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EXHIBIT 10.52
________________________________________________________________________________
AMENDED AND RESTATED LEASE AGREEMENT
Dated as of December 19, 1996
AMONG
JAMESTOWN FUNDING, LIMITED PARTNERSHIP,
on the one hand, as Lessor,
AND
ULTRAMAR INC.,
ULTRAMAR ENERGY INC.,
DIAMOND SHAMROCK LEASING, INC.,
DIAMOND SHAMROCK ARIZONA, INC.
AND
DIAMOND SHAMROCK REFINING AND MARKETING COMPANY,
on the other hand, as Lessees
THIS LEASE HAS BEEN ASSIGNED AS SECURITY
FOR INDEBTEDNESS OF THE LESSOR. SEE SECTION 21.
This Lease has been manually executed in nine (9) counterparts, numbered
consecutively from 1 through 9, of which this is No.___. To the extent, if
any, that this Lease constitutes chattel paper (as such term is defined in the
Uniform Commercial Code as in effect in any applicable jurisdiction), no
security interest in this Lease may be created or perfected through the
transfer or possession of any counterpart other than the original executed
counterpart which shall be the counterpart identified as counterpart No. 1.
________________________________________________________________________________
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AMENDED AND RESTATED LEASE AGREEMENT
AMENDED AND RESTATED LEASE AGREEMENT, dated as of December 19,
1996 (as the same may be amended, restated, modified or supplemented from time
to time, this "LEASE"), among JAMESTOWN FUNDING, LIMITED PARTNERSHIP, a
Delaware limited partnership, on the one hand, as the "LESSOR", and ULTRAMAR
INC., a Nevada corporation, ULTRAMAR ENERGY INC., a Delaware corporation,
DIAMOND SHAMROCK LEASING, INC., a Delaware corporation, DIAMOND SHAMROCK
ARIZONA, INC., a Delaware corporation and DIAMOND SHAMROCK REFINING AND
MARKETING COMPANY, a Delaware corporation, severally and not jointly, on the
other hand, as the "LESSEES".
WHEREAS, each Lessee and Lessor are parties to that Amended
and Restated Acquisition and Construction Agreement pursuant to which Lessor
has or will acquire title to certain property that is intended to be used in
such Lessee's business as an office building and for other commercial purposes
or as retail fuel outlets/convenience stores/car washes and related uses such
as quick service restaurants; and
WHEREAS, the Lessor wishes to lease such property to a Lessee
pursuant to the provisions hereof;
NOW, THEREFORE, in consideration of the foregoing and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1 Defined Terms.
Unless the context otherwise requires, each term defined in
this SECTION 1, when used in this Lease, has the meaning indicated; capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Acquisition and Construction Agreement.
"ACCRUED DEFAULT OBLIGATIONS" has the meaning set forth in
SECTION 19 hereof.
"ACQUISITION AND CONSTRUCTION AGREEMENT" means the Amended and
Restated Acquisition and Construction Agreement, dated as of the date hereof,
between the Lessor, as owner, and the Lessee, as agent, providing for the
acquisition of fee or leasehold interests in real property and the construction
or installation of improvements including personal property and equipment on
each such interest of real property so acquired, as the same may be amended,
restated, modified or supplemented from time to time.
"ACQUISITION COST" means, with respect to any Unit, the amount
shown on the Unit Leasing Record relating to such Unit, as amended from time to
time.
"ADDITIONAL RENT" has the meaning set forth in paragraph (d)
of SECTION 7 hereof.
"AFFILIATE" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with, such Person.
For the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"ASSIGNEE" means the bank acting as agent pursuant to the
Amended and Restated Financing Agreement, in it capacity as such agent and as
collateral agent under any security document referred to therein.
AMENDED AND RESTATED LEASE AGREEMENT - Page 1
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"ASSIGNMENT" means each assignment agreement referred to in
SECTION 20 hereof, between the Lessor and a third party, pursuant to which the
Lessor assigns certain of its rights under this Lease to such third party, as
the same may be amended, restated, modified or supplemented from time to time.
"ASTM" means the American Society for Testing and Materials.
"BASIC RENT" means, with respect to all Units of Property, the
sum of the Monthly Fixed Component of Rent and Monthly Variable Component of
Rent:
A. Monthly Variable Component of Rent is computed by multiplying
the following:
(i) the aggregate Acquisition Cost at the beginning of
such month less $203,500 by,
(ii) a fraction having a numerator equal to the number of
days in such month, and a denominator of 365, or in a leap year, 366, by
(iii) the Lessor's weighted average percentage cost per
annum (including, without limitation, any interest accruing at a default rate
and any fees payable by Lessor under or pursuant to the Financing Agreement),
and adjusted to an actual /365 basis, in respect of all borrowings outstanding
at any time during the period from and including the sixteenth (16th) day of
the preceding calendar month to and including the 15th day of the calendar
month for which Basic Rent is being computed (the "COMPUTATION PERIOD") to
finance or refinance the acquisition and ownership of the Units of Property;
and
B. Monthly Fixed Component of Rent is $9,365.00 (Nine Thousand
Three Hundred Sixty-Five and No/100 Dollars) until December 20, 1996, $9,729.00
(Nine Thousand Seven Hundred Twenty-Nine and No/100 Dollars) until July 25,
2001, $9,583.00 (Nine Thousand Five Hundred Eighty-Three and No/100 Dollars)
from July 25, 2001 until July 25, 2002, and $9,438.00 (Nine Thousand Four
Hundred Thirty-Eight and No/100 Dollars) after July 24, 2002.
Notwithstanding the foregoing, "BASIC RENT" shall, with respect to all Units of
Property, (A) for the partial first and last calendar months during the Lease
Term, be calculated by multiplying the result obtained pursuant to the
foregoing for such months by a fraction the denominator of which shall be the
number of days in such calendar month and the numerator of which shall be the
number of days during such partial month for which Units are under lease;
provided that if the Effective Date for any Property is after the Lease Rate
Date for any partial first month, the Basic Rent for such partial first month
shall be included in the Basic Rent for the next following month, and (B) shall
be adjusted as mutually agreed by the Lessor and the Lessee with the consent of
Assignee (x) if the Guarantor's long-term unsecured debt rating falls below BBB
by Standard & Poor's or Baa2 by Moody's Investor Services or (y) should the
Extended Term go into effect.
"BASIC RENT PAYMENT DATE" means, with respect to any Unit, the
twentieth (20th) day of any calendar month during the Lease Term or Extended
Term, if any, of such Unit, or, if such day is not a Business Day, the next
succeeding Business Day.
"BASIC TERM" has the meaning set forth in paragraph (b) of
SECTION 6 hereof.
"BUSINESS DAY" means any day other than a Saturday, a Sunday
or a day on which banking institutions in the City of New York are authorized
by law to close.
"CAP" means a written corrective action plan prepared by the
Lessee with respect to a Remediation Property which addresses the clean-up or
corrective action which is proposed to be taken by the Lessee and which, if
taken, is designed to clean-up, within twenty-four (24) months from the date of
acquisition of such Remediation
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Property, the petroleum hydrocarbons at the Remediation Property to levels
which would pass a Tier 2 ASTM risk based corrective action screening analysis.
"CERTIFICATE HOLDER" means each beneficiary of the trust
estate that is created pursuant to the Trust Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMPUTATION PERIOD" has the meaning set forth in subclause
A(iii) of the definition of Basic Rent in SECTION 1 hereof.
"CONSENT" means each consent of the Lessee to an Assignment,
pursuant to which the Lessee consents to the terms of such Assignment, as the
same may be amended, restated, modified or supplemented from time to time.
"CONTAMINANT" means any petroleum or petroleum-derived waste,
including, but not limited to, crude oil or any products of the fractional
distillation of crude oil and the products of weathering or breaking down of
petroleum products.
"EFFECTIVE DATE" means, with respect to any Unit of Property,
the date on which such Unit becomes subject to this Lease, as evidenced by
execution by the Lessor and the Lessee of a Unit Leasing Record; provided that
in no event shall the Effective Date occur on a date later than forty-eight
(48) months from the date of execution of this Lease.
"ENVIRONMENTAL AGENCY" means the Governmental Authority (i)
having environmental oversight jurisdiction over any Unit of Property or (ii)
having environmental oversight jurisdiction over the use, storage or disposal
of Contaminants, including petroleum hydrocarbons.
"ENVIRONMENTAL APPROVALS" means all permits, consents,
licenses, and other approvals or authorizations required under Environmental
Laws.
"ENVIRONMENTAL LAWS" means all applicable federal, state and
local laws, statutes, codes, ordinances, rules, regulations, directives,
binding policies, permits, or orders relating to or addressing the environment,
health or safety, including, but not limited to, any law, statute, code,
ordinance, rule, regulation, directive, binding policy, permit or order
relating to the use, handling or disposal of any Contaminant or Hazardous
Substance, as such requirements are promulgated and applied by the Governmental
Authority responsible for administering such requirements.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental
Authority for any (a) liability under any Environmental Law, or (b) damages
arising from, or costs incurred by, such Governmental Authority in response to
a Release or threatened Release of a Contaminant or Hazardous Substance into
the environment.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA CONTROLLED GROUP" shall mean a group consisting of an
entity and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such entity
that, together with such entity, are treated as a single employer under Section
4001(b).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 18
hereof.
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"EXPENSES" has the meaning set forth in SECTION 11 hereof.
"EXTENDED TERM" means the term, up to a maximum of two (2)
seven (7) year periods, during which, if the conditions set forth in SECTION 13
hereof are met, a Unit of Property may be leased pursuant to the provisions of
this Lease, which term would commence on the day following the end of the Lease
Term with respect to such Unit of Property.
"FINANCING AGREEMENT" means the Amended and Restated Financing
Agreement, dated as of the date hereof, and entered into between the Lessor and
the banks that are parties thereto or any substitute financing, credit or loan
agreement entered into by the Lessor and a lender, with the written approval of
the Lessee, related to the financing of Property, in each case as the same may
be amended, restated, modified or supplemented from time to time.
"GOVERNMENTAL ACTION" has the meaning set forth in paragraph
(d) of SECTION 2 hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GROUND LEASE" means a lease between a landlord who shall be
the Lessee, in the case of a Remediation Property, or the Lessee or any other
Person, in all other cases, and the Lessor of land and underground equipment,
if any, including, without limitation, underground storage tanks.
"GUARANTOR" means Ultramar Diamond Shamrock Corporation, a
Delaware corporation, and its successors.
"GUARANTOR'S CONSENT" means the Consent of the Guarantor to
the assignment by the Lessor of certain of the rights under the Guaranty to the
Assignee, as the same may be amended, restated, modified or supplemented from
time to time.
"GUARANTY" means the Guaranty Agreement, dated as of the date
hereof, as the same may be amended, restated, modified or supplemented from
time to time, pursuant to which the Guarantor guarantees the payment in full of
all amounts due and owing by the Lessee in respect of this Lease and the
Acquisition and Construction Agreement and the performance by the Lessee of all
of its obligations hereunder and thereunder.
"HAZARDOUS SUBSTANCE" means any substance defined as a
"hazardous substance" by or pursuant to the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq., or by or
pursuant to any state law of similar purpose, any radioactive material,
polychlorinated biphenyls, and asbestos containing material, except that any
Contaminants shall not be considered as hazardous substances regardless of
whether included on any list of, or incorporated within the statutory
definition of, the term "hazardous substance" in any Environmental Law.
"INDEBTEDNESS" means for any Person (i) all indebtedness or
other obligations of such Person for borrowed money and all indebtedness of
such Person with respect to any other items (other than income taxes payable,
deferred taxes, deferred credits and accounts payable) which would, in
accordance with generally accepted accounting principles, applied on a
consistent basis, be classified as a liability on the balance sheet of such
Person, (ii) all obligations of such Person to pay the deferred purchase price
of property or services, including any such obligations created under or
arising out of any conditional sale or other title retention agreement, (iii)
all obligations of such Person (contingent or otherwise) under reimbursement or
similar agreements with respect to the issuance of letters of credit, (iv) all
indebtedness or other obligations of any other Person of the type specified in
clause (i), (ii) or (iii) above, the payment or collection of which such Person
has guaranteed (except by reason of endorsement for collection
AMENDED AND RESTATED LEASE AGREEMENT - Page 4
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in the ordinary course of business) or in respect of which such Person is
liable, contingently or otherwise, including, without limitation, liable by way
of agreement to purchase products or securities, to provide funds for payment,
to maintain working capital or other balance sheet conditions or otherwise to
assure a creditor against loss, and (v) all indebtedness or other obligations
of any other Person of the type specified in clause (i), (ii), (iii) or (iv)
above secured by (or for which the holder of such indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien, upon or in property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or becomes liable for the
payment of such indebtedness or obligations.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION 11
hereof.
"INSURANCE REQUIREMENTS" means all terms of any insurance
policy covering or applicable to any Unit of Property, all requirements of the
issuer of any such policy, all statutory requirements and all orders, rules,
regulations and other requirements of any governmental body related to
insurance applicable to such Unit.
"INTERIM TERM" has the meaning set forth in paragraph (a) of
SECTION 6 hereof.
"LEASE RATE DATE" has the meaning set forth in paragraph (b)
of SECTION 7 hereof.
"LEASE TERM" means, with respect to any Unit of Property, the
Interim Term plus the Basic Term thereof plus, if applicable, the Extended
Term.
"LEASE TERMINATION DATE" means for any Unit of Property, the
earlier of (i) the last day of the Lease Term of such Unit (unless the lease
hereunder of such Unit has been extended pursuant to SECTION 13 hereof) or (ii)
if the lease of such Unit has been extended pursuant to SECTION 13 hereof, the
last day of the Extended Term of such Unit.
"LEGAL REQUIREMENTS" means all applicable laws, judgments,
decrees, ordinances and regulations and any other governmental rules, orders
and determinations and all requirements having the force of law, now or
hereinafter enacted, and all agreements, covenants, conditions and
restrictions, applicable to each Unit and/or the construction, ownership,
operation or use thereof, including, without limitation, compliance with all
requirements of labor laws and environmental statutes, compliance with which is
required at any time from the date hereof through the Lease Term and any
Extended Term thereof.
"LENDER" means each bank that is a party to the Financing
Agreement and each permitted assignee thereof.
"LESSEE" means each of Ultramar Inc., a Nevada corporation,
Ultramar Energy Inc., a Delaware corporation, Diamond Shamrock Leasing, Inc., a
Delaware corporation, Diamond Shamrock Arizona, Inc., a Delaware corporation
and Diamond Shamrock Refining and Marketing Company, a Delaware corporation, as
applicable, and any successor or assign permitted hereby.
"LESSOR" means Jamestown Funding, Limited Partnership, a
Delaware limited partnership, or any successor or successors to all of its
rights and obligations as the Lessor hereunder and, for purposes of SECTION 11
hereof, shall include any Person the income of which for federal income tax
purposes is determined by reference to the income of the Lessor or its
successors.
"LETTER AGREEMENT" means the letter agreement dated as of the
date hereof between the Lessor and the Lessee.
"LIEN" means any security interest, mortgage, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other), or other
security agreement of any kind or nature whatsoever (including, without
limitation,
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any conditional sale or other title retention agreement, any financing lease
having substantially the same economic effect as any of the foregoing, and the
filing of any financing statement under the Uniform Commercial Code or
comparable law of any jurisdiction in respect of any of the foregoing).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
the financial condition or business of the Guarantor and its subsidiaries
(including, without limitation, each Lessee), taken as a whole or a material
adverse impact on the ability of the Lessee to perform its obligations under
this Lease or the Acquisition and Construction Agreement or of the Guarantor to
perform its obligations under the Guaranty or the Residual Guaranty Payment
Support.
