of interest per annum at which deposits in United States dollars are
offered to prime banks in the London interbank market at 11:00 a.m. (London
time) two LIBO Business Days before the first day of such Interest Period (the
"LIBO Rate Setting Date") for a period equal to such Interest Period.
"LIBO Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable to the Instrument Holders during such Interest
Period under the regulations issued from time to time by the Board of Governors
of the Federal Reserve System (or if more than one such percentage is so
applicable, the daily average for such percentages for those days in such
Interest Period during which any such percentages shall be so applicable) for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental to other marginal reserve requirement) for Instrument
Holders in respect of liabilities or assets consisting of or including
Eurocurrency Liabilities (as defined in Regulation D of the Board of Governors
of Federal Reserve System as in effect from time to time) having a term equal to
such Interest Period.
"Lien" means any lien, mortgage, security interest, pledge, charge,
easement or encumbrance (excluding any transfer, assignment, or sublease
permitted under Section 17 of the Lease, or any lien on Lessee's Equipment) of
any kind, including, without limitation, a mechanic's lien, a materialman's
lien, the rights of a vendor, lessor, or similar party under any conditional
sales agreement or other title retention agreement or lease substantially
equivalent thereto, any production payment, and any other right of or
arrangement with any creditor to have his claim satisfied out of any property or
assets, or the proceeds therefrom, prior to the general creditors of the owner
thereof.
"Litigation" means any proceeding, claim, and/or lawsuit conducted by
or before any Tribunal.
"Majority Holders" means: (i) with respect to any series of
Instruments, the registered Holders of at least sixty-six and two-thirds percent
(66-2/3%) in aggregate principal or stated amount of such series of Instruments
then outstanding; and (ii) with respect to more than one series of Instruments,
the registered Holders of at least sixty-six and two-thirds percent (66-2/3%) of
the total aggregate principal and stated amounts of such series of Instruments
then outstanding.
"Majority Purchasers" means the Purchaser(s) whose aggregate
outstanding Commitment at any relevant time is at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate outstanding Commitments of all Purchasers.
"Master Schedule" shall have the meaning provided therefor in the
Declaration of Trust.
"Maturity Date" shall mean August 31, 2003.
"Maximum Rate" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on any Note, Certificate, or other applicable obligation, as
the case may be, under the Law of the State of Pennsylvania, or, if Pennsylvania
Law is pre-empted thereby, the Law of the United States of America applicable to
the Holders and the Transactions that would permit Holders to lawfully contract
for, charge, take, reserve or receive a greater amount of interest than that
permitted under Pennsylvania Law.
"New Improvements" shall have the meaning provided therefor in the
Lease.
"Note" means any of, and "Notes" means all of, collectively, the
A-Notes and the B-Notes outstanding under the Declaration of Trust.
"Note Rate" means, with respect to each Note or an applicable portion
thereof and with respect to each day during an Interest Period, a rate per annum
determined for such day equal to the LIBO Rate, plus the Spread applicable to
such Note or portion thereof.
"Noteholders" means, in the aggregate, the Holders at the time in
question of all of the Notes then outstanding (or, if applicable, the series of
Notes in question).
"Outside Funding Date" has the meaning provided therefor in Section
1.05(e) hereof.
"Parcels" means any tracts or parcels of real property that may
hereafter be added to the Property, together with any and all structures,
buildings, fixtures, or other improvements from time to time located thereon and
any and all appurtenances thereto; provided, that such term does not include
Lessee's Equipment or any other trade fixtures, inventory, or other items of
personal property located on such parcels that are owned by any other Person
other than Trustee. Nothing in the foregoing definition or applicable provisions
of this Agreement shall be deemed to limit or restrict Lessee's rights to
demolish improvements located on Parcels at the time such Parcel is added to the
Property in connection with the construction of New Improvements on the Parcel,
to the extent permitted by the express terms of the Lease.
"Payment Date" means the first day of each calendar month to and
including the month in which the Maturity Date falls, as well as the Maturity
Date itself; provided, however, that if such Payment Date is not a Business Day,
such Payment Date shall be the next succeeding Business Day.
"Pep Boys I Facility" means that certain asset defeasance lease
facility created pursuant to that certain Transaction Agreement dated November
13, 1995, by and among Lessee, Trustee and CLI, that certain Declaration of
Trust dated November 13, 1995, executed by Trustee, and that certain Master
Lease dated November 13, 1995, by and between Trustee and Lessee.
"Percentage" means, relative to any Purchaser and any series of
Instruments, the percentage equal to the ratio of such Purchaser's Commitment in
respect of that series of Instruments to the total Commitments of all Purchasers
in respect of that series of Instruments.
"Permitted Encumbrances" shall have the meaning provided therefor in
the Lease.
"Person" means any individual, firm, corporation, association,
partnership, joint venture, other entity, or Tribunal.
"Plans" shall have the meaning provided therefor in the Lease.
"Property" shall have the meaning provided therefor in the Lease.
"Purchaser" means any Person having a Commitment hereunder.
"Reserve Costs" means, so long as Instrument Holders hereafter shall be
required under regulations of the Board of Governors of the Federal Reserve
System to maintain reserves in excess of those maintained at the more recent to
occur of the original issuance of the applicable Instrument or the adjustment of
the Note Rate or Certificate Rate applicable to such Instrument or the
applicable interest therein in connection with the Secondary Transaction with
respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional amounts equal to the product of (1) the outstanding
balance of the Instruments, multiplied by (2) an interest rate per annum equal,
at all times during the period in which such reserves were assessed, to the
remainder obtained by subtracting (a) the LIBO Rate for such Interest Period
from (b) the rate obtained by dividing such LIBO Rate applicable during such
Interest Period by a percentage equal to 100% minus the applicable LIBO Rate
Reserve Percentage, payable on each Payment Date.
"Rights" means rights, remedies, powers, and privileges.
"Securities Act" means the Securities Act of 1933, as amended.