"MORTGAGEABLE GROUND LEASE" means a Ground Lease which is
delivered to the Lessor for execution by the Lessor, or assigned to the Lessor
by an assignment in form and substance satisfactory to the Lessor, and having
such terms and characteristics as are reasonably required by the Lessor or the
Assignee including, without limitation, the following: (a) free assignability
to (i) any lender as security for a borrowed money obligation of the Lessor
and, upon foreclosure of such security, free assignability by such lender to
any third party, and (ii) any purchaser in connection with a sale of the
related Unit of Property pursuant to the provisions of this Lease and the
Acquisition and Construction Agreement (the Lessor and any Assignee being
released from liability upon such assignment); (b) a term (including renewals)
(i) of at least forty (40) years in excess of the Lease Term of the Unit of
Property to which a Ground Lease between Lessee, as ground lessor, and Lessor,
as ground lessee, relates; provided, however, that any such Ground Lease
relating to a Unit of Property located in California shall have a term
(including renewals) of at least thirty-five (35) years and (ii) of at least
twenty (20) years in excess of the Lease Term of the Unit of Property to which
a Ground Lease between any party other than Lessee or its Affiliates, as ground
lessor, and Lessor, as ground lessee, relates; (c) no provisions for percentage
or variable rent; (d) permission for any lawful use except that the Ground
Lease may contain prohibitions on use which are similar to those applicable to
other adjacent parcels of property; (e) no provision for a security deposit;
(f) a requirement that the Assignee will receive copies of all notices of
default delivered under or pursuant to such Ground Lease; (g) a provision that
any Assignee shall have the right to cure any defaults thereunder (whether
monetary or nonmonetary in nature), and in the event of such cure to receive a
new ground lease on the same terms as the original Ground Lease; (h) a no
recourse section substantially similar to the language set forth in SECTION 30
hereof; (i) a prohibition of any mortgages or other Liens on the underlying fee
except Permitted Liens except that the ground lessor under any Ground Lease may
encumber the Unit of Property relating to such Ground Lease with mortgages or
deeds of trust securing the repayment of money provided that (i) the
document(s) creating such Lien provides that either such Lien is subordinated
to such Ground Lease, the Assignee's interest as leasehold mortgagee under the
leasehold mortgage encumbering such Unit of Property, such leasehold mortgage
and any modifications, extensions or renewals of such Ground Lease and
leasehold mortgage, or (ii) the ground lessee or Assignee, as leasehold
mortgagee, will not be disturbed in their possession of the Unit of Property so
long as they remain in compliance with the terms and conditions of the Ground
Lease; and (j) no provision requiring the Lessor to indemnify any Person if
such indemnity would be broader in scope or subject matter than that provided
in SECTION 11 hereunder. A Mortgageable Ground Lease shall be delivered with
such estoppel certificates, recognition and attornment agreements, or
confirmation of customary mortgagee protection as are reasonably acceptable to
the Lessor and any Assignee.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a
"multiemployer plan" as defined in Section 4001(a)(3) of ERISA.
"NOTICE OF SUBSTITUTION" has the meaning set forth in
paragraph (c) of SECTION 32 hereof.
"PERMITTED CONTEST" has the meaning set forth in paragraph (a)
of SECTION 27 hereof.
"PERMITTED LIENS" means the following Liens and other matters
affecting the title to any Unit of Property: (a) Liens securing the payment of
taxes, assessments and other governmental charges or levies which are either
not delinquent or, if delinquent, are being contested by the Lessee in good
faith as a Permitted Contest; (b)
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zoning and planning restrictions, subdivision and platting restrictions,
easements, rights-of-way, licenses, reservations, covenants, conditions,
waivers, restrictions on the use of any Unit of Property, minor encroachments
or minor irregularities of title, none of which materially impairs the intended
use by, or value of such Unit of Property to, the Lessee; (c) reservations of
mineral interests; (d) the Lien created pursuant to the Financing Agreement;
(e) Liens disclosed in the title insurance commitments or policies with respect
to the Property delivered to and accepted by the Lessor and any Assignee on
acquisition of such Property pursuant to the provisions hereof or the
Acquisition and Construction Agreement, as applicable; (f) leases and licenses
in effect with respect to any Unit of Property which are permitted by this
Lease or which are delivered to and accepted by the Lessor prior to such Unit's
Effective Date; and (g) such other or additional matters as may be approved in
writing by the Lessor and any Assignee.
"PERSON" means any individual, corporation, partnership
(general or limited), limited liability company, private limited company, joint
venture, association, joint-stock company or trust.
"PLAN" shall mean any employee benefit plan covered by Title
IV of ERISA, the funding requirements of which are the responsibility of the
Lessee or a member of its ERISA Controlled Group at any relevant time.
"POTENTIAL DEFAULT" means any event which, with the lapse of
time, or giving of notice, or both, would constitute an Event of Default.
"PROPERTY" means (i) any and all parcels of land together with
all buildings and other improvements (including, without limitation, the
attachments, appliances, equipment, machinery and other affixed property which,
in each case, would constitute "fixtures" under Section 9-313(1)(a) of the
Uniform Commercial Code) now or hereafter located on such parcels of land,
leased or to be leased hereunder and when leased, evidenced by Unit Leasing
Records, and the respective easements, rights and appurtenances relating to
such parcels of land, buildings and improvements and (ii) any personal property
of any type, leased or to be leased hereunder and, when leased, evidenced by
Unit Leasing Records, as the case may be (including, without limitation, all
related appliances, appurtenances, accessions, furnishings, materials and parts
leased or to be leased by the Lessor to the Lessee as provided herein and
including all replacements and subsequent replacements of such related
appliances, appurtenances, accessions, furnishings, materials and parts to
which the Lessor obtains title), in each case in connection with the use
thereof as an office building or as or in a retail fuel outlet/convenience
store/car wash and related uses such as quick service restaurants.
"RECONCILIATION AMOUNT" has the meaning set forth in paragraph
(f) of SECTION 7 hereof.
"RELEASE" means the release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migrating into the indoor or outdoor environment of any Contaminant through or
in the air, soil, surface water, groundwater, or any structure.
"REMEDIAL ACTION" means actions required to (i) clean up,
remove, treat, or in any other way address Contaminants in the indoor or
outdoor environment; (ii) prevent the Release or threat of Release or minimize
the further Release of Contaminants; or (iii) investigate and determine if a
remedial response is needed, to design such a response and post-remedial
investigation, monitoring, operation, maintenance and care.
"REMEDIATION PROPERTY" means a Unit of Property with respect
to which, as indicated by a Phase II environmental report, (i) soil or ground
water contamination by Contaminants exists at a level which exceeds the
threshold for remediation established pursuant to a Tier 2 ASTM risk based
corrective action screening analysis, and (ii) no contamination by Hazardous
Substances exists at levels that exceed the threshold for remediation of such
substances established pursuant to a Tier 2 ASTM risk based corrective action
screening analysis.
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"RESIDUAL GUARANTY PAYMENT" means, as to any Unit of Property,
an amount equal to (i) at or before the end of the Lease Term, eighty-four
percent (84%) of the Acquisition Cost of such Unit or (ii) at the end of the
Extended Term, a percentage of the Acquisition Cost of such Unit to be agreed
to between the Lessee and the Lessor prior to the commencement of such Extended
Term; provided that for purposes of this definition, Acquisition Cost of each
Unit shall include the amount, if any, by which the Acquisition Cost of such
Unit under the Acquisition and Construction Agreement exceeds the Acquisition
Cost of such Unit under this Agreement and provided further that under no
circumstances shall the amount of such payment at the end of the Lease Term
exceed $83,999,986.00 (Eighty-Three Million Nine Hundred Ninety- Nine Thousand
Nine Hundred Eighty-Six Thousand Dollars) with respect to all Units of Property
originally subject to this Lease.
"RESIDUAL GUARANTY PAYMENT SUPPORT" means the Residual
Guaranty Payment Support, dated as of the date hereof, pursuant to which the
Guarantor guarantees to the Banks (as defined in the Financing Agreement) the
payment of all principal of, and interest on, the Term Loan A Notes (as defined
in the Financing Agreement), together with any and all other sums which are or
may become due pursuant to the Financing Agreement and any Related Document (as
defined in the Financing Agreement) with respect to the Term Loan A Notes.
"RESPONSIBLE OFFICER" means the Chief Executive Officer,
President, the Chief Operating Officer, any Vice President, Secretary or
Treasurer of the Lessee, or the Guarantor, as the context may require, or other
officer or similar official of the Lessee, or the Guarantor, as the context may
require, responsible for the administration of the obligations of the Lessee or
the Guarantor, as the context may require, with respect to this Lease.
"RETURN PROVISIONS" has the meaning set forth in paragraph (b)
of SECTION 12 hereof.
"SUBSTITUTION DATE" has the meaning set forth in paragraph (b)
of SECTION 32 hereof.
"SUBSTITUTION PROPERTY" has the meaning set forth in paragraph
(a) of SECTION 32 hereof.
"TAKING" has the meaning set forth in paragraph (a) of SECTION
16 hereof.
"TERMINATION PAYMENT" has the meaning set forth in SECTION
19(a) hereof.
"TRUST AGREEMENT" means the Trust Agreement dated as of July
30, 1996, pursuant to which the Trustee agrees to act as the limited partner of
the Lessor and to hold the trust property for the benefit of each Certificate
Holder.
"TRUSTEE" means the entity that acts as owner trustee pursuant
to the Trust Agreement and any successor or additional trustee.
"UNECONOMIC CONDITION" has the meaning set forth in SECTION
13.
"UNFUNDED BENEFIT LIABILITIES" shall mean, with respect to any
Plan at any time, the amount (if any) by which (i) the present value of all
"benefit liabilities" under such Plan as defined in Section 4001(a)(16) of
ERISA, exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plan (on the basis of the assumptions used in the most recent actuarial
valuation report for such Plans).
"UNIT" or "Unit of Property" means a specific unit or units of
Property.
"UNIT LEASING RECORD" means an instrument, substantially in
the form of EXHIBIT A hereto, evidencing the lease of any Unit of Property
under this Lease.
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SECTION 2 [Reserved].
SECTION 3 Lease of Property.
(a) The Lessor hereby agrees, upon satisfaction by the
Lessee of the conditions set forth in Section 6 of the Acquisition and
Construction Agreement, to lease to the Lessee, and the Lessee hereby agrees,
upon satisfaction of such conditions, to lease from the Lessor, pursuant to
this Lease, the relevant Unit for use as an office building or for other
commercial purposes or a retail fuel outlet/convenience store/car wash and
related uses such as quick service restaurants. Upon the execution of a Unit
Leasing Record pursuant to the Acquisition and Construction Agreement in
respect of the relevant Unit, the lease of such Unit pursuant to this Lease
shall commence.
(b) In the event that, following the commencement of the
lease with respect to a Unit, the Acquisition Cost of such Unit is increased
pursuant to the Acquisition and Construction Agreement following the making by
Owner thereunder of one or more additional advances, and a revised Unit Leasing
Record is executed in respect thereof pursuant to the Acquisition and
Construction Agreement, such increased Acquisition Cost with respect to such
Unit shall, from and after the date of execution of such revised Unit Leasing
Record, be used for all purposes of this Lease including, without limitation,
the payment of Basic Rent with respect thereto.
SECTION 4 Operating Lease.
The Lessor and the Lessee hereby declare that it is their
mutual intent that for accounting and regulatory purposes this Lease be treated
as an operating lease and not an instrument or evidence of indebtedness, and
that the relationship between the Lessor and the Lessee under this Lease shall
be that of lessor and lessee only. Legal title to any and all Property shall
at all times remain in the Lessor and at no time become vested in the Lessee
except in accordance with an express provision of this Lease.
SECTION 5 Disclaimer; Net Lease.
(a) The obligations of the Lessee to pay all amounts
payable pursuant to this Lease (including specifically and without limitation
amounts payable under SECTIONS 7 and 11 hereof) shall be absolute and
unconditional under any and all circumstances and such amounts shall be paid
without notice, demand, defense, setoff, deduction or counterclaim and without
abatement, suspension, deferment, diminution or reduction of any kind
whatsoever, except as herein expressly provided. The obligation of the Lessee
to lease and pay Basic Rent for any and all Property accepted for use pursuant
to this Lease is without any warranty or representation, express or implied, as
to any matter whatsoever on the part of the Lessor or any Assignee or any
Affiliate of either, or anyone acting on behalf of any of them.
THE LESSEE HAS SELECTED AND SHALL SELECT ALL PROPERTY ACQUIRED
OR ORDERED ON THE BASIS OF ITS OWN JUDGMENT. NEITHER THE LESSOR NOR ANY
ASSIGNEE NOR ANY AFFILIATE OF EITHER, NOR ANYONE ACTING ON BEHALF OF ANY OF
THEM MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR
IMPLIED, INCLUDING, WITHOUT LIMITATION, AS TO THE SAFETY, TITLE, CONDITION,
QUALITY, QUANTITY, FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO
SPECIFICATION, OR ANY OTHER CHARACTERISTIC, OF ANY PROPERTY, OR AS TO WHETHER
ANY PROPERTY OR THE OWNERSHIP, USE, OCCUPANCY OR POSSESSION THEREOF, COMPLIES
WITH ANY LAWS, RULES, REGULATIONS OR REQUIREMENTS OF ANY KIND.
AS BETWEEN THE LESSEE AND THE LESSOR, ANY ASSIGNEE OR ANY
INDEMNIFIED PERSON, THE LESSEE ASSUMES ALL RISKS AND WAIVES ANY AND ALL
DEFENSES, SET-OFFS, DEDUCTIONS, COUNTERCLAIMS (OR OTHER RIGHTS), EXISTING OR
FUTURE, AS TO ITS OBLIGATION
AMENDED AND RESTATED LEASE AGREEMENT - Page 9
11
TO PAY BASIC RENT AND ALL OTHER AMOUNTS PAYABLE HEREUNDER, INCLUDING, WITHOUT
LIMITATION, ANY RELATING TO:
(A) THE SAFETY, TITLE, CONDITION, QUALITY, QUANTITY,
FITNESS FOR USE, MERCHANTABILITY, CONFORMITY TO SPECIFICATION OR ANY OTHER
QUALITY OR CHARACTERISTIC OF ANY PROPERTY, LATENT OR NOT;
(B) ANY SET-OFF, COUNTERCLAIM, RECOUPMENT, ABATEMENT,
DEFENSE OR OTHER RIGHT WHICH THE LESSEE MAY HAVE AGAINST THE LESSOR, ANY
ASSIGNEE OR ANY INDEMNIFIED PERSON FOR ANY REASON WHATSOEVER ARISING OUT OF
THIS OR ANY OTHER TRANSACTION OR MATTER;
(C) ANY DEFECT IN TITLE OR OWNERSHIP OF PROPERTY OR ANY
TITLE ENCUMBRANCE NOW OR HEREAFTER EXISTING WITH RESPECT TO THE PROPERTY;
(D) ANY FAILURE OR DELAY IN DELIVERY OR ANY LOSS, THEFT
OR DESTRUCTION OF, OR DAMAGE TO, ANY PROPERTY, IN WHOLE OR IN PART, OR
CESSATION OF THE USE OR POSSESSION OF ANY PROPERTY BY THE LESSEE FOR ANY REASON
WHATSOEVER AND OF WHATEVER DURATION, OR ANY CONDEMNATION, CONFISCATION,
REQUISITION, SEIZURE, PURCHASE, TAKING OR FORFEITURE OF ANY PROPERTY, IN WHOLE
OR IN PART;
(E) ANY INABILITY OR ILLEGALITY WITH RESPECT TO THE USE,
OWNERSHIP, OCCUPANCY OR POSSESSION OF THE PROPERTY BY THE LESSEE;
(F) ANY INSOLVENCY, BANKRUPTCY, REORGANIZATION OR SIMILAR
PROCEEDING BY OR AGAINST THE LESSEE OR THE LESSOR OR ANY ASSIGNEE;
(G) ANY FAILURE TO OBTAIN, OR EXPIRATION, SUSPENSION OR
OTHER TERMINATION OF, OR INTERRUPTION TO, ANY REQUIRED LICENSES, PERMITS,
CONSENTS, AUTHORIZATIONS, APPROVALS OR OTHER LEGAL REQUIREMENTS;
(H) THE INVALIDITY OR UNENFORCEABILITY OF THIS LEASE OR
ANY OTHER INFIRMITY HEREIN OR ANY LACK OF POWER OR AUTHORITY OF THE LESSOR OR
THE LESSEE TO ENTER INTO THIS LEASE;
(I) THE INVALIDITY OR UNENFORCEABILITY OF ANY BILL OF
SALE EXECUTED IN CONNECTION WITH THIS LEASE OR ANY OTHER INFIRMITY THEREIN OR
LACK OF POWER OR AUTHORITY OF ANY PARTY THERETO TO ENTER INTO SUCH BILL OF
SALE; OR
(J) ANY OTHER CIRCUMSTANCES OR HAPPENING WHATSOEVER,
WHETHER OR NOT SIMILAR TO ANY OF THE FOREGOING.
THE LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ANY AND ALL RIGHTS WHICH IT MAY NOW HAVE OR WHICH AT ANY TIME
HEREAFTER MAY BE CONFERRED UPON IT, BY STATUTE OR OTHERWISE, TO TERMINATE,
CANCEL, QUIT, RESCIND OR SURRENDER THIS LEASE EXCEPT IN ACCORDANCE WITH THE
EXPRESS TERMS HEREOF. Each payment of Basic Rent, Additional Rent and any
other amount due hereunder made by the Lessee shall be final, and the Lessee,
without waiving any other remedies it may have, will not seek or have any right
to recover all or any part of such payment from the Lessor or any Assignee for
any reason whatsoever; provided that the foregoing shall not be construed as
requiring the Lessee to waive any cause of action against any (i) Assignee for
breach of any of such Assignee's representations or covenants contained in the
Financing Agreement or in any other agreement or instrument
AMENDED AND RESTATED LEASE AGREEMENT - Page 10
12
relating to the transactions contemplated hereby or thereby or (ii) or any
other Person arising out of the gross negligence or willful misconduct of such
Person.
(b) Notwithstanding any other provision contained in this
Lease, it is specifically understood and agreed that neither the Lessor nor any
Assignee nor any Affiliate of either, nor anyone acting on behalf of any of
them makes any warranties or representations or has any responsibility to
disclose any relevant information, or has any other responsibility or duty,
nor, except as set forth in SECTION 21 of this Lease, has the Lessor or any
Assignee or any Affiliate of either, or anyone acting on behalf of any of them
made any covenants or undertakings, as to the accounting treatment to be
accorded the Lessee or as to the U.S. Federal or any state income or any other
tax consequences, if any, to the Lessee as a result of or by virtue of the
transactions contemplated by this Lease. The parties, however, acknowledge
that Lessor has covenanted in the Letter Agreement, that it will not enter into
any transactions or other business other than the transactions contemplated
hereby and by the Financing Agreement.
(c) In the event the title insurance policy insuring the
Lessor's interest in any Unit of Property would not, in the absence of special
insurance by the Lessee, become effective until the date of recordation of the
deed, then the Lessee shall furnish such indemnity to the title insurance
company as it shall reasonably require in order to insure the Lessor's interest
in such Unit of Property, effective as of the date of the Effective Date.
SECTION 6 Interim Term; Basic Term.
(a) The "Interim Term" with respect to any Unit of
Property leased hereunder shall commence on the Effective Date set forth in the
Unit Leasing Record for such Unit of Property and shall continue until December
19, 2000, unless terminated earlier pursuant to SECTION 12, 13, 14, 15, 16, 19
or 32 hereof.
(b) The "Basic Term" with respect to any Unit of Property
shall commence on the day immediately following the last day of the Interim
Term of such Unit and shall continue until July 25, 2003, unless terminated
earlier pursuant to SECTION 12, 13, 14, 15, 16, 19 or 32 hereof.
(c) Notwithstanding the two preceding paragraphs of this
SECTION 6, if any Ground Lease is terminated prior to the expiration of the
then current term of such Ground Lease, then, as provided in paragraph (d) of
SECTION 28 hereof, the lease of any Unit of Property subject to such Ground
Lease shall terminate on the date of termination of such Ground Lease and all
of the other terms and provisions of paragraph (d) of SECTION 28 hereof shall
apply to such termination.
SECTION 7 Rent and Other Payments.
(a) The Lessee hereby agrees to pay to the Lessor (i) on
each Basic Rent Payment Date, Basic Rent for the calendar month (or part
thereof) in which such Basic Rent Payment Date falls, with respect to each Unit
of Property leased during any part of such calendar month hereunder for which
the Effective Date is before the Lease Rate Date for such calendar month, and
(ii) on the Basic Rent Payment Date in the next succeeding calendar month,
Basic Rent for any partial first calendar month, with respect to each Unit of
Property for which the Effective Date is on or after the Lease Rate Date for
such calendar month. In addition, without duplication of any amount payable
pursuant to the first sentence of this SECTION 7(a), the Lessee shall pay
interest at the default rate specified in the Financing Agreement on any amount
due hereunder that is not paid on the due date thereof, without taking into
account any grace periods specified herein.
(b) On the sixteenth (16th) day of each calendar month
or, if such day is not a Business Day, on the next succeeding Business Day (the
"LEASE RATE DATE") the Lessor shall provide to the Lessee the amount (together
with a detailed calculation) referred to in paragraph (A)(iii) of the
definition of "Basic Rent" in SECTION 1 hereof for such calendar month. Prior
to each Basic Rent Payment Date, the Lessor shall furnish to the Lessee a
summary of the calculations of Basic Rent payable on such Basic Rent Payment
Date.
AMENDED AND RESTATED LEASE AGREEMENT - Page 11
13
(c) The Lessee hereby agrees to pay on demand but upon
not less than thirty (30) days' written notice all amounts (other than Basic
Rent) due and payable to the Lessor or to any Indemnified Person pursuant to
SECTION 11 hereof.
(d) Without prejudice to the full exercise by the Lessor
of its rights under SECTIONS 18 and 19 hereof, the Lessee shall pay to the
Lessor from time to time, on demand, as additional rent ("ADDITIONAL RENT") (i)
amounts required to reimburse the Lessor for its obligations, costs and
expenses (not previously included in Acquisition Cost or Basic Rent) incurred
in acquiring, financing (including, without limitation, equity financing and
all costs required to be paid by the Lessor to a lender under the Financing
Agreement) and leasing the Property, (ii) the initial fee and annual ongoing
fees of the Trustee, and (iii) to the extent legally enforceable, an amount
computed by multiplying (A) all sums not paid by the Lessee to the Lessor as
provided in this Lease on or before the date such payments are due, by (B) the
decimal equivalent of the percentage referred to in paragraph (A)(iii) of the
definition of "Basic Rent" as most recently furnished by the Lessor, and by (C)
a fraction having a numerator equal to the number of days in the period from
but excluding such due date to and including the date of payment thereof and a
denominator of 365 or 366 in a leap year. The Lessee shall also pay to the
Lessor on demand an amount equal to any expenses incurred by the Lessor in
collecting such unpaid sums. To the extent that any of the obligations, costs
and expenses contemplated in this SECTION 7(d) are not specifically
attributable to Ultramar Inc., Ultramar Energy Inc., Diamond Shamrock Leasing,
Inc., Diamond Shamrock Arizona, Inc. or Diamond Shamrock Refining and Marketing
Company, those entities shall decide, in their sole discretion, which of them
shall be responsible for such obligations, costs and expenses; provided that
under all circumstances, as between those entities, responsibility shall be
allocated for one hundred percent (100%) of all such obligations, costs and
expenses and if those entities shall fail to decide within three (3) Business
Days of demand as to which of them shall be responsible, the Lessor may in its
sole discretion allocate such obligations, costs and expenses between them as
it deems appropriate.
(e) Basic Rent and Additional Rent and any other amount
payable by the Lessee to the Lessor shall be paid in full in immediately
available funds on the date due, to the account of the Lessor, or to the
account of such other Person as the Lessor may from time to time designate if
permitted by the Financing Agreement.
(f) During the Lease Term of any Unit of Property, the
Lessor shall provide detailed calculations to the Lessee on each Lease Rate
Date (except the first Lease Rate Date hereunder), of the difference, if any,
between (i) the Basic Rent paid by the Lessee for the previous calendar month
and (ii) an amount equal to what the Basic Rent would have been for such
calendar month had Basic Rent been calculated using the weighted average
interest rate per annum of all borrowings outstanding at any time (as specified
in subparagraph (A)(iii) of the definition of Basic Rent) during the previous
calendar month (rather than during the Computation Period); provided that with
respect to the Basic Rent for the last month of the Lease Term, the Lessor
shall make such calculation and provide the same to the Lessee on the last day
of the Lease Term. On or about February 16, 1997, and thereafter on or about
August 16 and February 16 of each year, and on the last day of the Lease Term,
the Lessor shall furnish to the Lessee a calculation of the aggregate
difference between the amounts determined under clause (i) above and the
correlating amounts determined under clause (ii) above (the "RECONCILIATION
AMOUNT") for each calendar month since the date of this Lease or each calendar
month since the last time the Reconciliation Amount was calculated, whichever
is later. The Lessor and the Lessee agree that if the Reconciliation Amount is
a positive number, then such amount shall be credited against the amount of
Basic Rent that the Lessee is required to pay on the next Basic Rent Payment
Date (or Basic Rent Payment Dates, if such amount shall exceed the amount of
Basic Rent payable in the next succeeding month), and if the Reconciliation
Amount is a negative number, then such amount shall be payable by the Lessee on
the next Basic Rent Payment Date in addition to the amount of Basic Rent due
and payable on such Basic Rent Payment Date (and treated as Basic Rent for
purposes of this Lease) except that with respect to the Reconciliation Amount
computed on the last day of the Lease Term, such amount shall be paid by the
Lessor to the Lessee (in the case of a positive number) or by the Lessee to the
Lessor (in the case of a negative number) on the last day of the Lease Term.
Subject to Lessee's verification rights set forth below in this SECTION 7(f),
any notices required by this paragraph (f) which are furnished to the Lessee by
the Lessor shall be conclusive, absent manifest error, as to the contents
thereof. The Lessee shall have the right to verify calculations by the Lessor
of any Reconciliation Amount
AMENDED AND RESTATED LEASE AGREEMENT - Page 12
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and may, by written notice to the Lessor, request such information as is
necessary to conduct such verification. In the event that the Lessee elects to
exercise such verification rights, the Lessee shall, nevertheless, continue to
pay the Reconciliation Amount as calculated by the Lessor pending such
verification and if such verification subsequently results in a reduction in
the Reconciliation Amount that the Lessee should have paid, then such excess
Reconciliation Amount shall be credited against the next payment of
Reconciliation Amount to be made by the Lessee hereunder; provided that with
respect to the last such payment during the Lease Term, the Lessor shall
provide the relevant calculations to the Lessee with sufficient advance notice
such that such a verification can be completed and any adjustments resulting
therefrom can be made no later than such last day of the Lease Term.
SECTION 8 Restricted Use and Sublease; Compliance with
Laws.
(a) So long as no Event of Default shall have occurred
and be continuing, the Lessee may use the Property in the regular course of its
business for any lawful purpose. The Lessee will not do or permit any act or
thing which might impair other than in the normal use thereof, the value or
usefulness of any Property.
(b) The Lessee shall promptly and duly execute, deliver,
file and record, at the Lessee's expense, all such documents, statements,
filings and registrations, and take such further action, as the Lessor shall
from time to time reasonably request in order to establish, perfect and
maintain the Lessor's title to and interest in the Property and any Assignee's
interest in this Lease or any Property as against the Lessee or any third party
in any applicable jurisdiction.
(c) The Lessee shall use commercially reasonable efforts
to prevent injury to third persons or property of third persons. The Lessee
shall cooperate fully with the Lessor and all insurance companies providing
insurance pursuant to SECTION 10 hereof in the investigation and defense of any
claims or suits arising from the ownership, operation, occupancy or use of any
Property; provided that nothing contained in this paragraph (c) shall be
construed as imposing on the Lessor any duty to investigate or defend any such
claims or suits. The Lessee shall comply, and shall use commercially
reasonable efforts to cause all Persons using, occupying or operating Property
to comply, with all Insurance Requirements and Legal Requirements applicable to
such Property and to the acquiring, titling, registering, leasing, subleasing,
insuring, using, occupying, operating and disposing of Property, and the
licensing of operators thereof.
(d) The Lessor or any Assignee or any authorized
representative of either, may, no more often than once in any twelve (12)
consecutive month period, unless an Event of Default has occurred and is
continuing, during reasonable business hours (unless an Event of Default has
occurred and is continuing), inspect Property and Permits and related documents
covering Property wherever the same may be located, but neither the Lessor nor
any Assignee shall have any duty to make any such inspection.
(e) The Lessee shall not, without the prior written
consent of the Lessor, permit, or suffer to exist, and shall promptly remove
and discharge any Lien, including mechanics' liens (other than Permitted Liens
or those Liens placed thereon by, or arising from, the Lessor's own actions or
which are subject to a Permitted Contest), and the Lessee shall not assign any
right or interest herein or in any Property or in the leasehold interest in any
Ground Lease, or its obligations in respect of Basic Rent or any other sum
payable under this Lease or the Acquisition and Construction Agreement. The
Lessee shall not, without the prior written consent of the Lessor, which
consent shall not be unreasonably withheld or denied, sublease or otherwise
relinquish possession of any Property, except that (i) the Lessee may
relinquish possession of any Property to any contractor for use in performing
work for the Lessee on such Property; provided that such relinquishment of
possession shall in no way affect the obligations of the Lessee or the rights
of the Lessor hereunder or with respect to the Property or any obligation of
the Guarantor under the Guaranty with respect thereto and (ii) the Lessee may
sublease any Property so long as (A) no such sublease shall modify or limit any
right or power of the Lessor hereunder or affect or reduce any obligation of
the Lessee hereunder, and all such obligations shall continue in full force and
effect as obligations of a principal and not of a guarantor or surety, as
though no such subletting had been made and (B) the Guarantor shall remain
liable for the payment and
AMENDED AND RESTATED LEASE AGREEMENT - Page 13
15
performance of the Lessee under this Lease or any Ground Lease. Any sublease
made otherwise than as expressly permitted by this paragraph (e) shall be void
and of no force and effect. As additional security to the Lessor for the
performance of the Lessee's obligations under this Lease, the Lessee hereby
assigns to the Lessor all of its right, title and interest in and to all
subleases permitted hereby. Unless an Event of Default shall have occurred and
be continuing hereunder, the Lessee shall be entitled to collect and enjoy such
rents and other sums; upon the occurrence of an Event of Default, the Lessor
shall have the present and continuing right to collect and enjoy all rents and
other sums of money payable under any such sublease as long as such Event of
Default is continuing, and the Lessee hereby irrevocably assigns such rents and
other sums to the Lessor for the benefit and protection of the Lessor. The
Lessee shall, within thirty (30) days after the execution of any such sublease,
deliver a conformed copy thereof to the Lessor. Nothing contained in this
Lease shall be construed as constituting the consent or request of the Lessor,
express or implied, to or for the performance by any contractor, laborer,
materialman or vendor of any labor or services or for the furnishing of any
materials for any construction, alteration, addition, repair or demolition of
or to any Property or any part thereof. Notice is hereby given that the Lessor
will not be liable for any labor, services or materials furnished or to be
furnished to the Lessee, or to anyone holding any Property or any part thereof
through or under the Lessee, and that no mechanics' or other liens for any such
labor, services or materials shall attach to or affect the interest of the
Lessor in and to the Property.