"Spread" shall be either (A) in the case of the Certificates, 225 basis
points, or (B) in the case of the A-Notes and the B-Notes, the number of basis
points determined by reference to the following chart, based on the Debt Rating
of Lessee as of the beginning of the applicable Interest Period:
Lessee's Most Recent
Debt Rating Spread
-------------------- ------
BBB+ (or higher) 37.5 basis points (0.375%)
BBB 42.5 basis points (0.425%)
BBB- 52.5 basis points (0.525%)
less than BBB- 75.0 basis points (0.75%)
"Taxes" means all taxes, assessments, fees, levies, impositions,
duties, deductions, withholdings, or other charges of any nature whatsoever from
time to time or at any time imposed by any Laws or by any Tribunal as well as
any other item included within the term "Impositions" under the Lease.
"Term" shall have the meaning provided therefor in the Lease.
"Title Company" means one or more title insurance companies reasonably
acceptable to Agent which shall issue the Title Policies.
"Title Policies" means, collectively, (A) one or more Owner's Title
Insurance Policies (collectively, the "Owner's Title Policy") issued to Trustee
by the Title Company, in the aggregate amount of the Advances hereunder,
insuring that Trustee owns fee simple title to the Property, subject to no
exceptions other than the Permitted Encumbrances, and (B) one or more Mortgagee
Title Insurance Policies (collectively, the "Mortgagee Title Policy") issued to
Agent (for the benefit of the Noteholders) by the Title Company, in the
aggregate amount of the Notes issued hereunder, insuring that the Transaction
Mortgage is a first mortgage lien on fee simple title to the Property subject to
no exceptions other than the Permitted Encumbrances. Each of the Owners Title
Policy and the Mortgagee Title Policy shall provide such other coverages as
Agent may reasonably require and as may be available from time to time. The
parties acknowledge that the Title Policies will be a series of separate
policies in the aggregate required amount, with such separate policies providing
coverage in the amount of the respective Acquisition Prices (in the case of the
Owner's Title Policy) or the relevant Note amounts attributable to the Parcels
covered (in the case of the Mortgagee Title Policy) of the respective Parcels of
Property from time to time subject to this Agreement. The term "Title Policy"
shall include any endorsements to previously issued title insurance policies
that the Purchaser may deem appropriate in connection with any Advance, and any
endorsements that Lessee may cause to be provided to insure over title problems
that can not be removed where Lessee is permitted to do so under the terms of
the Lease or this Agreement.
"Transaction Documents" means this Agreement, the Lease, the Lease
Guarantee, the Declaration of Trust, the Environmental Indemnity Agreement, the
Instruments and any and all other agreements, documents, and instruments
executed and delivered to or for the benefit of Trustee, Purchasers, or
Instrument Holders by pursuant to the terms of, or otherwise in connection with,
this Agreement, and any future amendments hereto or restatements hereof, or
pursuant to the terms of any of the other Transaction Documents, together with
any and all renewals, extensions, and restatements of, and amendments and
modifications to, any of the foregoing.
"Transaction Mortgage" means one or more mortgages, deeds of trust,
deeds to secure debt, or similar security instruments executed by Trustee and
granting to Agent, for the benefit of the Noteholders (but not the Certificate
Holders), a first mortgage lien on the Property and each Parcel thereof. The
Transaction Mortgage shall, as to each Parcel, be in form and substance
acceptable to Agent and shall be subject to no liens or encumbrances other than
the Permitted Encumbrances.
"Transactions" means the transactions provided for in and contemplated
by this Agreement and the other Transaction Documents.
"Tribunal" means court, department, commission, board, bureau, agency,
or instrumentality of any governmental authority.
"Trust Estate" shall have the meaning provided therefor in the
Declaration of Trust.
SCHEDULE 2
Underwriting Guidelines
1. TITLE MATTERS.
--------------
1.1 The title insurance required by Agent and Trustee for any Parcel
shall be that which is customary in the jurisdiction in which the Parcel is
located for institutional investors and lenders in large commercial
transactions. Agent and Trustee shall be reasonable in negotiating and agreeing
to title insurance coverage.
1.2 Reinsurance or coinsurance will not be required if (1) the amount
to be insured for the Parcel, following completion of all Improvements, is less
than $ 4,000,000.00 and (2) one of the following title insurance companies is
the title insurer: Chicago Title Insurance Corporation (or one of its wholly
owned affiliates, such as TICOR or Safeco), Commonwealth Land Title Insurance
Corporation, First American Title Insurance Corporation, Lawyers Title Insurance
Corporation, Old Republic/Minnesota or Xxxxxxx Title (any of the foregoing being
an "Acceptable Insurer"). Agent and/or Trustee shall have the right to remove
any title insurer from the above list at any time hereafter with respect to
closings on Parcels not then acquired, based on its reasonable determination
that such title insurer's financial rating has been reduced to an unacceptably
low level.
1.3 In the event that any mechanics' lien, suppliers' lien, or similar
lien is placed against any Parcel, Lessee shall have the right to satisfy Agent
and/or Trustee with respect to such lien by, among other means, providing Agent
and/or Trustee with affirmative title insurance coverage over such lien
delivered by an Acceptable Insurer which is insuring the Parcel in question.
2. ENVIRONMENTAL REPORTS.
----------------------
2.1 Each environmental report shall be addressed to Agent, Trustee and
Lessee, as follows:
"To Citicorp Leasing, Inc. ("Agent"), for itself and in its
capacity as Agent for the Purchasers and Instrument Holders
under the Transaction Agreement dated __________, 1997, among
Agent, Trustee (as defined below), The Pep Boys - Manny, Moe
and Xxxx, a Pennsylvania corporation (the "Transaction
Agreement"), State Street Bank and Trust Company, as Trustee
under the Declaration of Trust dated __________, 1997
("Trustee") and [insert proper Pep Boys entity]"
2.2 A reference in an environmental report to the existence of
asbestos, PCBs, lead paint or other hazards located within a building or other
structure that is intended to be demolished or substantially renovated and
improved, shall not be regarded as an impediment to going forward with the
transaction, or to the acquisition of the Parcel by the Trustee, or the funding
of any Advance, so long as (1) prior to the acquisition of the Parcel in
question, Lessee demonstrates to the reasonable satisfaction of Agent and
Trustee that the plans for the demolition and/or improvement of the Parcel
include provisions satisfactory to Agent and Trustee for the removal, abatement
and proper disposal of such materials, in accordance with all applicable Laws,
and (2) prior to the Construction Advance for any such Parcel, Lessee provides
Agent and Trustee with evidence of such removal, abatement and disposal, and for
payment therefor.