(f) If any Lien or charge of any kind or any judgment,
decree or order of any court or other governmental authority (including,
without limitation, any state or local tax lien affecting the Property),
whether or not valid, shall be asserted or entered which might interfere with
the due and timely payment of any sum payable or the exercise of any of the
rights or the performance of any of the duties or responsibilities under this
Lease, the Lessee shall, upon obtaining knowledge thereof or upon receipt of
notice to that effect from the Lessor and subject to SECTION 27 hereof,
promptly take such action as may be necessary to prevent or terminate such
interference.
(g) Unless otherwise required by law, all documents
submitted to or filed with or generated pursuant to the requirements of any
Environmental Agency shall be filed solely in the name of the Lessee or of the
previous owner(s) or operator(s) of each Remediation Property, if such previous
owner(s) or operator(s) are or may be liable or responsible, by law, contract
or otherwise, for remediation of such Remediation Property. In the event that
the Lessee obtains a formal determination from an Environmental Agency that
remediation is complete with respect to a Remediation Property, the Lessee
shall promptly deliver a copy thereof to the Lessor and any Assignee.
SECTION 9 Maintenance, Improvement and Repair of
Property.
(a) The Lessor hereby assigns and otherwise makes
available to the Lessee any and all rights the Lessor may have under any
vendor's or manufacturer's warranties or undertakings with respect to any
Property; provided that upon the occurrence of an Event of Default, the Lessee
shall, upon the request of the Lessor, relinquish all rights in any such
warranties or undertakings to the Lessor and shall, in such connection, execute
such documents as the Lessor may reasonably request.
(b) The Lessee shall pay all costs, expenses, fees and
charges incurred in connection with the ownership, use, occupancy or operation
of any Unit of Property. Except as otherwise provided in SECTION 15 hereof,
the Lessee shall at all times, at its own expense, and subject to ordinary wear
and tear, keep all Property in good operating order, repair, condition and
appearance and maintain all Property in accordance with prudent industry
standards and in a manner consistent with that of other similar facilities
owned or operated by it or its affiliates. The foregoing undertaking to
maintain Property in good repair shall apply regardless of the cause
necessitating repair and regardless of whether the Lessee has possession of the
Property, and as between the Lessor and the Lessee, all risks of damage to
Property are assumed by the Lessee. With respect to any Unit of Property, the
undertaking to maintain in good repair shall include, without limitation, all
interior and exterior repairs, whether structural or nonstructural, foreseen or
unforeseen, ordinary or extraordinary and all common area maintenance,
including, without limitation, replacement of worn out parts of Property,
removal of dirt, snow, ice, rubbish and other obstructions and maintenance of
sidewalks and landscaping. The Lessee hereby agrees to indemnify and hold the
Lessor harmless from and against
AMENDED AND RESTATED LEASE AGREEMENT - Page 14
16
all costs, expenses, claims, losses, damages, fines or penalties, including
reasonable counsel fees, arising out of or due to the Lessee's failure to
fulfill its obligations under this paragraph (b).
(c) With respect to any Unit of Property, the Lessee
shall pay: all property taxes, sales, use and value-added taxes, assessments,
levies, fees, water and sewer rents and charges, and all other governmental
charges, general and special, ordinary and extraordinary, foreseen and
unforeseen, which are, at any time, imposed or levied upon or assessed against
(A) such Unit or (B) any Basic Rent, any Additional Rent or other sum payable
hereunder or this Lease, the leasehold estate hereby created, and all charges
of utilities and communications services serving such Unit. The Lessee will
furnish to the Lessor, promptly after demand therefor, proof of payment of all
items referred to above which are payable by the Lessee. If any such
assessments may legally be paid in installments, the Lessee may pay such
assessment in installments; provided that unless the Lessee has irrevocably
committed or is required to, and does, purchase such Unit on or prior to the
expiration or earlier termination of the Lease Term or any Extended Term, all
assessments referred to in this paragraph (c) shall be paid in full prior to
the expiration or earlier termination of the Lease Term or any Extended Term.
(d) So long as no Event of Default shall have occurred
and be continuing, the Lessee may, at its expense, make additions to and
alterations to any Unit of Property; provided that upon completion of such
additions or alterations (i) neither the fair market value of the Unit of
Property shall be lessened thereby nor the condition of such Unit of Property
impaired, below the value, utility or condition thereof immediately prior to
such action (assuming such Unit of Property was then of a condition and repair
required to be maintained pursuant to paragraph (b) of this SECTION 9), and
(ii) such work shall be completed in a good and workmanlike manner and shall be
in compliance with all applicable Legal Requirements and Insurance
Requirements. Any and all such additions and alterations shall be and remain
part of the Unit of Property and shall be subject to this Lease, except that
any addition to Property made by the Lessee shall remain the property of the
Lessee if it can be removed from such Property without causing an unrepaired
material impairment of the functioning of such Property or its resale value,
excluding such addition. Any improvements or additions which do not remain the
property of the Lessee shall be evidenced by a revised Unit Leasing Record.
(e) The Lessee agrees to use and operate each Unit such
that the fair market value of such Unit is not lessened as a result of any
change in the nature of use and operation of any such Unit as compared to the
fair market value that such Unit would have had such Unit been used in the same
manner as contemplated at the inception of this Lease.
(f) The Lessee may, from time to time, replace any
equipment, furnishings or fixtures used in connection with any Unit with
similar or different equipment, furnishings or fixtures so long as such
replacement property (i) is of equal or greater value, in the Lessee's good
faith judgment, as compared to the replaced property and (ii) will be in such
condition so as to enable the Lessee to use and operate each such Unit for the
same general purpose as contemplated at the inception of this Lease. As any
equipment, furnishing or fixture is substituted at a Unit pursuant to this
paragraph (f), title to such substitute property shall automatically be
transferred to the Lessor and such substitute property shall be subject to this
Lease and title to the replaced equipment, furnishing or fixture shall be
automatically transferred by the Lessor to the Lessee.
SECTION 10 Insurance.
(a) Commercial General Liability Insurance. The Lessee
will carry at its own expense comprehensive commercial general liability
insurance covering the legal liability of the Lessor and the Lessee against
claims for bodily injury, death or property damage, occurring on, in or about
each Unit of Property or occurring as a result of ownership of facilities
located on each Unit of Property or as a result of the use of products or
materials manufactured, stored, processed, constructed or sold, or services
rendered, (i) in an amount which is consistent with prudent industry practice
but, in any event, not less than the commercial general liability insurance
applicable to similar property owned, leased or held by the Lessee; provided
that in no event shall such amounts be less than
AMENDED AND RESTATED LEASE AGREEMENT - Page 15
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$15,000,000 per occurrence, (ii) of the types usually carried by corporations
engaged in the same or a similar business, similarly situated with the Lessee,
and owning or operating similar property and which cover risk of the kind
customarily insured against by such corporations, and (iii) which is maintained
in effect with insurers of recognized responsibility reasonably satisfactory to
the Lessor.
(b) All Risk Property Insurance. The Lessee will maintain
in effect with insurers of recognized responsibility reasonably satisfactory to
the Lessor, at its own expense, physical damage insurance with respect to each
Unit of Property, which is of the type usually carried by corporations engaged
in the same or similar business, similarly situated with the Lessee, and owning
or operating similar property and which covers risk of the kind customarily
insured against by such corporations, and in substantially the amount
applicable to similar property owned, leased or held by the Lessee; provided
that such insurance shall at all times be in an amount not less than the
Termination Payment with respect to such Unit. Such insurance shall include
all risk insurance coverage against losses by fire, lightning, explosion and
other risks for the full insurable replacement value of such Unit, with agreed
amount endorsement or endorsements providing equivalent protection, including
loss by windstorm, flood, hail, explosion, riot (including riot attending a
strike), civil commotion, aircraft, vehicles, smoke damage, and vandalism and
malicious mischief, in amounts not less than the full insurable replacement
value of all buildings and other improvements on such Unit, but in no event
less than the Acquisition Cost of such Unit. The term "full insurable
replacement value" as used herein means the actual replacement cost, including
the costs of debris removal, but excluding the cost of constructing foundation
and footings.
(c) Other Policies. The Lessee shall comply with
applicable workers' compensation laws of the states where each Unit of Property
is located, and shall maintain such insurance if and to the extent necessary
for such compliance. The Lessee will maintain explosion and machinery
insurance in respect of any boilers and similar apparatus located on each Unit
in the minimum amount of $250,000 or in such greater amounts as are then
customary for property similar in use to such Unit.
(d) Self-Insurance; Adjustments. Notwithstanding the
foregoing, the Lessee may self-insure (i) with respect to the required coverage
for physical damage insurance, for up to $5,000,000 with respect to any one
occurrence, and (ii) with respect to the required coverage for liability
insurance, for up to $10,000,000 with respect to any one occurrence. Insurance
claims by reason of damage or destruction to any Unit of Property shall be
adjusted by the Lessee unless a Potential Default or an Event of Default has
occurred and is continuing.
(e) Additional Insureds; Notice. Any policies of
insurance carried in accordance with this SECTION 10 and any policies taken out
in substitution or replacement for any such policies (i) shall name the Lessor,
the general partner of the Lessor and its members, officers and directors, the
limited partners of the Lessor, the Trustee, each Certificate Holder, the
Assignee and each Lender as additional insureds, as their respective interests
may appear (but without imposing upon any such Person any obligation imposed on
the insured, including, without limitation, the liability to pay the premium
for any such policy), (ii) with respect to insurance carried in accordance with
the preceding paragraph (b), shall name the Assignee, if any, and the Lessor as
loss payees, (iii) with respect to insurance carried in accordance with the
preceding paragraphs (a) and (b), shall provide that as against the Lessor the
insurers shall waive any rights of subrogation, (iv) shall provide that if the
insurers cancel such insurance for any reason whatsoever, or any substantial
change is made in the coverage, such cancellation, or change shall not be
effective as to the Lessor, the general partner of the Lessor, and its members,
officers and directors, the limited partners of the Lessor, the Trustee, any
Certificate Holder, the Assignee or any Lender for thirty (30) days after
receipt by the Lessor, the general partner of the Lessor, and its members,
officers and directors, the limited partners of the Lessor, the Trustee, any
Certificate Holder, any Lender or such Assignee, as the case may be, of written
notice by such insurers of such cancellation or change and (v) shall provide
that in respect of the interest of the Lessor, the general partner of the
Lessor, and its members, officers and directors, the limited partners of the
Lessor, the Trustee, any Certificate Holder, the Assignee and any Lender, in
such policies, the insurance shall not be invalidated by any action or inaction
of the Lessee or any other Person (other than of the Lessor, the general
partner of the Lessor, and its members, officers and directors, the limited
partners of the Lessor, the Assignee or any Lender in respect of its
AMENDED AND RESTATED LEASE AGREEMENT - Page 16
18
own interest) and shall insure the interests of the Lessor, the general partner
of the Lessor, and its members, officers and directors, the limited partners of
the Lessor, the Trustee, any Certificate Holder, the Assignee and any Lender,
as they appear, regardless of any breach or violation of any warranties,
declarations or conditions contained in such policies by the Lessee or any
other Person. Each liability policy (A) shall be primary without right of
contribution from any other insurance which is carried by the Lessor with
respect to its interest as such in the Property and (B) shall expressly provide
that all of the provisions thereof, except the limits of liability, shall
operate in the same manner as if there were a separate policy covering each
insured.
(f) Application of Insurance Proceeds for Loss or Taking.
As between the Lessor and the Lessee it is agreed that any insurance payments
received as the result of the occurrence of (i) any event of loss described in
paragraph (c) of SECTION 15 hereof with respect to any Unit of Property, or
(ii) any event of Taking described in SECTION 16 hereof shall be paid to an
account of the Lessor and disposed of, as set forth in paragraph (c) of SECTION
15 hereof.
(g) Application of Insurance Proceeds for Other than Loss
or Taking. As between the Lessor and the Lessee, the insurance proceeds of any
property damage loss to any Property in excess of $3,000,000 (Three Million
Dollars) will be held in an account of the Lessor and applied in payment (or to
reimburse the Lessee) for repairs or replacement in accordance with the terms
of paragraph (b) of SECTION 15 hereof. The Lessee shall be entitled (i) to
receive the amounts so deposited against certificates, invoices or bills
reasonably satisfactory to the Lessor, delivered to the Lessor from time to
time as such work or repair progresses, and (ii) to direct the investment of
the amounts so deposited as provided in paragraph (g) of this SECTION 10. Any
moneys remaining in the aforesaid account after final payment for repairs has
been made shall be paid to the Lessee.
(h) Investment. The Lessor, at the Lessee's instruction,
shall invest the amounts deposited with the Lessor pursuant to paragraph (f) of
this SECTION 10 in any investments permitted under the Financing Agreement.
Such investments shall mature in such amounts and on such dates so as to
provide that amounts shall be available on the draw dates sufficient to pay the
amounts requested by and due to the Lessee. Any interest earned on investments
of such funds shall be paid to the Lessee. The Lessor shall not be liable for
any loss resulting from the liquidation of each and every such investment and
the Lessee shall bear the risk of such loss, if any.
(i) Application in Default. Any amount referred to in
paragraphs (d), (e) or (f) of this SECTION 10 which is payable to the Lessee
shall not be paid to the Lessee or, if it has been previously paid to the
Lessee, shall not be retained by the Lessee, if at the time of such payment an
Event of Default shall have occurred and be continuing. In such event, all
such amounts shall be paid to and held by the Lessor as security for the
obligations of the Lessee hereunder or, at the Lessor's option, applied by the
Lessor toward payment of any of such obligations of the Lessee at the time due
hereunder as the Lessor may elect. At such time as there shall not be
continuing any Event of Default, all such amounts at the time held by the
Lessor in excess of the amount, if any, which the Lessor shall have elected to
apply as above provided shall be paid to the Lessee.
(j) Certificates, etc. On or before the execution of
this Lease, on the Effective Date with respect to any Unit of Property, and
annually on or before the anniversary of the date of this Lease, the Lessee
will furnish to the Lessor certificates or other evidence from the Lessee's
independent insurance brokers certifying that the insurance then carried and
maintained on each Unit of Property complies with the terms hereof.
(k) Prosecution of Claims. The Lessee may, at its own
cost and expense, prosecute any claim against any insurer or contest any
settlement proposed by any insurer, and the Lessee may bring any such
prosecution or contest in the name of the Lessor, the Lessee, or both, and the
Lessor will join therein at the Lessee's request; provided that the Lessee
shall indemnify the Lessor against any losses, costs or expenses (including
reasonable attorneys' fees) which the Lessor may incur in connection with such
prosecution or contest.
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SECTION 11 Indemnities.