2.3 Nothing in the foregoing shall require Agent or Trustee to accept a
Parcel with respect to which the environmental report shows evidence of
underground or soil hazards, such as underground tanks, soil or groundwater
contamination or other problems requiring remediation.
3. SURVEY.
-------
3.1 The survey shall, at a minimum, satisfy the following
requirements unless otherwise approved by Agent:
3.1.1 The surveyor should perform all necessary field work,
field-stake the property, and supply a current plat of survey (the
"Survey") of the property.
3.1.2 Without limitation of other applicable requirements, the
Survey must:
(i) Set forth an accurate metes and bounds
description of the land, as well as a lot/block description
if the property is platted;
(ii) Locate all existing easements (setting forth
recording information with respect to recorded easements and
locating recorded easements per the legal description
contained therein), alleys, streets, and roads;
(iii) Show any encroachments on to the land from any
adjacent property, any encroachments from the land on to
adjacent property, and any encroachments into any easement or
restricted area within the boundaries of the land;
(iv) Locate all existing improvements (such as
buildings, power lines, fences, and the like);
(v) Locate all dedicated public streets or other
roadways providing access to the land, including all curb
cuts;
(vi) Locate all governmental or privately required
setback lines and similar restrictions affecting the land or
any part thereof and any violations of such restrictions; and
(vii) Set forth the gross square foot area of the
land, together with the net square foot area of the land which
shall be the gross square foot area of the land less any area
of the land located within (A) streets or roadways, or (B)
encroachments, overlaps, or strips, gores or other areas
affected by discrepancies in legal descriptions.
3.2 The Survey should contain a certification with regard to the
matters set forth thereon substantially as follows:
"The undersigned Registered Public Surveyor (the "Surveyor")
hereby certifies that (a) this plat of survey and the property
description set forth hereon are true and correct and prepared
from an actual on-the-ground survey of the real property (the
"Property") shown hereon; (b) such survey was conducted by the
Surveyor, or under his supervision; (c) all monuments shown
hereon actually exist, and the location, size and type of
material thereof are correctly shown; (d) except as shown
hereon, there are no encroachments onto the Property or
protrusions therefrom, there are no improvements on the
Property, there are no visible easements or rights-of-way of
the Property and there are no visible discrepancies,
conflicts, shortages in area or boundary line conflicts; (e)
the size, location and type of improvements are as shown
hereon (including, without limitation, the parking lots and
other parking areas indicating the number of parking spaces
within each), and, except as shown hereon, all are located
within the boundaries of the Property and set back from the
Property lines the distances indicated; (f) the distance from
the nearest intersecting street or road is as shown; (g) the
Property has access to and from a public roadway; (h) except
as shown hereon all recorded easements have been correctly
platted hereon; (i) the boundaries, dimensions and other
details shown hereon are true and correct; and (j) except as
shown hereon the Property is not located in a 100-Year Flood
Plain or in an identified "flood prone area", as defined by
the U. S. Department of Housing and Urban Development,
pursuant to the Flood Disaster Protection Act of 1973, as
amended.
"The undersigned does further certify that the survey was made
in accordance with the "Minimum Standard Detail Requirements
of the ALTA/ACSM Land Title Surveys, jointly established by
ALTA and ACSM in 1992, and includes items 1, 2, 3, 4, 6, 7(a),
8, 9, 10, and 13 of Table A thereof, and is prepared to the
ALTA/ACSM accuracy standards (as adopted and in effect on the
date of this certification) of an Urban Survey.
"The Surveyor expressly understands and agrees that (a)
("Title Company"), Citicorp Leasing, Inc. ("Agent"), for
itself and in its capacity as Agent for the Purchasers and
Instrument Holders under the Transaction Agreement dated
___________, 1997, among Agent, Trustee (as defined below),
The Pep Boys - Manny, Moe and Xxxx, a Pennsylvania corporation
(the "Transaction Agreement"), State Street Bank and Trust
Company, as Trustee under the Declaration of Trust dated
_________, 1997 ("Trustee"), and [insert proper Pep Boys
entity] are entitled to rely on this plat of survey as being
true and accurate in all respects and this Certificate as
being true and accurate; and (b) the consideration paid to the
Surveyor for the preparation and certification of such survey
has been paid, in part, in anticipation of such reliance
hereon.
EXECUTED this ____ day of _____________, 19__.
__________________________________________
By:_______________________________________
Registered Public Surveyor No.____________
Address: ________________________________
________________________________
________________________________
[S E A L]"
3.3 Specific matters reflected on a survey meeting the standards set
forth above shall be subject to Agent's reasonable review and approval, such
review and approval to be exercised in light of the effect of the specific
matters in question on the value (to the extent that the appraisal of the Parcel
in question does not specifically reflect the effect on value of the matter in
question), utility, and marketability of the Parcel in question.
4. APPRAISAL.
----------
4.1 The Appraisal shall be addressed as set forth for the environmental
report described above in paragraph 2.1
4.2 The appraiser shall be satisfactory if he/she is an MAI appraiser
with at least five years of experience in appraising similar properties to the
Parcel in the geographic area of the Parcel.
EXHIBIT "A"
Form of Assignment Agreement
----------------------------
Dated ________________, ____
Reference is made to the Transaction Agreement, dated as of
____________, 1997 (as the same may hereafter be amended or otherwise modified
from time to time, the "Transaction Agreement"), by and among THE PEP BOYS -
MANNY, MOE & XXXX, a Pennsylvania corporation ("Lessee"), CITICORP LEASING,
INC., a Delaware corporation (as Agent, Purchaser and Instrument Holder), BANK
OF MONTREAL, as Purchaser and Instrument Holder, and STATE STREET BANK AND TRUST
COMPANY, a Massachusetts trust company ("Trustee"), pursuant to the Declaration
of Trust ("Declaration of Trust") of even date with the Transaction Agreement
executed by Trustee.