The Lessee shall indemnify and hold harmless the Lessor, the
Trustee, each Certificate Holder, the Assignee and each Lender, any successor
or successors, and any Affiliate of each of them, and their respective
officers, directors, shareholders, members, partners (general and limited,
including, without limitation, the general and limited partners of the Lessor),
employees, agents and servants (each of the foregoing, an "INDEMNIFIED PERSON")
from and against all liabilities (including, without limitation, strict
liability in tort or under any Environmental Law), taxes (to the extent set
forth in SECTION 11(c) below), losses, obligations, claims, damages, penalties,
causes of action, suits, costs and expenses (including, without limitation,
reasonable fees and expenses of attorneys and accountants so long as, unless an
Event of Default shall have occurred and be continuing, such attorneys and
accountants were hired with the prior written consent of the Lessee or the
Guarantor, not to be unreasonably withheld) or judgments of any nature
(collectively, "EXPENSES") relating to or in any way arising out of:
(a) The ordering, design, delivery, acquisition,
construction, maintenance, title on acquisition, rejection, installation,
possession, titling, retitling, registration, reregistration, custody by the
Lessee of title and registration documents, ownership, use, non-use, misuse,
financing, lease, sublease, operation, transportation, repair, reconstruction,
control, lease under a Ground Lease, or disposition, including, without
limitation, disposition at the end of any Basic Term or Extended Term of any
Property or the presence of or the release of Contaminants or Hazardous
Substances on, under, to or from, or the generation or transportation of
Contaminants or Hazardous Substances to or from, or the failure to report,
disclose or remediate the foregoing with respect to any Property, leased or to
be leased hereunder (including, without limitation, any costs, claims, or
liabilities arising under any Federal, state or local Environmental Law, rule
or regulation, relating to the ownership, financing or use of any Property),
except (i) to the extent that such costs are included in the Acquisition Cost
of such Property, (ii) for any general administrative expenses of the Lessor,
(iii) taxes (the sole indemnification for which is acknowledged by the Lessor
and each Indemnified Person to be provided under paragraph (c) of this SECTION
11) and (iv) that this indemnity shall not increase any payment required to be
made by the Lessee pursuant to SECTION 12 of this Lease;
(b) The assertion of any claim or demand based upon any
infringement or alleged infringement of any patent or other right, by or in
respect of any Property; provided, however, that upon request of the Lessee,
the Lessor will make available to the Lessee the Lessor's rights under any
similar indemnification arising from any manufacturer's or vendor's warranties
or undertakings with respect to any Property;
(c) All U.S. Federal, state, county, municipal, or other
fees and taxes of whatsoever nature, including, but not limited to, license,
qualification, franchise, withholding, sales, use, gross income, gross
receipts, ad valorem, business, personal property, real estate, value added,
excise, motor vehicle, occupation fees and stamp or other taxes or tolls of any
nature whatsoever, and penalties and interest thereon, whether assessed, levied
against or payable by the Lessor or otherwise, with respect to any Property or
the acquisition, purchase, sale, rental, use, operation, control, ownership or
disposition of any Property (including, without limitation, any claim by any
Governmental Authority for transfer tax, transfer gains tax, mortgage recording
tax, filing or other similar taxes or fees in connection with the acquisition
of any Property by the Lessor or otherwise in connection with this Lease) or
measured in any way by the value thereof or by the business of, investment in,
or ownership by the Lessor with respect thereto; provided that this indemnity
shall not apply to Federal, state or local net income taxes with respect to the
receipt or accrual of Basic Rent (or amounts payable from Basic Rent), interest
or fees or to franchise or other doing business taxes imposed against any
Indemnified Person, in each case by a jurisdiction in which the Indemnified
Person would be subject to such taxes without regard to the use or location of
any Property in such jurisdiction or the activities of the Lessee in such
jurisdiction; provided that notwithstanding the foregoing, the Lessee shall
indemnify the Lessor for the imposition of New York City unincorporated
business tax on the Lessor due to a determination that this transaction, or the
management of the Lessor with respect thereto, gives rise to a taxable
unincorporated business in New York City; or
AMENDED AND RESTATED LEASE AGREEMENT - Page 18
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(d) Any violation or alleged violation by the Lessee of
this Lease or of any contracts or agreements to which the Lessee is a party or
by which it is bound or of any laws, rules, regulations, orders, writs,
injunctions, decrees, consents, approvals, exemptions, authorizations, licenses
and withholdings of objection, of any governmental or public body or authority
and all other Legal Requirements.
The Lessee shall, no later than thirty (30) days following
demand, reimburse any Indemnified Person for any sum or sums expended with
respect to any of the foregoing or, upon request from any Indemnified Person,
shall pay such amounts directly, not later than five (5) Business Days prior to
the due date for such indemnified amount. Any payment made to or on behalf of
any Indemnified Person pursuant to this SECTION 11 shall be adjusted to such
amount as will, after taking into account all taxes imposed with respect to the
accrual or receipt of such payment (as the same may be increased pursuant to
this sentence), and all tax savings actually and currently realized as a result
of the payment of such taxes or the deductibility of the underlying indemnified
item including, without limitation, by way of the deductibility or ability to
credit items payable from Additional Rent, equal the amount of the payment. To
the extent that the Lessee in fact indemnifies any Indemnified Person under the
indemnity provisions of this Lease, the Lessee shall be subrogated to such
Indemnified Person's rights in the affected transaction and shall have a right
to determine the settlement of claims therein. In addition, if any Indemnified
Person determines in its reasonable discretion that as a result of an event
giving rise to the Lessee's indemnification obligations hereunder, it has
realized a tax benefit (by way of refund, deduction, credit, allocation,
apportionment or otherwise including, without limitation, the deductibility or
ability to credit items payable from Additional Rent) that was not otherwise
taken into account in calculating the amount of Lessee's indemnification
payments, then, as long as no Event of Default has occurred and is continuing,
such Indemnified Person shall pay the amount of such tax benefit promptly to
the Lessee, together with any additional benefit arising from the payment to
the Lessee hereunder.
The indemnities contained in this SECTION 11 shall not be
affected by any termination of this Lease as a whole or in respect of any Unit
of Property leased hereunder or any failure or refusal of the Lessee to accept
any Property acquired or ordered pursuant to the terms hereof.
Notwithstanding any provisions of this SECTION 11 to the
contrary, the Lessee shall not indemnify and hold harmless any Indemnified
Person against any taxes, claims and liabilities which would not have occurred
but for the following: (A) in the case of the Assignee and any Lender, any
representation or warranty by the Assignee or such Lender in the Financing
Agreement or in any other document related to this transaction being incorrect
in any material respect; or in the case of the Lessor (or any partner in the
Lessor), the failure of the Lessor to comply with its covenant set forth in the
Letter Agreement that it will not enter into transactions other than those
contemplated by the Agent Documents and the Financing Agreement, (B) in the
case of the Assignee or any Lender, the failure by such Indemnified Person to
perform or observe any agreement, covenant or condition contained herein or in
any other document related to this transaction in any material respect, (C) the
willful misconduct or the gross negligence of such Indemnified Person, (D) a
voluntary or involuntary disposition (other than a disposition during the
continuance of an Event of Default) by such Indemnified Person of all or any
part of its interest in any Property (other than as contemplated by this
Agreement or the Financing Agreement).
Nothing in this SECTION 11 shall be construed as a guaranty by
the Lessee of the market value of any Property.
If a claim is made against an Indemnified Person involving one
or more Expenses and such Indemnified Person has notice thereof, such
Indemnified Person shall promptly, upon receiving such notice, give notice of
such claim to the Lessee; provided that the failure to provide such notice
shall not release the Lessee from any of its obligations hereunder, and no
payment by the Lessee to an Indemnified Person pursuant to this SECTION 11
shall be deemed to constitute a waiver or release of any right or remedy which
the Lessee may have against such Indemnified Person for any actual damages as a
result of the failure by such Indemnified Person to give the Lessee such
notice. The Lessee shall be entitled, at its sole cost and expense, acting
through counsel reasonably acceptable to the relevant Indemnified Person, (A)
in any judicial or administrative proceeding that involves solely a claim for
AMENDED AND RESTATED LEASE AGREEMENT - Page 19
21
one or more Expenses, to assume responsibility for and control thereof, (B) in
any judicial or administrative proceeding involving a claim for one or more
Expenses and other claims related or unrelated to the transactions contemplated
by this Agreement, to assume responsibility for and control of such claim for
Expenses, to the extent that the same may be and is severed from such other
claims (and such Indemnified Person shall use its best efforts to obtain such
severance), and (C) in any other case, to be consulted by such Indemnified
Person with respect to judicial proceedings subject to the control of such
Indemnified Person. Notwithstanding anything in the foregoing to the contrary,
the Lessee shall not be entitled to assume responsibility for and control of
any such judicial or administrative proceedings (x) while an Event of Default
shall have occurred and be continuing; (y) if such proceedings will involve any
risk of criminal liability or a material risk of the sale, forfeiture or loss
of any Property; or (z) to the extent that the Indemnified Person has defenses
available to it which are not available to the Lessee and allowing the Lessee
to assert such defenses will be prejudicial to the interests of such
Indemnified Person; provided that the limitation on the Lessee's ability to
control such judicial or administrative proceeding shall apply only to those
aspects of such proceeding which address issues with respect to which such
defenses are available.
The relevant Indemnified Person shall supply the Lessee with
such information reasonably requested by the Lessee as is necessary or
advisable for the Lessee to control or participate in any proceeding to the
extent permitted by this SECTION 11. Such Indemnified Person shall not enter
into a settlement or other compromise with respect to any Expense without the
prior written consent of the Lessee, which consent shall not be unreasonably
withheld or delayed, unless such Indemnified Person waives its right to be
protected with respect to such Expense under this SECTION 11.
To the extent that any of the Expenses contemplated in this
SECTION 11 are not specifically attributable to either Ultramar Inc., Ultramar
Energy Inc., Diamond Shamrock Leasing, Inc., Diamond Shamrock Arizona, Inc., or
Diamond Shamrock Refining and Marketing Company, those entities shall decide,
in their sole discretion, which of them shall be responsible for such Expenses;
provided that under all circumstances, as between those entities,
responsibility shall be allocated for one hundred percent (100%) of all such
Expenses and if those entities shall fail to decide within three (3) Business
Days of demand as to which of them shall be responsible, the Lessor may in its
sole discretion allocate such Expenses between them as it deems appropriate.
SECTION 12 Lease Expiration.
(a) In the event the Lessee has not notified the Lessor
that it intends to purchase all Property under this Lease pursuant to SECTION
13 hereof and the Lessee desires to terminate this Lease with respect to such
Property, the Lessee shall provide notice to the Lessor of its intention to
exercise such right at least twelve (12) months prior to the expiration of the
Lease Term or the Extended Term, as the case may be.
(b) In the event that the Lessee provides the termination
notice contemplated in paragraph (a) above, the Lessor's obligations under this
SECTION 12 shall be subject to satisfaction of the following conditions (the
"RETURN PROVISIONS"): (A) on the Lease Termination Date, (i) no Event of
Default or Potential Default shall have occurred and be continuing, (ii) no
Unit of Property shall be undergoing any repairs, additions or alterations that
would have an adverse effect on the fair market value of such Unit of Property
and (iii) each Unit of Property shall be in compliance with all Legal
Requirements, except any Legal Requirements, the non-compliance with which,
individually or in the aggregate, (1) will not place either the Lessor or any
Assignee in any danger of civil liability for which the Lessor or any Assignee
is not adequately indemnified (the Lessee's obligations under SECTION 11 of
this Lease shall be deemed to be adequate indemnification if no Event of
Default exists and if the aggregate amount of such civil liability for which
such Person is not indemnified by bond or otherwise is reasonably likely to be
less than $300,000 with respect to all Units or subject the Lessor or any
Assignee to any risk of criminal liability as a result of a failure to comply
therewith, (2) will not decrease by any amount the fair market value of the
Unit, (3) is consistent with prudent business practices, and (4) is not
prohibited under the provisions of any Ground Lease relating to such Unit, (B)
on or prior to the Lease Termination Date, the Lessee shall deliver to the
Lessor a report of an independent environmental consultant (which may be
selected by the Lessor and shall be at the expense of the Lessee),
AMENDED AND RESTATED LEASE AGREEMENT - Page 20
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which report of such consultant shall be satisfactory in scope and substance to
the Lessor, the Assignee and the Certificate Holders, each in its sole
discretion addressing the environmental hazards or liabilities associated with
such Unit of Property, (C) on or prior to the Lease Termination Date, the
Lessee shall deliver to the Lessor a report of an independent appraiser (which
may be selected by the Lessor and shall be at the expense of the Lessee;
provided that the report of such appraiser shall be satisfactory in scope and
content to the Lessor, the Assignee and the Certificate Holders, each in its
sole discretion), to the effect that each Unit of Property under this Lease (i)
has been maintained in accordance with the terms and conditions of SECTION 9 of
this Lease and has not been subjected to any wear and tear in excess of that
attributable to normal use and (ii) meets or exceeds the design specifications
listed in the appraisal provided to the Lessor and the Assignee pursuant to
Section 4 of the Acquisition and Construction Agreement, and includes all items
of personal property contemplated by such appraisal and (D) the Lessee shall
take all steps as are required to transfer to, or to procure on behalf of, the
Lessor, or a designee of the Lessor, all required Permits and to bring the
Property into conformity with all Legal Requirements and Insurance Requirements
for occupancy and use as a retail fuel outlet convenience store/car wash or
office building and other commercial use and related uses of the kind
contemplated by the appraisal required pursuant to clause (C) above.
In the event the Lessee fails to comply with any of the Return
Provisions, the Lessee shall, on the Lease Termination Date, purchase all
Property from the Lessor for an amount equal to the Termination Payment. In
connection with any such purchase, the Lessee shall pay to the Lessor the
Termination Payment, all Basic Rent payable and any Additional Rent and all
other amounts owing hereunder. Lessor and Lessee agree that this provision is
of the essence of this Agreement and that specific performance is the only
remedy sufficient to enforce the parties' intention in this regard.
(c) In the event the Lessee has complied with each of the
Return Provisions, the Lessee shall, on the Lease Termination Date, terminate
this Lease with respect to all Property, surrender such Property to the Lessor
and pay to the Lessor the Residual Guaranty Payment with respect to such
Property and all other amounts owing by the Lessee hereunder. Upon such
surrender, the Lessor shall sell such Property to a third party on an arms
length basis and the Lessee shall have no further right, claim or interest in
such Property (it being understood that the Lessor shall be entitled to
commence the marketing of such Property at any time subsequent to the receipt
of the termination notice contemplated in paragraph (a) of this SECTION 12, and
the Lessee agrees that it shall cooperate in connection therewith). The
proceeds of sale received by the Lessor from any sale of such Property shall be
retained by the Lessor; provided that if the proceeds of such sale, together
with the Residual Guaranty Payment paid by the Lessee, exceed the sum of (x)
the Acquisition Cost of such Property, (y) all other amounts payable by the
Lessee hereunder or by the Lessor under the Financing Agreement, and (z) the
equity return on such Acquisition Cost that the Lessor would have earned had
this Lease remained in effect through the date of such sale, such excess shall,
no later than one hundred eighty (180) days following receipt thereof, be paid
by the Lessor to the Lessee. The Lessee shall use reasonable efforts during
the last six (6) months of the Lease Term with respect to such Property (unless
this Lease has been extended pursuant to SECTION 13 hereof), and during the
last six (6) months of the Extended Term, if any, to seek on behalf of the
Lessor bona fide arms-length bids for not less than all such Property from
prospective purchasers who are financially capable of purchasing such Property
for cash, on an as-is, non-installment sale basis, without warranty by, or
recourse to, the Lessor. The Lessee shall notify the Lessor of the amount of
each such bid, and the name and address of the Person submitting such bid.
(d) In the event the Lessee shall surrender such Property
to the Lessor or to a purchaser of such Property from the Lessor pursuant to
the provisions of this SECTION 12, on the Lease Termination Date applicable to
such Property, the Lessee shall pay to the Lessor, in addition to the Residual
Guaranty Payment, all Basic Rent payable with respect to such Property and any
Additional Rent and other amounts owing hereunder. Upon payment by the Lessee
to the Lessor of all amounts owing under this SECTION 12 and delivery of all
Property under this Lease to the Lessor or such purchaser, this Lease shall
terminate with respect to such Property, except to the extent provided in
SECTION 11 hereof.
SECTION 13 Lessee's Rights of Purchase; Lease Extension.
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(a) The Lessee shall have the right (i) upon at least
twelve (12) months' written notice to the Lessor, to purchase the Lessor's
interest in all Property on the Lease Termination Date, (ii) in the case of any
purchase during the Lease Term other than during the twelve (12) month period
prior to and ending on the Lease Termination Date, upon at least thirty (30)
days written notice to the Lessor, to purchase the Lessor's interest in all
Property then subject to this Lease on any Basic Rent Payment Date during the
Lease Term or (iii) upon at least thirty (30) days' written notice to the
Lessor, to purchase any Unit of Property which has, in the good faith judgment
of the Lessee, become uneconomic, impractical or unsuitable for continued use
and occupancy as an office building, for such other commercial purposes as such
Other Commercial Improvements have been constructed, or as a retail fuel
outlet/convenience store/car wash and related uses such as a quick service
restaurant ("UNECONOMIC CONDITION"), on any Basic Rent Payment Date during the
Lease Term. The purchase price payable by the Lessee shall be the Termination
Payment, in the case of a purchase pursuant to clauses (i) or (ii) above or the
Acquisition Cost of the relevant Unit in the case of a purchase pursuant to
clause (iii) above. In connection with any purchase under this paragraph (a),
on the date upon which such purchase occurs, the Lessee shall pay to the Lessor
the purchase price, all Basic Rent payable and any Additional Rent and other
amounts owing hereunder.
(b) Notwithstanding anything to the contrary in the
foregoing, so long as no Event of Default has occurred and is continuing, the
Lessee may, in its notice to the Lessor of its intent to exercise its purchase
option pursuant to SECTION 13(A)(I) hereof, specify that the Lessor obtain
financings (including both debt and equity financing) on terms acceptable to it
and the Lessee in order to finance the Lessor's ownership of the Property
during the Extended Term. After its receipt of such request, the Lessor shall
make reasonable efforts to arrange for such financing commitments. The terms
of such financing commitment shall be subject to the written approval of the
Lessee.
(c) The Lessor will advise the Lessee in writing not
later than three (3) months prior to the Lease Termination Date as to whether
it has been able to obtain financing commitments on terms and conditions
acceptable to it to finance the Property for the period of the Extended Term.
In such notice, the Lessor shall identify such terms and conditions. The
Lessee shall have the right, within thirty (30) days of its receipt of the
foregoing notice of the Lessor, to specify in writing (i) whether the terms and
conditions of such financing are acceptable to it and (ii) whether the Lessee
agrees to lease the Property for the Extended Term. The notice of the Lessee
contemplated by the preceding sentence shall be irrevocable.
(d) In the event that (i) the Lessor shall not obtain
financing commitments to finance the Property on terms and conditions
acceptable to it and the Lessee or (ii) the Lessee shall not give the notice
set forth in paragraph (c) above within the 30 day period specified therein,
then this Lease shall not be extended and the Lessee shall purchase the
Property by paying the Termination Payment and all other amounts payable
pursuant to SECTION 13(A) hereof.
(e) If the Lessee states in its notice delivered pursuant
to paragraph (c) above that the terms and conditions of the proposed financing
are acceptable to it, the Lessor shall schedule the closing of the financing
contemplated by the financing commitments on or before the date which is one
(1) month prior to the Lease Termination Date. The Lessor shall notify the
Lessee in writing promptly of the closing of such financing or that such
financing shall have failed to close on such scheduled date. Upon the date of
such closing the Property shall, subject to the terms and conditions of this
Lease, be leased hereunder for the Extended Term. If the closing shall not
occur on or before the date which is one (1) month prior to the last day of the
Lease Term, then the lease of the Property shall terminate on the Lease
Termination Date and the Lessee shall on such date purchase all Property from
the Lessor by paying the Termination Payment and all other amounts payable
pursuant to SECTION 13(A) hereof.
SECTION 14 Lessor's Right to Terminate.
If with respect to a Remediation Property the Lessee shall
fail to complete all Clean-Up within twenty- four (24) months from the date
such Unit of Property was acquired, then the Lessor shall have the right (after
AMENDED AND RESTATED LEASE AGREEMENT - Page 22
24
considering, based on the Lessor's good faith judgment and in consultation with
any Assignee, any request from the Lessee for an extension of the period set
forth above; provided, however, that any such consideration or consultation
shall not, and shall not be deemed to, extend such period in any way) upon at
least three (3) days notice to the Lessee to terminate the lease of such
Remediation Property as of the immediately succeeding Basic Rent Payment Date.
On such Basic Rent Payment Date, the Lessee shall be obligated to purchase the
Lessor's interest in such Remediation Property and Property related thereto and
to pay to the Lessor, as the purchase price for such interest, the sum of the
Acquisition Cost of such Remediation Property. The Lessor shall on such Basic
Rent Payment Date transfer to the Lessee title to the Lessor's interest in such
Remediation Property and all rights of the Lessor against the lessor under the
Ground Lease relating to such Remediation Property and the Lessor shall have no
further obligations under this Lease with respect to such Remediation Property.
In connection with any purchase under this SECTION 14, on such stipulated Basic
Rent Payment Date, the Lessee shall pay to the Lessor, in addition to any
purchase price payable, all Basic Rent payable, and any Additional Rent and
other amounts owing hereunder.
SECTION 15 Loss of or Damage to Property.
(a) The Lessee hereby assumes all risk of loss of or
damage to Property, however caused. No loss of or damage to any Property shall
impair any obligation of the Lessee under this Lease, which shall continue in
full force and effect with respect to any lost or damaged Property.
(b) Subject to the right of the Lessee to effect
substitution of a Unit of Property pursuant to SECTION 32 hereof, in the event
of damage of any kind whatsoever to any Property (unless the same is determined
by the Lessee to be damaged beyond repair) the Lessee, at its own cost and
expense, shall place the same in good operating order, repair, condition and
appearance. The Lessee's right to any proceeds paid under any insurance policy
or policies required under SECTION 10 of this Lease with respect to any such
damage to any Property which has been so placed by the Lessee in good operating
order, repair, condition and appearance shall be governed by paragraph (g) of
SECTION 10 hereof.
(c) If (i) any Unit of Property is lost, stolen,
destroyed, seized, confiscated, rendered unfit for use or damaged beyond repair
(in the reasonable judgment of the Lessee), or (ii) the use thereof by the
Lessee in the ordinary course of business is prevented by the act of any third
Person or Persons or governmental instrumentality for a period exceeding
forty-five (45) days, or (iii) such Unit of Property is attached (other than on
a claim against the Lessor as to which the Lessee is not obligated to indemnify
the Lessor) and the attachment is not removed within forty- five (45) days, or
(iv) a Taking as described in SECTION 16 hereof shall occur, or (v) any Unit of
Property is damaged and the Lessee elects not to rebuild or repair such Unit or
such rebuilding or repairs could not be expected to restore such Unit to its
previous working order prior to the expiration of the Lease Term or such
rebuilding or repairs would exceed forty percent (40%) of the Acquisition Cost
of such Unit, then (subject to the right of the Lessee to effect substitution
of a Unit of Property pursuant to SECTION 32 hereof), in any such event, (A)
the Lessee shall promptly notify the Lessor in writing of such event, (B) on
the first Basic Rent Payment Date following such event the Lessee shall pay to
the Lessor an amount equal to the Acquisition Cost of such Unit, (C) the Lease
Term or Extended Term of such Unit shall continue until the Basic Rent Payment
Date on which the Lessor receives payment from the Lessee of the amount payable
pursuant to clause (B) of this paragraph (c) and of Basic Rent payable to and
including the date of purchase, and any Additional Rent and other amounts owing
hereunder in respect of such Unit, and shall thereupon terminate and (D) the
Lessor shall on such Basic Rent Payment Date transfer title to such Unit to the
Lessee, and the Lessee shall be subrogated to the Lessor's rights in the
affected transaction. So long as no Event of Default relating to nonpayment of
money or insolvency has occurred and is continuing hereunder, the right to
insurance and condemnation proceeds, if any, received by the Lessor shall be
assigned by the Lessor to the Lessee upon the payment by the Lessee of all
amounts referred to in the preceding sentence.
SECTION 16 Condemnation and Dedication of Property;
Easements.
AMENDED AND RESTATED LEASE AGREEMENT - Page 23
25
(a) If the use, occupancy or title to all or a
substantial portion of a Unit of Property is taken, requisitioned or sold in,
by or on account of actual or threatened eminent domain proceedings or other
action by any person or authority having the power of eminent domain (such
events collectively referred to as a "TAKING"), then (subject to the right of
the Lessee to effect substitution of a Unit of Property pursuant to SECTION 32
hereof) the Lease Term or Extended Term shall terminate as provided in
paragraph (c) of SECTION 15 hereof. Upon receipt of proceeds from any award or
sale made in connection with such Taking, if the Lessee has paid all amounts
owing under paragraph (c) of SECTION 15 hereof, so long as no Event of Default
or Potential Default has occurred and is continuing, the Lessor shall remit to
the Lessee the net amount of such proceeds remaining after reimbursement for
all costs and expenses (including, without limitation, reasonable attorneys'
fees) incurred by the Lessor in connection with the negotiation and settlement
of any proceedings related to such Taking. A Taking shall be deemed to affect
a "substantial portion" of a Unit if, after such Taking, such Unit of Property
is unusable for the Lessee's ordinary business purposes.
(b) If less than a substantial portion of a Unit of
Property is subject to a Taking, then this Lease shall continue in effect as to
the portion of the Unit not taken and any proceeds, so long as no Event of
Default or Potential Default has occurred and is continuing, shall be paid to
the Lessee; provided that if the amount of such proceeds exceeds $10,000, such
proceeds shall be paid to the Lessor, the Acquisition Cost of such Unit shall
be reduced accordingly and, to the extent required by the Financing Agreement,
the Lessor shall make a corresponding prepayment of the amounts owed under the
Financing Agreement. A revised Unit Leasing Record shall be prepared by the
Lessor to properly reflect the correct legal description and any reduction in
the Acquisition Cost of such Unit following such Taking.
(c) So long as no Event of Default hereunder has occurred
and is continuing, the Lessee shall have the right (i) to grant easements for
the benefit of any Unit of Property, (ii) to voluntarily dedicate or convey, as
required, portions of any Unit of Property for road, highway and other public
purposes and (iii) to voluntarily execute petitions to have any Unit of
Property or a portion thereof annexed to any municipality or included within
any utility, highway or other improvement or service district; provided that no
more than minor restoration is required. If any monetary consideration is paid
for such easement or dedication, the Lessee shall be entitled to receive or
retain such consideration.
The Lessee shall exercise the above power to grant without the
joinder of the Lessor, except that the Lessor will cooperate, without
unreasonable delay and at the Lessee's expense, as necessary and join in the
execution of any appropriate instrument or shall execute any separate
instrument as necessary. As a condition precedent to the Lessee's exercise of
any of the Lessee's powers under this SECTION 16, (i) the Lessee shall give the
Lessor five (5) Business Days' prior written notice of the proposed action and
(ii) the Lessee shall provide to the Lessor a certificate of the Lessee stating
that such action will not adversely affect either the fair market value of such
Unit or the use of such Unit for its intended purpose, will not affect the
Lessor's ability to exercise its rights and remedies under this Lease and that
the Lessee undertakes to remain obligated under this Lease to the same extent
as if the Lessee had not exercised its powers under this SECTION 16 and the
Lessee will perform all obligations under such instrument and shall prepare all
required documents and provide all other instruments and certificates as the
Lessor may reasonably request.
SECTION 17 Surrender of Property.
Subject to the provisions of SECTIONS 12, 13, 14, 15, 19, 20,
29 and 32 hereof, upon termination of the lease of any Unit of Property
hereunder, the Lessee shall surrender such Unit to the Lessor by delivering all
portions of such Unit that do not constitute real property to the Lessor packed
and crated at such location as the Lessor may direct. Such Property shall be
surrendered in the condition required by paragraph (b) of SECTION 9 of this
Lease. Any cost of removal and delivery of such Property to the Lessor shall
be paid by the Lessee.
SECTION 18 Events of Default.
AMENDED AND RESTATED LEASE AGREEMENT - Page 24
26
Any of the following events of default shall constitute an
"EVENT OF DEFAULT" and shall give rise to the rights on the part of the Lessor
described in SECTION 19 hereof:
(a) (i) Failure of the Lessee to pay Basic Rent or other
amounts payable pursuant to SECTION 7(A) hereof for more than ten (10) days
after such payment is due pursuant to SECTION 7 hereof; (ii) failure of the
Lessee to comply with SECTION 14 hereof, (iii) failure of the Lessee to pay
amounts due to the Lessor at the time of any scheduled sale of any Unit of
Property hereunder, or (iv) failure of the Lessee to pay any other amount
payable by the Lessee hereunder for more than ten (10) days after receipt of
written demand requesting that such payment is past due; or
(b) Failure to maintain the insurance required by SECTION
10 hereof, or default in the performance of any covenant contained in SECTION
8(E); or
(c) Default in the performance or observance of any other
obligation or covenant of the Lessee pursuant to this Lease or any Consent and
the continuance of such default for thirty (30) days after written notice to
the Lessee by the Lessor or any Assignee; provided that if such default is
curable, then such default shall not constitute an Event of Default hereunder
for such longer period, not to exceed one hundred fifty (150) days, during
which the Lessee is diligently pursuing the cure of such default
(d) The entry of a decree or order for relief in respect
of the Lessee by a court having jurisdiction in the premises or the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Lessee or of any substantial part of the Lessee's
property, or ordering the winding up or liquidation of the Lessee's affairs, in
an involuntary case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or state bankruptcy, insolvency or
other similar law; or the commencement against the Lessee of an involuntary
case under the Federal bankruptcy laws, as now or hereafter constituted, or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
and the continuance of any such case unstayed and in effect for a period of
ninety (90) consecutive days; or
(e) The suspension or discontinuance of the Lessee's
business operations, the Lessee's insolvency (however evidenced) or the
Lessee's admission of insolvency or bankruptcy, or the commencement by the
Lessee of a voluntary case under the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or state bankruptcy,
insolvency or other similar law, or the consent by the Lessee to the
appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the Lessee or
of any substantial part of the Lessee's property, or the making by the Lessee
of an assignment for the benefit of creditors, or the failure of the Lessee
generally to pay its debts as such debts become due, or the taking of corporate
action by the Lessee in furtherance of any such action; or
(f) Any representation, warranty, or certification made
by the Lessee in this Lease, any Consent or any document or certificate
contemplated hereby or thereby proves to be false or inaccurate in any material
respect on or as of the date made or deemed made; or
(g) An Event of Default (as defined in the Guaranty or
the Residual Guaranty Payment Support) shall occur under the Guaranty or the
Residual Guaranty Payment Support; or
(h) The Guaranty or the Residual Guaranty Payment Support
ceases to be in full force and effect; or
(i) An Event of Default (as defined in the Acquisition
and Construction Agreement) shall occur under the Acquisition and Construction
Agreement; or
AMENDED AND RESTATED LEASE AGREEMENT - Page 25
27
(j) Failure of the Lessee to comply with the Return
Provisions set forth in SECTION 12(B) hereof, upon the Lessee's election not to
purchase all Property in accordance with SECTION 12(B) hereof, or to extend the
Lease Term of the Property in accordance with SECTION 13 hereof.
Notwithstanding anything to the contrary contained herein, if
the sole basis for the occurrence of an Event of Default is the occurrence of a
Material Adverse Effect unrelated to any misrepresentation or failure to
perform a covenant herein or in any other agreement, then the Termination
Payment payable by the Lessee pursuant to SECTION 19 hereof shall be the
Residual Guaranty Payment.
SECTION 19 Rights upon Default.
Upon the occurrence and continuation of any Event of Default
the Lessor may do any one or more of the following:
(a) Terminate the lease of all Property leased hereunder
and require payment of an amount equal to the aggregate outstanding principal
amount of all notes outstanding under the Financing Agreement plus accrued
interest and fees plus the stated amount of the equity investment made by the
Lessor in all such Property, plus any accrued and unpaid return which would be
payable, if the Lease had been in effect through the date of sale, to any
general or limited partner of Lessor if Lessor had sufficient funds therefor,
plus all other amounts owing under the Financing Agreement and Trust Agreement
plus any unpaid fees or expenses of the Lessor and out-of-pocket costs
including taxes (other than any such taxes generally excluded from the Lessee's
indemnification obligations pursuant to SECTION 11(C) hereof), legal and other
expenses of the Lessor associated directly or indirectly with the purchase of
the Property or terminations of this Lease in each case for which the Lessee is
liable under this Lease or the Acquisition and Construction Agreement (the
"TERMINATION PAYMENT"). The Termination Payment will be allocated between the
Lessees pro rata according to the Acquisition Cost of the Units leased by each
Lessee under this Agreement;
(b) Whether or not the lease of any Property is
terminated, take immediate possession of and remove any or all Property and
other equipment or property of the Lessor in the possession of the Lessee,
wherever situated, and for such purpose, enter upon any premises without
liability to the Lessee for so doing;
(c) Whether or not any action has been taken under
paragraph (a) or (b) above, sell any Property (with or without the concurrence
or request of the Lessee);
(d) Hold, use, occupy, operate, remove, lease, sublease
or keep idle any or all Property as the Lessor in its sole discretion may
determine, without any duty to account to the Lessee with respect to any such
action or inaction or for any proceeds thereof; and
(e) Exercise any other right or remedy which may be
available under applicable law and in general proceed by appropriate judicial
proceedings, either at law or in equity, to enforce the terms hereof or to
recover damages for the breach hereof.