________________________ , a ____________________ ("Assignor") is the
Holder of certain Instruments issued by the Trustee under the Trust Declaration
and desires to assign such Instruments to ____________________________, a
_________________________ ("Assignee"). Certain terms defined in the Transaction
Agreement are used herein with the same meaning.
The Assignor and Assignee agree as follows:
(a) The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
without recourse to the Assignor, the Instruments listed on Schedule 1 attached
hereto (the "Assigned Instruments"), together with all of Assignor's rights as
an Instrument Holder under the Transaction Agreement and the Transaction
Documents as of the Effective Date (as defined below) with respect to Assigned
Instruments (the Assigned Instruments, plus all of Assignor's rights with
respect thereto being referred to as the "Assigned Interest"). The effective
date of this sale and assignment shall be the date specified on Schedule 1
hereto (the "Effective Date"). [IF LESS THAN WHOLE INSTRUMENT IS TO BE ASSIGNED,
MODIFY ACCORDINGLY].
(b) It is expressly acknowledged that Assignor does not hereby assign
to Assignee, and Assignee does not hereby assume from Assignor, any of
Assignor's obligations as a "Purchaser" under the Transaction Documents to
purchase additional Instruments thereunder in connection with any Advance.
[DELETE IF THE ASSIGNOR IS NOT A PURCHASER UNDER THE TRANSACTION AGREEMENT.]
(c) On the Effective Date, the Assignee will pay to the Assignor, in
same day funds, at such address and account as the Assignor shall advise the
Assignee, the sum of $___________. From and after the Effective Date, the
Assignor agrees that the Assignee shall be entitled to all rights, powers and
privileges of the Assignor under the Transaction Agreement, the Transaction
Documents and the Instruments to the extent of the Assigned Interest, including
without limitation (i) the right to receive all payments in respect of the
Assigned Interest for the period from and after the Effective Date, whether on
account of principal or stated amount, interest or current yield, fees,
indemnities in respect of claims arising after the Effective Date, Increased
Costs, Break Costs, or otherwise; (ii) the right to vote and to instruct the
Agent and/or the Trustee under the Transaction Documents based on the Assigned
Interest; and (iii) the right to receive notices, requests, demands and other
communications. The Assignor agrees that it will promptly remit to the Assignee
any amount received by it in respect of the Assigned Interest (whether from the
Lessee, the Trustee, the Agent, or otherwise) in the same funds in which such
amount is received by the Assignor.
(d) The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the Assigned Interest and that such interest is free and
clear of any adverse claim; (ii) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Transaction Agreement, the Instruments or the
Transaction Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Transaction Agreement, the Instruments,
the Transaction Documents or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Lessee or the performance or
observance by the Lessee of any of its obligations under the Transaction
Agreement, the Instruments, the Transaction Documents or any other instrument or
document furnished pursuant thereto.
(e) Assignor hereby authorizes and requests that Trustee issue New
Notes or New Certificates, as applicable, pursuant to Section 3.08 of the
Declaration of Trust, in the name of Assignee (but at the expense of Assignee)
to replace the Assigned Instruments endorsed herewith in accordance with the
terms of the Declaration of Trust. Further, if the Assigned Interest represents
less than all of the indebtedness or equity evidenced by the Instrument in
question, Assignor also hereby requests that Trustee issue to Assignor a New
Note or New Certificate, as applicable, in the amount of $ , representing the
portion of the Instrument not assigned herein by Assignor.
(f) The Assignee (i) acknowledges that it has received a copy of the
Transaction Agreement, together with such financial information or other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment; (ii) agrees that it will,
independently and without reliance upon the Trustee, the Assignor or any other
Instrument Holder and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Transaction Agreement, the Instruments and the other
Transaction Documents; (iii) assumes and agrees to perform in accordance with
their terms all of the obligations which by the terms of the Transaction
Agreement, the Instruments and the other Transaction Documents are required to
be performed by an Instrument Holder and which arise subsequent to the date
hereof; (iv) specifies as its administrative offices (and address for notices)
the offices set forth beneath its name on the signature pages hereof; (v)
represents and warrants to Lessee, Trustee and Agent that the representations
and warranties applicable to a "Holder" pursuant to Section 2.03 of the
Transaction Agreement are true and correct as to the Assignee as of the date
hereof; and (vi) attaches the forms prescribed by the Internal Revenue Service
of the United States of America certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Transaction
Agreement (and the other Transaction Documents) or such other documents as are
necessary to indicate that all such payments are subject to such rates at a rate
reduced by an applicable tax treaty. Further, Assignee acknowledges that it is
not relying upon any statements of Lessee regarding its financial condition or
that of any of its subsidiaries except to the extent of financial reports and
related information provided by Lessee to Agent pursuant to the Transaction
Documents or in connection with the negotiation and execution thereof.
(g) Following the execution of this Assignment, it will be delivered to
the Agent for acceptance and recording by the Agent in the Register. Upon such
acceptance and recording and receipt of any consent of the Lessee required
pursuant to the Transaction Documents, as of the Effective Date, (i) the
Assignee shall be a party to the Transaction Agreement and, to the extent
provided in this Transaction Assignment, have the rights and obligations of an
Instrument Holder thereunder and under the Instruments and the Transaction
Documents and (ii) the Assignor shall, to the extent provided in this
Assignment, relinquish its rights and be released from its obligations under the
Transaction Agreement, the Instruments and the Transaction Documents. Nothing
herein shall release Assignor from any remaining obligations that Assignor may
have as a Purchaser (if Assignor is a Purchaser) under the Transaction
Documents, nor shall this Assignment release Assignor from, nor reduce
Assignor's rights with respect to or relating to, any other Instruments that
Assignor may continue to hold or may hereafter acquire.
(h) Upon such acceptance, recording and consent, from and after the
Effective Date, Trustee shall make all payments under the Transaction Documents
in respect of the Assigned Interest (including, without limitation, all payments
of principal, interest or current yield) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Transaction Documents for periods prior to the Effective Date directly between
themselves.