Notwithstanding anything to the contrary contained herein, if
the sole basis for the occurrence of an Event of Default is the occurrence of a
Material Adverse Effect unrelated to any misrepresentation or failure to
perform a covenant herein or in any other agreement, then the amount payable by
the Lessee pursuant to this SECTION 19 shall be the Residual Guaranty Payment
for all Units plus all accrued and unpaid Basic Rent and the amounts referred
to in the sixth to last paragraph of this SECTION 19; provided, further, that
the failure to pay such Residual Guaranty Payment shall be an immediate Event
of Default hereunder and the Lessee shall be required to pay the full
Termination Payment upon such failure;
AMENDED AND RESTATED LEASE AGREEMENT - Page 26
28
Suit or suits for the recovery of any default in the payment
of any sum due hereunder or for damages may be brought by the Lessor from time
to time at the Lessor's election, and nothing herein contained shall be deemed
to require the Lessor to await the date whereon this Lease or the term hereof
would have expired by limitation had there been no such default by the Lessee
or no such termination or cancellation.
The receipt of any payments under this Lease by the Lessor
with knowledge of any breach of this Lease by the Lessee or of any default by
the Lessee in the performance of any of the terms, covenants or conditions of
this Lease, shall not be deemed to be a waiver of any provision of this Lease.
No receipt of moneys by the Lessor from the Lessee after the
termination or cancellation hereof in any lawful manner shall reinstate,
continue or extend the Lease Term or any Extended Term, or affect any notice
theretofore given to the Lessee, or operate as a waiver of the right of the
Lessor to enforce the payment of Basic Rent or Additional Rent or other charges
payable hereunder, or operate as a waiver of the right of the Lessor to recover
possession of any Unit of Property by proper suit, action, proceedings or
remedy, it being agreed that, after the service of notice to terminate or
cancel this Lease, and the expiration of the time therein specified, if the
default has not been cured in the meantime, or after the commencement of suit,
action or summary proceedings or of any other remedy, or after a final order,
warrant or judgment for the possession of any Unit of Property, the Lessor may
demand, receive and collect any moneys payable hereunder, without in any manner
affecting such notice, proceedings, suit, action, order, warrant or judgment;
and any and all such moneys so collected shall be deemed to be payments on
account for the use and operation of any Unit of Property, or at the election
of the Lessor, on account of the Lessee's liability hereunder. Acceptance of
the keys to any Unit of Property, or any similar act, by the Lessor, or any
agent or employee of the Lessor, during the term hereof, shall not be deemed to
be an acceptance of a surrender of any Unit of Property unless the Lessor shall
consent thereto in writing.
After any Event of Default, the Lessee shall be liable for,
and the Lessor may recover from the Lessee, (i) all Basic Rent accrued to the
date of payment, (ii) any Additional Rent owing with respect to all Property
leased by the Lessee, (iii) all amounts payable pursuant to SECTIONS 11, 24 and
26 hereof and (iv) all losses, damages, costs and expenses (including, without
limitation, attorneys' fees and expenses, commissions, filing fees and sales or
transfer taxes) sustained by the Lessor by reason of such Event of Default and
the exercise of the Lessor's remedies with respect thereto, including, in the
event of a sale by the Lessor of any Property pursuant to this SECTION 19, all
costs and expenses associated with such sale. The amounts payable in clauses
(i) through (iv) above are hereinafter sometimes referred to as the "ACCRUED
DEFAULT OBLIGATIONS".
After an Event of Default, the Lessor may sell its interest in
any Property upon any terms that the Lessor deems satisfactory, free of any
rights of the Lessee or any Person claiming through or under the Lessee. In
the event of any such sale, in addition to the Accrued Default Obligations, the
Lessor shall be entitled to recover from the Lessee, as liquidated damages, and
not as a penalty, an amount equal to the Acquisition Cost of any Property so
sold, minus the proceeds of such sale received by the Lessor. Proceeds of sale
received by the Lessor in excess of the Acquisition Cost of such Property sold
shall be credited against the Accrued Default Obligations the Lessee is
required to pay under this SECTION 19. If such proceeds exceed the Accrued
Default Obligations, or,the Lessee is required to pay under this SECTION 19.
If such proceeds exceed the Accrued Default Obligations, or, if the Lessee has
paid all amounts required to be paid under this SECTION 19, such excess shall
be paid by the Lessor to the Lessee. As an alternative to any such sale, or if
the Lessee converts any Property after an Event of Default, or if such Property
is lost or destroyed, in addition to the Accrued Default Obligations, the
Lessor may cause the Lessee to pay to the Lessor, and the Lessee shall pay to
the Lessor, as liquidated damages and not as a penalty, an amount equal to the
Acquisition Cost of such Property. In the event the Lessor receives payment
pursuant to the previous sentence of this paragraph, the Lessor shall transfer
all of the Lessor's right, title and interest in and to the Property to the
Lessee.
In the event of a sale pursuant to this SECTION 19, upon
receipt by the Lessor of the amounts payable hereunder, the Lessor shall
transfer all of the Lessor's right, title and interest in and to the Property
to the Lessee or purchaser other than the Lessee, as the case may be.
AMENDED AND RESTATED LEASE AGREEMENT - Page 27
29
No remedy referred to in this SECTION 19 is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy
referred to above or otherwise available to the Lessor at law or in equity, and
the exercise in whole or in part by the Lessor of any one or more of such
remedies shall not preclude the simultaneous or later exercise by the Lessor of
any or all such other remedies. No waiver by the Lessor of any Event of
Default hereunder shall in any way be, or be construed to be, a waiver of any
future or subsequent Event of Default.
With respect to the termination of this Lease as to any Unit
of Property as a result of an Event of Default, the Lessee hereby waives
service of any notice of intention to re-enter. The Lessee hereby waives any
and all rights to recover or regain possession of any Unit of Property or to
reinstate this Lease as permitted or provided by or under any statute, law or
decision now or hereafter in force and effect.
Notwithstanding anything to the contrary set forth in this
SECTION 19, upon the payment in full by the Lessee of the Termination Payment
and all Accrued Default Obligations, title to all Property and the Lessor's
rights under any Ground Leases shall automatically be deemed to vest in the
Lessee and the Lessor shall, following the receipt of all such amounts,
execute, at the Lessee's cost and expense, such bills of sale and other title
documents, on an as- is, where-is, basis, as are reasonably requested by the
Lessee.
SECTION 20 Sale or Assignment by Lessor.
(a) The Lessor may assign any of its right, title or
interest in the Property, this Lease or the Acquisition and Construction
Agreement or in any or all amounts due from the Lessee or any third party under
this Lease; provided that unless an Event of Default shall have occurred and be
continuing, the Lessor has obtained the prior written consent of the Lessee to
such sale or assignment.
(b) Any assignee shall, except as otherwise agreed by the
Lessor and such assignee, have all the rights, powers, privileges and remedies
of the Lessor hereunder, and the Lessee's obligations as between itself and
such assignee hereunder shall not be subject to any claims or defense that the
Lessee may have against the Lessor. Upon receipt of written notice from the
Lessor of any such assignment, the Lessee shall thereafter make payments of
Basic Rent, Additional Rent and other sums due hereunder to the assignee, to
the extent specified in such notice, and such payments shall discharge the
obligation of the Lessee to the Lessor hereunder to the extent of such
payments. Anything contained herein to the contrary notwithstanding, no
assignee shall be obligated to perform any duty, covenant or condition required
to be performed by the Lessor hereunder, and any such duty, covenant or
condition shall be and remain the sole obligation of the Lessor.
SECTION 21 Income Taxes.
The Lessor agrees that it will not file any Federal, state or
local income tax returns during the Lease Term or Extended Term, if any, with
respect to any Property that are inconsistent with the treatment of the Lessee
as the sole owner of such Property for Federal, state and local income tax
purposes.
SECTION 22 Notices and Requests.
All notices, offers, acceptances, approvals, waivers,
requests, demands and other communications hereunder or under any other
instrument, certificate or other document delivered in connection with the
transactions described herein shall be in writing, shall be addressed as
provided below and shall be considered as properly given (a) if delivered in
person, (b) if sent by express courier service (including, without limitation,
Federal Express, Emery, DHL, Airborne Express, UPS and other similar express
delivery services), (c) in the event overnight delivery services are not
readily available, if mailed by postage prepaid, registered or certified with
return receipt requested, or (d) if sent by telecopy and confirmed; provided
that in the case of a notice by telecopy, the sender shall in addition confirm
such notice by writing sent in the manner specified in clauses (a), (b) or (c)
of this SECTION 22. All notices shall be effective upon receipt by the
addressee; provided, however, that if any notice is tendered to an addressee
and
AMENDED AND RESTATED LEASE AGREEMENT - Page 28
30
the delivery thereof is refused by such addressee, such notice shall be
effective upon such tender. For the purposes of notice, the addresses of the
parties shall be as set forth below; provided, however, that any party shall
have the right to change its address for notice hereunder to any other location
by giving written notice to the other parties in the manner set forth herein.
The initial addresses of the parties hereto are as follows:
If to the Lessor:
Jamestown Funding, Limited Partnership
c/o ML Leasing Equipment Corp.
Project and Structured Finance Group
North Tower - 27th Floor, World Financial Center
250 Vesey Street
New York, New York 10281-1327
Attention: Jean M. Tomaselli
Telephone: (212) 449-7925
Telecopy: (212) 449-2854
If to the Lessee:
Ultramar Inc.
525 West Third Street
Hanford, California 93230
Attention: General Counsel
Telephone: (209) 582-0241
Telecopy: (209) 583-3282
and
Ultramar Inc.
111 West Ocean Avenue
Suite 1400
Long Beach, California 90802
Attention: General Counsel
Telephone: (310) 437-6795
Telecopy: (310) 495-5325
or
Ultramar Energy Inc.
2 Pickwick Plaza
Third Floor
Greenwich, CT 06830
Attention: General Counsel
Telephone: (203) 622-7015
Telecopy: (203) 622-7007
or
Diamond Shamrock Leasing, Inc.
Diamond Shamrock Arizona, Inc.
Diamond Shamrock Refining and Marketing Company
AMENDED AND RESTATED LEASE AGREEMENT - Page 29
31
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer
Telephone: (210) 641-8484
Telecopy: (210) 641-6800
With a copy of all notices under this SECTION 22 to be
simultaneously given, delivered, or served to Guarantor at the following
address:
Ultramar Diamond Shamrock Corporation
9830 Colonnade Boulevard
San Antonio, Texas 78230
Attention: Treasurer
Telephone: (210) 641-8484
Telecopy: (210) 641-6800
With a copy of all notices under this SECTION 22 to any Assignee at such
address as such Assignee may specify by written notice to the Lessor and the
Lessee.
SECTION 23 Covenant of Quiet Enjoyment.
During the Lease Term or Extended Term, if any, of any
Property hereunder and so long as no Event of Default shall have occurred and
be continuing, the Lessor shall not interfere with the Lessee's right to quiet
enjoyment of the Property on the terms and conditions provided in this Lease.
The covenant of the Lessor in this SECTION 23 shall extend to any Person
claiming through or under the Lessor.
SECTION 24 Right to Perform for Lessee.
(a) If the Lessee fails to timely perform or comply with
any of its covenants or agreements contained in this Lease, the Lessor may,
upon notice to the Lessee but without waiving or releasing any obligations or
default, itself perform or comply with such covenant or agreement, and the
amount of the reasonable expenses of the Lessor incurred in connection with
such performance or compliance, shall be payable by the Lessee not later than
ten (10) days after written notice by the Lessor.
(b) Without in any way limiting the obligations of the
Lessee hereunder, the Lessee hereby irrevocably appoints the Lessor as its
agent and attorney at the time at which the Lessee is obligated to deliver
possession of any Unit of Property to the Lessor, to demand and take possession
of such Unit of Property in the name and on behalf of the Lessee from
whomsoever shall be at the time in possession thereof.
SECTION 25 Merger, Consolidation or Sale of Assets.
The Lessee may not consolidate with or merge into any other
corporation or sell all or substantially all of its assets to any Person unless
the surviving corporation or transferee Person is a wholly-owned subsidiary of
the Guarantor and assumes, by execution and delivery of instruments reasonably
satisfactory to the Lessor, the obligations of the Lessee hereunder and becomes
successor to the Lessee, but the Lessee shall not thereby be released, without
the consent of the Lessor, from its obligations under this Lease and provided
the Guaranty and the Residual Guaranty Payment Support shall be applicable to
the obligations under this Lease with respect to the Person assuming the
Lessee's obligations under this Lease. The terms and provisions of this Lease
shall be binding upon and inure to the benefit of the Lessee and its respective
successors and assigns.
SECTION 26 Expenses.
AMENDED AND RESTATED LEASE AGREEMENT - Page 30
32
Whether or not the transactions contemplated by this Lease are
consummated, the Lessee shall pay all of the expenses, upon the receipt by the
Lessee of invoices evidencing such expenses which shall be reasonably
satisfactory to the Lessee, of the Lessor and any Assignee incurred before, on
or after the date of this Lease in connection with the preparation, execution
and delivery of this Lease, and any documents executed in connection therewith,
or any amendment or supplement thereto or any waivers or enforcement thereof,
including, without limitation:
(a) all reasonable out-of-pocket costs and expenses
incurred by the Lessor and Assignee in connection with this Lease for services
rendered to the Lessor and Assignee in connection with this Lease (provided
that unless an Event of Default shall have occurred and be continuing, any such
service providers were hired with the prior written consent of the Lessee or
the Guarantor, not to be unreasonably withheld);
(b) the reasonable fees, expenses and disbursements of
the Lessor, any Assignee, the Trustee or any beneficiary of the Trustee
(including, without limitation, the reasonable fees and disbursements of
counsel to the Lessor, to any Assignee or to the Trustee; provided that unless
an Event of Default shall have occurred and be continuing any such counsel were
hired with the prior written consent of the Lessee or the Guarantor, not to be
unreasonably withheld) in connection with this Lease; and
(c) all reasonable fees and out-of-pocket expenses in
connection with any appraisal, survey or inspection of any Property, (provided
that, unless an Event of Default shall have occurred and be continuing, any
such service providers were hired with the prior written consent of the Lessee
or the Guarantor, not to be unreasonably withheld) or any printing and other
document reproduction and distribution expenses, stamp or other similar taxes,
fees or excises, including, without limitation, interest and penalties, and all
filing fees and taxes in connection with the recording or filing of instruments
and financing statements in connection with the transactions described in this
Lease.
If the transaction contemplated hereby is not consummated as a
result of a breach by any Assignee of its obligations under the Financing
Agreement, or as a result of acts of gross negligence or willful misconduct by
the Lessor or the Assignee, or a failure by any Assignee to consummate the
transactions contemplated hereby or by the Financing Agreement after the
satisfaction of the conditions precedent to such consummation, then the Lessee
shall not be obligated to pay the expenses of such party.
SECTION 27 Permitted Contests.