(i) By its execution hereof Assignee acknowledges that Citicorp
Leasing, Inc. is the currently appointed "Agent" for the Instrument Holders and
Purchasers under the terms of the Transaction Documents, and that Assignee is
acquiring the Instruments subject to the rights (and, where applicable) the
obligations of the Agent or any successor Agent that may hereafter be appointed
pursuant to the Transaction Agreement.
(j) This Assignment shall be governed by, and construed in accordance
with, the laws of the State of Massachusetts.
IN WITNESS WHEREOF, intending to be legally bound hereby, the parties
hereto have caused this Assignment to be executed by their respective officers
thereunto duly authorized on the attached Signature Pages, as of the date first
above written.
[See Attached Signature Pages]
SIGNATURE PAGE OF ASSIGNOR
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Assignor"
----------
__________________________________________
a_________________________________________
By________________________________________
Name:_____________________________________
Title:____________________________________
SIGNATURE PAGE OF ASSIGNEE
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Assignee"
----------
__________________________________________
a_________________________________________
By________________________________________
Name:_____________________________________
Title:____________________________________
Address of Assignee:
__________________________________________
__________________________________________
__________________________________________
Schedule 1
to
Assignment Agreement
Effective Date ___________, 19___
[DESCRIBE THE NOTES/CERTIFICATES TO BE ASSIGNED BY DATE, CERTIFICATE OR NOTE
NUMBER, FACE AMOUNT, ETC.]
ACKNOWLEDGMENT OF ASSIGNMENT
BY
TRUSTEE AND AGENT
ATTACHED TO
ASSIGNMENT AGREEMENT
[1997 Pep Boys II Leased Property]
"Trustee"
---------
STATE STREET BANK AND TRUST
COMPANY, a Massachusetts
trust company, (not in its
individual capacity, but
solely as Trustee)
By________________________________________
Name:_____________________________________
Title:____________________________________
"Agent"
-------
CITICORP LEASING, INC., a
Delaware corporation
By________________________________________
Name:_____________________________________
Title:____________________________________
TRANSACTION AGREEMENT
Dated as of February 28, 1997
Among
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation,
STATE STREET BANK AND TRUST COMPANY,
a Massachusetts trust company,
not in its individual capacity except as expressly
stated herein, but solely as Trustee,
and
CITICORP LEASING, INC.,
a Delaware corporation,
as Administrative Agent, Purchaser, and Holder,
and
BANK OF MONTREAL,
as Purchaser and Holder
[1997 Pep Boys II Leased Property]
TABLE OF CONTENTS
Page
----
Preliminary Statement.............................................................................................1
ARTICLE I. FUNDING................................................................................2
Section 1.01. Advances under Instruments.............................................................2
Section 1.02. Closing Date...........................................................................4
Section 1.03. Conditions for Initial Advance.........................................................5
Section 1.04. Conditions Precedent to All Advances...................................................5
Section 1.05. Advance Process.......................................................................12
Section 1.06. Form of Documents.....................................................................13
Section 1.07. Transaction Fees......................................................................13
Section 1.08. Extension of Lease Term...............................................................15
ARTICLE II. REPRESENTATIONS AND WARRANTIES........................................................15
Section 2.01. Lessee's Representations and Warranties...............................................15
Section 2.02. Trust Company Representations.........................................................17
ARTICLE III. TRUSTEE AND TRUST COMPANY COVENANTS...................................................20
Section 3.01. Lien Claims...........................................................................20
Section 3.02. Inspection of Property................................................................20
Section 3.03. Notice of Significant Matters.........................................................20
Section 3.04. Qualification; Business; Use of Advances..............................................21
Section 3.05. Encumbrances..........................................................................21
Section 3.06. Transaction Documents.................................................................21
Section 3.07. Transactions with Affiliates..........................................................22
Section 3.08. Transfer or Encumbrance of the Property...............................................22
Section 3.09. Compliance with Laws and Documents....................................................23
Section 3.10. Assignment............................................................................23
Section 3.11. Other Tenant Leases...................................................................23
Section 3.12. Agent's Approval of Settlements.......................................................23
Section 3.13. Notice of Actions; Prosecution........................................................24
Section 3.14. Covenants of Trust Company............................................................24
ARTICLE IV. THE NOTES AND THE CERTIFICATES.................................................................25
Section 4.01. Rates Applicable to Instruments.......................................................25
Section 4.02. Assignments and Participations........................................................25
Section 4.03. Taxes.................................................................................28
Section 4.04. Avoidance of Taxes, Other Charges and Increased Costs.................................30
Section 4.05. Sharing of Payments, Etc..............................................................31
Section 4.06. Instrument Holders' Credit Decisions..................................................31
ARTICLE V. MISCELLANEOUS..................................................................................32
Section 5.01. Survival..............................................................................32
Section 5.02. Notices...............................................................................32
Page
----
Section 5.03. Severability..........................................................................34
Section 5.04. Amendments, Etc.......................................................................34
Section 5.05. Headings..............................................................................34
Section 5.06. Definitions...........................................................................34
Section 5.07. Benefit...............................................................................34
Section 5.08. Place of Payment......................................................................35
Section 5.09. Counterparts..........................................................................35
Section 5.10. Governing Law; Venue..................................................................35
Section 5.11. Business Day..........................................................................35
Section 5.12. The Trustee...........................................................................36
Section 5.13. Estoppel Certificates.................................................................36
Section 5.14. Transaction Documents; Further Assurances.............................................36
Section 5.15. Confidentiality.......................................................................37
Section 5.16. Interest..............................................................................37
Section 5.17. Money.................................................................................38
Section 5.18. Number and Gender of Words............................................................38
Section 5.19. Articles, Sections, Exhibits, and Schedules...........................................38
Section 5.20. Decisions of Parties..................................................................39
Section 5.21. Restructure of Transaction............................................................39
Section 5.22. Construction of Agreement.............................................................39
Section 5.23. Brokers...............................................................................40
Section 5.24. WAIVER OF JURY TRIAL..................................................................40
ARTICLE VI. THE AGENT.............................................................................40
Section 6.01. Appointment...........................................................................40
Section 6.02. Nature of Duties......................................................................41
Section 6.03. Rights, Exculpation, etc..............................................................43
Section 6.04. Reliance..............................................................................43
Section 6.05. Indemnification.......................................................................44
Section 6.06. Successor Agent; Resignation of Agent.................................................44
Section 6.07. Authorization to Act as Agent of Trustee..............................................45
FIRST AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys II Leased Property Facility)
This FIRST AMENDMENT TO TRANSACTION AGREEMENT dated as of the 31st day
of July, 1997 (this "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 a
Purchaser and 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; BANK OF MONTREAL ("Bank of Montreal") as a
Purchaser and Instrument Holder under the Transaction Agreement; and CITICORP
LEASING, INC., a Delaware corporation ("Agent"), in its capacity as the
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 February 28, 1997, Lessee, Trustee, CLI, Bank of
Montreal, and Agent entered into that certain Transaction Agreement (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. Lessee and Trustee desire to increase the maximum amount of Advances
available to Trustee under the terms of the Transaction Agreement, and CLI and
Bank of Montreal have agreed to increase their respective Commitments
thereunder, subject to certain additional provisions and adjustments to the
Transaction Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and agreements set
forth herein and therein, the parties agree as follows:
1. CLI, Bank of Montreal, Agent, Lessee, and Trustee hereby agree that
the maximum amount of Advances available to Trustee under the Transaction
Agreement is hereby increased from $45,000,000.00 to $70,000,000.00.
2. In connection with the increase described above the aggregate
Commitments of CLI and Bank of Montreal are increased to $35,000,000.00 each. To
implement such increases, effective as of the date of this Amendment Sections
1.01(a) and 1.01(b) of the Transaction Agreement are amended to read, in their
entirety, as follows:
"(a) CLI, as an initial Purchaser of the Instruments, confirms
that its Certificate Commitment is $2,800,000.00, its A-Note Commitment
is $28,175,000.00 and its B-Note Commitment is $4,025,000.00, for a
total Commitment of $35,000,000.00. Notwithstanding the foregoing, it
is expressly agreed that in no event will CLI ever be obligated to make
an Advance in respect of its Commitment if, at the time of the Advance
and after giving effect to the Advance in question, the "Hold Position"
of CLI (i) for Advances made during the period ending July 15, 1997,
would exceed $30,000,000.00, (ii) for Advances made during the period
July 15, 1997, through August 31, 1997, would exceed $40,000,000.00,
(iii) for Advances made during the period September 1, 1997, through
December 31, 1997, would exceed $20,000,000.00, (iv) for Advances made
during the period January 1, 1998, through June 30, 1998, would exceed
$15,000,000.00, and (v) for Advances made on or after July 1, 1998,
would exceed $10,000,000.00. For purposes hereof the term "Hold
Position" means the sum of (i) the aggregate outstanding principal
balance and/or stated amounts of Instruments then held by CLI
hereunder, plus (ii) the aggregate outstanding principal and/or stated
amount of notes or equity certificates then held by CLI in respect of
the Pep Boys I Facility, plus (iii) the remaining amount of available
advances that Lessee may request under the Pep Boys I Facility;
provided, however, that there shall be excluded from such calculation
any portion of the principal balance and/or stated amount, as
applicable, of any such instruments (whether hereunder or in respect of
the Pep Boys I Facility) that are held by CLI for the benefit of an
unaffiliated participant or assignee that has closed on or purchased
such participation. It is acknowledged that CLI's "Hold Position" with
respect to the Pep Boys I Facility as of the date hereof is
$15,408,038.28, and the "Hold Position" of CLI hereunder is
$14,426,255.76, such that the maximum amount of Advances currently
available under the CLI Commitment is $10,165,705.96.
"(b) Bank of Montreal, as an initial Purchaser of the
Instruments, confirms that its Certificate Commitment is zero ($0.00),
its A-Note Commitment is $30,625,000.00, and its B-Note Commitment is
$4,375,000.00, for a total Commitment of $35,000,000.00."
3. Section 1.07 of the Transaction Agreement, relating to the fees to
be paid by Lessee, is amended effective as of the date of this Amendment to
read, in its entirety, as follows:
2
"Section 1.07. Transaction Fees. Lessee shall pay from time
to time the following fees related to the transactions contemplated
herein:
"(a) Arranging/Structuring Fee. In addition to the
$247,500.00 structuring fee paid to CLI in connection with the
execution of the original Transaction Agreement, the receipt
of which is hereby acknowledged by CLI, in connection with the
increase of the aggregate commitments from $45,000,000.00 to
$70,000,000.00 Lessee shall pay to CLI or an Affiliate of CLI
a structuring fee in the amount of $137,500.00 cash upon
execution of the First Amendment to this Transaction
Agreement.
"(b) Servicing Fee. Subject to the terms of a certain
side letter agreement dated February 28, 1997, as amended as
of the date of the First Amendment to this Transaction
Agreement, between Agent and Lessee regarding a limitation on
such fee, on each December 15 (starting December 15, 1997)
throughout the term of this Agreement, as well as on the
Maturity Date, Lessee shall pay to CLI or an Affiliate of CLI
a servicing fee in an amount equal to 0.10% of the weighted
average outstanding principal balance of the Notes and the
weighted-average outstanding amount of the Certificates for
the preceding year. The first payment shall be prorated on a
daily basis for the period from the date hereof through
December 15, 1997, and the last payment due on the Maturity
Date shall also be a prorated payment covering the period
December 16, 2002, through the Maturity Date. The servicing
fee payment due on December 15, 1997, shall be adjusted to
reflect the reduction in the fee from 0.125% to 0.10% as of
the effective date of this First Amendment.
"(c) Commitment Fee. On each March 30, June 30,
September 30, and December 30 through and including September
30, 1998, Lessee shall pay to the Purchasers a commitment fee
(computed quarterly in arrears) in an amount equal to
one-fourth of the amount determined by multiplying the unused
portion of the Commitment (computed on a weighted average
daily basis during the quarter) by the applicable percentage
provided for in the following chart:
Lessee's Debt Rating Commitment Fee Rate
-------------------- -------------------
BBB+ (or higher) 10.0 basis points
BBB 15.0 basis points
BBB- 21.5 basis points
lower than BBB- 27.5 basis points
"Notwithstanding the foregoing, the
commitment fee for the period from February 28, 1997, through
the day immediately preceding the effective date of this
Amendment shall be 20 basis points per annum and at the time
of the June 30, 1997, payment of the commitment fee the Lessee
3
and CLI shall adjust the commitment fee payment due at that
time to reflect and reconcile the fees paid through such date
in accordance with such retroactive adjustment.
"The last payment due September 30, 1998,
shall be a prorated payment reflecting only the period July 1,
1998, through the Outside Funding Date. In the event the
Outside Funding Date is extended, the obligation to continue
to pay a commitment fee on the unused portion of the
Commitment shall be likewise extended. In the event that
Lessee desires to terminate its right to obtain Advances
hereunder prior to the Outside Funding Date, Agent and Trustee
agree to enter into an amendment to this Agreement and the
other Transaction Documents as necessary to terminate the
obligation of the Purchasers to advance the unused portion of
the Commitment, and after such termination no further
commitment fees shall be due.
"(d) Trustee Fees. From time to time the Lessee
shall pay to the Trustee the various fees and other payments
provided for in the Declaration of Trust and/or in the Fee
Letter."
4. A new Section 4.07 is hereby added to the Transaction
Agreement reading as follows:
"Section 4.07. Payment of Increased Costs, Reserve Costs and
Break Costs. The Lessee will pay, and will indemnify each Instrument
Holder for the full amount of, any Increased Costs, Reserve Costs
and/or Break Costs incurred by such Instrument Holder. Payment of such
amounts shall be made as a part of the Additional Rent payable by the
Lessee under the Lease pursuant to the procedural provisions of the
Lease relating to the payment thereof and paid over to the Instrument
Holder(s) in question as provided for in the Declaration."
5. Simultaneously with the execution of this Amendment, Lessee,
Trustee, Bank of Montreal, Agent, 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. Without
limitation, the following Instruments shall be issued in replacement of the
Instruments issued contemporaneously with the Transaction Agreement:
4
--------------------------------------------------------------------------------------------------------------------
Replacement Instruments to Be Issued
---------------------------------------- ------------------------------------- -------------------------------------
Holder Type of Instrument Principal or Face Amount
---------------------------------------- ------------------------------------- -------------------------------------
Bank of Montreal A- Note $30,625,000.00
---------------------------------------- ------------------------------------- -------------------------------------
Bank of Montreal B-Note $4,375,000.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI A-Note $28,175,000.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI B-Note $4,025,000.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI Certificate $2,800,000.00
---------------------------------------- ------------------------------------- -------------------------------------
6. 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. By its execution hereof Lessee Parent hereby
ratifies and affirms each and every representation, warranty, covenant,
obligation and indemnity contained in the Transaction Agreement as of the date
hereof.
7. By its execution hereof, Lease Guarantor hereby ratifies and affirms
each and every representation, warranty, covenant, obligation and indemnity
contained in the Lease Guarantee as of the date hereof and acknowledges that the
Lease Guarantee remains in full force and effect.
8. 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 as of the date hereof and acknowledge that the
Environmental Indemnity Agreement remains in full force and effect.
9. By their execution hereof, Pep Boys-Delaware and Pep
Boys-California, in their capacity as Additional Lessees under the Lease, along
with Lessee Parent in its capacity as Lessee under the Lease, hereby ratify and
affirm each and every representation, warranty, covenant, obligation and
indemnity contained in the Lease as of the date hereof and acknowledge that the
Lease remains in full force and effect..
10. CLI, Bank of Montreal, Agent, and Lessee hereby approve the
execution by Trustee of that certain First Amendment to Declaration of Trust of
even date herewith, and the execution by Trustee and Lessee of that certain
First Amendment to Master Lease of even date herewith, each of which has been
executed to evidence adjustments to the agreements and arrangements of the
parties negotiated and agreed to between the parties in connection herewith.
5
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.
[SEE ATTACHED SIGNATURE PAGES]
6
SIGNATURE PAGE OF THE PEP BOYS - MANNY, MOE & XXXX
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
LESSEE, LESSEE PARENT, LEASE
GUARANTOR AND INDEMNITOR:
----------------------------
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
7
SIGNATURE PAGE OF TRUSTEE AND TRUST COMPANY
ATTACHED TO
FIRST 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:_____________________________________
8
SIGNATURE PAGE OF CLI AND AGENT
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
AGENT and CLI:
--------------
CITICORP LEASING, INC.,
a Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
9
SIGNATURE PAGE OF BANK OF MONTREAL
ATTACHED TO
FIRST AMENDMENT TO TRANSACTION AGREEMENT
Bank of Montreal:
-----------------
BANK OF MONTREAL
By:________________________________________
Name:______________________________________
Title:_____________________________________
10
SIGNATURE PAGE OF ADDITIONAL LESSEES
ATTACHED TO
FIRST 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 XXXXX XXX & XXXX OF
CALIFORNIA, a California corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
11
SECOND AMENDMENT TO TRANSACTION AGREEMENT
(Pep Boys II Leased Property Facility)
This SECOND AMENDMENT TO TRANSACTION AGREEMENT dated as of the 20th day
of October, 1997 (this "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 a
Purchaser and 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; BANK OF MONTREAL ("Bank of Montreal"), as a
Purchaser and Instrument Holder under the Transaction Agreement; and CITICORP
LEASING, INC., a Delaware corporation ("Agent"), in its capacity as the
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 February 28, 1997, Lessee, Trustee, CLI, Bank of
Montreal, and 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. Lessee and Trustee desire to increase the maximum amount of Advances
available to Trustee under the terms of the Transaction Agreement, and CLI and
Bank of Montreal have agreed to increase their respective Commitments
thereunder, subject to certain additional provisions and adjustments to the
Transaction Agreement as hereinafter provided.
NOW, THEREFORE, in consideration of the premises and agreements set
forth herein and therein, the parties agree as follows:
1. CLI, Bank of Montreal, Agent, Lessee, and Trustee hereby agree that
the maximum amount of Advances available to Trustee under the Transaction
Agreement is hereby increased from $70,000,000.00 to $105,000,000.00.
2. In connection with the increase described above the aggregate
Commitments of CLI and Bank of Montreal are increased to $52,500,000.00 each. To
implement such increases, effective as of the date of this Amendment Sections
1.01(a) and 1.01(b) of the Transaction Agreement are amended to read, in their
entirety, as follows:
"(a) CLI, as an initial Purchaser of the Instruments, confirms
that its Certificate Commitment is $4,200,000.00, its A-Note Commitment
is $42,262,500.00 and its B-Note Commitment is $6,037,500.00, for a
total Commitment of $52,500,000.00. Notwithstanding the foregoing, it
is expressly agreed that in no event will CLI ever be obligated to make
an Advance in respect of its Commitment if, at the time of the Advance
and after giving effect to the Advance in question, the "Hold Position"
of CLI (i) for Advances made during the period ending October 31, 1998,
would exceed $40,000,000.00, and (ii) for Advances made during the
period November 1, 1998, through December 31, 1998, would exceed
$30,000,000.00. For purposes hereof the term "Hold Position" means the
sum of (i) the aggregate outstanding principal balance and/or stated
amounts of Instruments then held by CLI hereunder, plus (ii) the
aggregate outstanding principal and/or stated amount of notes or equity
certificates then held by CLI in respect of the Pep Boys I Facility;
provided, however, that there shall be excluded from such calculation
any portion of the principal balance and/or stated amount, as
applicable, of any such instruments (whether hereunder or in respect of
the Pep Boys I Facility) that are held by CLI for the benefit of an
unaffiliated participant or assignee that has closed on or purchased
such participation. It is acknowledged that CLI's "Hold Position" with
respect to the Pep Boys I Facility as of the date hereof is
$2,512,225.51, and the "Hold Position" of CLI hereunder is
$7,550,552.83, such that the maximum amount of Advances currently
available under the CLI Commitment is $29,937,221.66.
"(b) Bank of Montreal, as an initial Purchaser of the
Instruments, confirms that its Certificate Commitment is zero ($0.00),
its A-Note Commitment is $45,937,500.00, and its B-Note Commitment is
$6,562,500.00, for a total Commitment of $52,500,000.00."
3. Section 1.05(e) of the Transaction Agreement is hereby amended such
that the term "Outside Funding Date" shall mean (i) August 31, 1998, as to any
Parcel added to the Property on or prior to September 30, 1997, and (ii)
December 31, 1998, as to any Parcel added to the Property on or after October 1,
1997.
2
4. Simultaneously with the execution of this Amendment, Lessee,
Trustee, Bank of Montreal, Agent, 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. Without
limitation, the following Instruments shall be issued in replacement of the
Instruments heretofore issued pursuant to the Transaction Agreement (it being
acknowledged that CLI has heretofore sold and assigned portions of its A-Note
and B-Note):
--------------------------------------------------------------------------------------------------------------------
Replacement Instruments to Be Issued
---------------------------------------- ------------------------------------- -------------------------------------
Holder Type of Instrument Principal or Face Amount
---------------------------------------- ------------------------------------- -------------------------------------
Bank of Montreal A- Note $45,937,500.00
---------------------------------------- ------------------------------------- -------------------------------------
Bank of Montreal B-Note $6,562,500.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI A-Note $29,137,500.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI B-Note $4,162,500.00
---------------------------------------- ------------------------------------- -------------------------------------
CLI Certificate $4,200,000.00
---------------------------------------- ------------------------------------- -------------------------------------
5. 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. By its execution hereof Lessee Parent hereby
ratifies and affirms each and every representation, warranty, covenant,
obligation and indemnity contained in the Transaction Agreement as of the date
hereof.
6. By its execution hereof, Lease Guarantor hereby ratifies and affirms
each and every representation, warranty, covenant, obligation and indemnity
contained in the Lease Guarantee as of the date hereof and acknowledges that the
Lease Guarantee remains in full force and effect.
7. 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 as of the date hereof and acknowledge that the
Environmental Indemnity Agreement remains in full force and effect.
3
8. By their execution hereof, Pep Boys-Delaware and Pep
Boys-California, in their capacity as Additional Lessees under the Lease, along
with Lessee Parent in its capacity as Lessee under the Lease, hereby ratify and
affirm each and every representation, warranty, covenant, obligation and
indemnity contained in the Lease as of the date hereof and acknowledge that the
Lease remains in full force and effect.
9. CLI, Bank of Montreal, Agent, and Lessee hereby approve the
execution by Trustee of that certain Second Amendment to Declaration of Trust of
even date herewith.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the date first above written.
[SEE ATTACHED SIGNATURE PAGES]
4
SIGNATURE PAGE OF THE PEP BOYS - MANNY, MOE & XXXX
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
LESSEE, LESSEE PARENT, LEASE
GUARANTOR AND INDEMNITOR:
----------------------------
THE PEP BOYS - MANNY, MOE & XXXX,
a Pennsylvania corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
5
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:_________________________________________
Xxxxxx X. Xxxxx, Vice President
TRUST COMPANY:
--------------
STATE STREET BANK AND TRUST
COMPANY, a Massachusetts
trust company (in its
individual capacity, but
only as expressly stated
herein)
By:_________________________________________
Xxxxxx X. Xxxxx, Vice President
6
SIGNATURE PAGE OF CLI AND AGENT
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
AGENT and CLI:
--------------
CITICORP LEASING, INC.,
a Delaware corporation
By:____________________________________________
Xxxxx X. Xxxxx, Vice President
7
SIGNATURE PAGE OF BANK OF MONTREAL
ATTACHED TO
SECOND AMENDMENT TO TRANSACTION AGREEMENT
Bank of Montreal:
BANK OF MONTREAL
By:_____________________________________
X. X. Xxxxxx, Director
8
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 XXXXX XXX & XXXX OF
CALIFORNIA, a California corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
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