(a) The Lessee shall not be required, nor shall the
Lessor have the right, to pay, discharge or remove any tax, assessment, levy,
fee, rent, charge or Lien or to comply or cause any Unit of Property to comply,
with any Legal Requirements applicable to any Unit of Property or the
occupancy, use or operation thereof, so long as no Event of Default exists
under this Lease with respect to any Unit of Property, and, in the opinion of
the Lessee's counsel, the Lessee shall have reasonable grounds to contest the
existence, amount, applicability or validity thereof by appropriate
proceedings, which proceedings in the reasonable judgment of the Lessor, (i)
shall not involve any material danger that any Unit of Property or any Basic
Rent or any Additional Rent would be subject to sale, forfeiture or loss, as a
result of failure to comply therewith, (ii) shall not affect the payment of any
Basic Rent or any Additional Rent or other sums due and payable hereunder or
result in any such sums being payable to any Person other than the Lessor or
any Assignee, (iii) will not place the Lessor or the Assignee in any danger of
civil liability for which the Lessor is not adequately indemnified (the
Lessee's obligations under SECTION 11 of this Lease shall be deemed to be
adequate indemnification if no Event of Default or Potential Default exists and
if the aggregate amounts of such civil liability for which such Person is not
indemnified by a bond or otherwise does not exceed $300,000) or subject the
Lessor or any Assignee to any criminal liability, (iv) if involving taxes,
shall suspend the collection of taxes, and (v) shall be permitted under and be
conducted in accordance with the provisions of any other instrument to which
the Lessee or the Unit of Property is subject and shall not constitute a
default thereunder (a "PERMITTED CONTEST"). The Lessee shall conduct all
Permitted Contests in good faith and with due diligence and shall promptly
after the final
AMENDED AND RESTATED LEASE AGREEMENT - Page 31
33
determination (including appeals) of any Permitted Contest pay and discharge
all amounts which shall be determined to be payable therein. The Lessor shall
cooperate in good faith with the Lessee with respect to all Permitted Contests
conducted by the Lessee pursuant to this SECTION 27.
(b) In the event that the Lessor becomes aware that a
taxing authority or subdivision thereof proposes an additional assessment or
levy of any tax for which the Lessee is obligated to reimburse the Lessor under
this Lease, or in the event that the Lessor is notified of the commencement of
an audit or similar proceeding which could result in such an additional
assessment, then the Lessor shall in a timely manner notify the Lessee in
writing of such proposed levy or proceeding. The Lessee shall notify the Lessor
in writing of any proceeding in which the amount in contest exceeds $300,000.
SECTION 28 Leasehold Interests Relating to Properties
subject to a Ground Lease.
In connection with any Ground Lease, the Lessor shall make a
prepayment to the owner thereof of all rents payable thereunder, which rents
shall be in amount equal to the fair market value of the land and all
underground equipment on an as-is basis on such date. Rents so prepaid shall
be added to the Acquisition Cost of the Unit covered by such Ground Lease. In
addition, the following provisions shall apply to each Ground Lease, whether or
not such Ground Lease relates to a Remediation Property:
(a) The Lessee hereby covenants and agrees to perform and
to observe all of the terms, covenants, provisions, conditions and agreements
of the underlying Ground Leases on the Lessor's part as lessee thereunder to be
performed and observed (including, without limitation, payment to the landlord
of all rent, additional rent and other amounts required to be paid by the
Lessor as lessee under any Ground Lease, other than rent prepaid by the Lessor)
to the end that all things shall be done which are necessary to keep unimpaired
the rights of the Lessor as lessee under any Ground Lease. The Lessee further
covenants that it shall cause to be exercised any renewal option contained in
the Ground Lease which relates to renewal occurring in whole or in part during
the term of this Lease. The Lessor and the Lessee mutually agree to cooperate
fully with each other to enforce the Lessor's rights as the lessee under any
Ground Lease as against the lessor under such Ground Lease.
(b) The Lessee covenants and agrees pursuant to SECTION
11 hereof to indemnify and hold harmless the Lessor and any Assignee from and
against any and all liability, loss, damage, suits, penalties, claims and
demands of every kind and nature (including, without limitation, reasonable
attorneys' fees and expenses; provided that unless an Event of Default shall
have occurred and be continuing, such attorneys were hired with the prior
written consent of the Lessee, not to be unreasonably withheld) by reason of
the Lessee's failure to comply with any Ground Lease or the provisions of this
SECTION 28.
(c) The Lessor and the Lessee agree that the Lessor shall
have no obligation or responsibility to provide services or equipment required
to be provided or repairs or restorations required to be made in accordance
with the provisions of any Ground Lease by the lessor thereunder. The Lessor
shall in no event be liable to the Lessee nor shall the obligations of the
Lessee hereunder be impaired or the performance thereof excused because of any
failure or delay on the part of the lessor under any Ground Lease in providing
such services or equipment or making such restorations or repairs and such
failure or delay shall not constitute a basis for any claim against the Lessor
or any offset against any amount payable to the Lessor under this Lease.
(d) If the Lessor's interest under any Ground Lease shall
expire, terminate or otherwise be extinguished, the Lease of the Unit of
Property to which such Ground Lease relates shall thereupon terminate as
provided in this paragraph (d). Upon such expiration, termination or
extinguishment, the Lessee shall be required to purchase the Lessor's interest
in such Unit of Property at its Acquisition Cost. If the Lessee shall be
required to purchase the Lessor's interest in such affected Unit, then (i) on
the Basic Rent Payment Date next succeeding such event, the Lessee shall pay to
the Lessor an amount equal to the Acquisition Cost of such Unit of Property,
(ii) the Lease Term or Extended Term of such Property shall continue until the
date on which the Lessor receives payment
AMENDED AND RESTATED LEASE AGREEMENT - Page 32
34
from the Lessee of the amount payable pursuant to this paragraph (d) and of all
Basic Rent payable to and including such Basic Rent Payment Date, and any
Additional Rent and other amounts owing hereunder in respect of the affected
Unit, and shall then terminate upon the payment of such amounts and (iii) the
Lessor shall on such date transfer to the Lessee title to the Lessor's interest
in such Unit and all rights of the Lessor against the lessor under the Ground
Lease.
(e) If the Lease relating to a Unit of Property covered
by a Ground Lease is terminated or expires, Lessor shall assign its interest
under the Ground Lease to the purchaser of the Unit of Property, whether such
Unit of Property is sold to Lessee pursuant to Section 13, to a third party
pursuant to Section 12, or otherwise.
(f) The Lessee shall ensure that each Ground Lease shall
be a Mortgageable Ground Lease.
SECTION 29 Miscellaneous.
(a) All agreements, indemnities, representations and
warranties, and the obligation to pay Additional Rent contained in this Lease
shall survive the expiration or other termination hereof.
(b) This Lease and the Unit Leasing Records covering
Property leased pursuant hereto and the instruments, documents or agreements
referred to herein constitute the entire agreement between the parties and no
representations, warranties, promises, guarantees or agreements, oral or
written, express or implied, have been made by any party hereto with respect to
this Lease or the Property, except as provided herein or therein.
(c) This Lease may not be amended, modified or
terminated, nor may any obligation hereunder be waived orally, and no such
amendment, modification, termination or waiver shall be effective for any
purpose unless it is in writing, signed by the party against whom enforcement
thereof is sought. A waiver on one occasion shall not be construed to be a
waiver with respect to any other occasion.
(d) The captions in this Lease are for convenience of
reference only and shall not be deemed to affect the meaning or construction of
any of the provisions hereof. Any provision of this Lease which is prohibited
by law or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and the parties hereto shall
negotiate in good faith appropriate modifications to reflect such changes as
may be required by law, and, as nearly as possible, to produce the same
economic, financial and tax effects as the provision which is prohibited or
unenforceable; and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the Lessee and the
Lessor hereby waive any provision of law which renders any provision hereof
prohibited or unenforceable in any respect. THIS LEASE HAS BEEN EXECUTED AND
DELIVERED IN THE STATE OF NEW YORK. THE LESSEE AND THE LESSOR AGREE THAT, TO
THE MAXIMUM EXTENT PERMITTED BY THE LAW OF THE STATE OF NEW YORK, THIS LEASE,
AND THE RIGHTS AND DUTIES OF THE LESSEE AND THE LESSOR HEREUNDER, SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK
GENERAL OBLIGATIONS LAW) IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, IN
RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE BUT WITHOUT
GIVING EFFECT TO ANY PROVISION THEREOF THAT MAY REQUIRE APPLICATION OF THE LAWS
OF ANOTHER JURISDICTION. THE LESSEE HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN
THE COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND
RELATED TO OR IN CONNECTION WITH THIS LEASE OR THE TRANSACTIONS CONTEMPLATED
HEREBY, AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE LESSEE HEREBY WAIVES
AND AGREES NOT TO ASSERT BY WAY OF
AMENDED AND RESTATED LEASE AGREEMENT - Page 33
35
MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS LEASE OR ANY
DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER HEREOF MAY
NOT BE LITIGATED IN OR BY SUCH COURT. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE LESSEE AGREES NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF
THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION
WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. THE LESSEE
AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED
MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS LEASE OR ANY METHOD
AUTHORIZED BY THE LAWS OF NEW YORK. THE LESSOR AND THE LESSEE KNOWINGLY,
VOLUNTARILY AND EXPRESSLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ENFORCING OR DEFENDING ANY RIGHTS ARISING OUT OF OR
RELATING TO THIS LEASE OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE LESSOR AND
THE LESSEE ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH (D) OF THIS
SECTION 29 HAVE BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY
COUNSEL IN CONNECTION THEREWITH.
(e) In connection with any sale of Property pursuant to
SECTION 12, 13, 14, 15, 16, 19, 28 or 32 of this Lease, when the Lessor
transfers title, such transfer shall be on an as-is, non-installment sale
basis, without warranty by, or recourse to, the Lessor.
(f) Without in any way duplicating the Lessee's
obligations under SECTION 11 hereof, in connection with the sale or purchase of
Property pursuant to SECTION 12, 13, 14, 15, 16, 19, 28 or 32 of this Lease,
the Lessee shall pay or shall cause the purchaser of such Property to pay in
addition to the purchase price, all transfer taxes, transfer gains taxes,
mortgage recording tax, if any, recording and filing fees and all other similar
taxes, fees, expenses and closing costs (including reasonable attorneys' fees)
in connection with the conveyance of such Property to the Lessee or any
purchaser.
(g) If any costs of the Lessor related to the Acquisition
and Construction Agreement which were not included in the Acquisition Cost of a
of Property are allocated to such Unit of Property pursuant to the definition
of Acquisition Cost in the Acquisition and Construction Agreement, the Lessee
and the Lessor shall execute a revised Unit Leasing Record to amend the
Acquisition Cost for such Unit to reflect the increase in the Acquisition Cost.
(h) The Lessee and the Lessor agree to treat information
concerning the structure and documentation of the Acquisition and Construction
Agreement and this Lease confidentially including, without limitation, all
information received or obtained hereunder, except to the extent that
disclosure is required by law and generally accepted accounting principles.
The foregoing constraint shall not include: (i) information that is now in the
public domain or subsequently enters the public domain without fault on the
part of the Lessee or the Lessor, as the case may be; (ii) information
currently known to the Lessee from its own sources as evidenced by its prior
written records; (iii) information that the Lessee or the Lessor, as the case
may be, receives from a third party not under any obligation to keep such
information confidential; (iv) disclosure made to affiliates or the
professional advisors of the disclosing party for the purpose of obtaining
advice thereon, (v) disclosure made in connection with the enforcement of any
right pursuant hereto or pursuant to the Acquisition and Construction Agreement
and (vi) disclosure made to any Assignee, Certificate Holder, Lender, proposed
permitted transferee of any Lender and any counsel of the foregoing respecting
the transactions contemplated by this Lease and the Acquisition and
Construction Agreement. Each party hereto agrees that it will use its best
efforts not to disclose, or permit any of its employees or agents to disclose,
the terms of this Agreement in connection with the issuance or release for
external publication of any article
AMENDED AND RESTATED LEASE AGREEMENT - Page 34
36
or advertising or publicity matter relating to the terms and conditions of this
Agreement or the transactions contemplated hereby without the prior written
consent of each other party hereto.
(i) Except as provided herein, the parties agree that the
obligations of each Lessee hereunder are several and not joint and that each
Lessee shall only be liable for obligations hereunder to the extent relating to
such Units with respect to which such Lessee has executed the related Unit
Leasing Record.
SECTION 30 No Recourse.
The Lessor's obligations hereunder are intended to be the
obligations of the limited partnership only and no recourse for the payment of
any amount due under this Lease or for any claim based thereon or otherwise in
respect thereof, shall be had against any partner of the Lessor, the Trustee,
any Certificate Holder, or any incorporator, shareholder, member, officer,
director or Affiliate, as such, past, present or future of the entity which is
the general partner or of any successor entity to such general partner of the
Lessor, or against any member or beneficiary of a limited partner of the Lessor
or any successor member to or a beneficiary of a limited partner of the Lessor,
or against any direct or indirect parent corporation of such general partner or
of any limited partner of the Lessor or any other subsidiary or Affiliate of
any such direct or indirect parent corporation or any incorporator,
shareholder, officer or director, as such, past, present or future, of any such
parent or other subsidiary or Affiliate, it being understood that the Lessor is
a limited partnership formed for the purpose of the transactions involved in
and relating to this Lease on the express understanding aforesaid. Nothing
contained in this SECTION 30 shall be construed to limit the exercise or
enforcement, in accordance with the terms of this Lease and any other documents
referred to herein, of rights and remedies against the limited partnership or
the general partner of the Lessor or the assets of the limited partnership
which is the Lessor.
SECTION 31 No Merger.
There shall be no merger of this Lease or of the leasehold
estate hereby created with the fee estate in any Unit of Property by reason of
the fact that the same person acquires or holds, directly or indirectly, this
Lease or the leasehold estate hereby created or any interest herein or in such
leasehold estate as well as the fee estate in any Unit of Property or any
interest in such fee estate.
SECTION 32 Substitution of Property.
(a) At any time during the Lease Term upon three (3)
months' notice to the Lessor, the Lessee may (1) deliver to the Lessor and the
Assignee a written notice signed by a Responsible Officer stating that this
Lease shall terminate on any Basic Rent Payment Date with respect to any Unit
of Property specified in such notice which has reached an Uneconomic Condition;
and (2) substitute for such Unit of Property on such date similar property
(including, without limitation, related equipment) so long as such replacement
property has a fair market value at least equal to the Acquisition Cost of the
replaced Unit of Property and a Forecasted Value at least equal to forty-nine
and two/tenths percent (49.2%) of such Acquisition Cost, assuming that the
replaced Unit of Property was in the condition required by this Lease (any such
substitute property being hereinafter referred to as "SUBSTITUTION PROPERTY").
(b) Such option set forth in paragraph (a) above shall be
exercised by the delivery to the Lessor of a notice of substitution (the
"NOTICE OF SUBSTITUTION") which shall (i) identify the Unit of Property that
the Lessee desires to replace, (ii) describe by accurate legal description the
Substitution Property, (iii) set forth the fair market value of such
Substitution Property, (iv) include a copy of an appraisal for the Substituted
Property with respect to the fair market value and Forecasted Value thereof as
described in the preceding paragraph, such appraisal to be performed by a
Person reasonably satisfactory to the Lessor and the Assignee, and, in the case
of an NTI, a Phase I environmental report and, if appropriate in light of such
environmental report, a Phase II environmental report or, in the case of a CTO,
a Phase II environmental report, certified to the Lessor and the Assignee and
reasonably satisfactory to the Lessor and the Assignee in all respects,
prepared by a reputable independent environmental
AMENDED AND RESTATED LEASE AGREEMENT - Page 35
37
consulting firm reasonably acceptable to the Lessor and the Assignee which
addresses the matters required to be addressed by, and is performed in
accordance with, the requirements of the ASTM, as established by ASTM Standard
E152, and which indicates that the Substitution Property is free from Hazardous
Substance contamination which exceeds the concentrations set forth in a Tier 2
of the ASTM Risk-Based Corrective Action screening analysis, and (v) specify
the date on which such substitution shall be effected (the "SUBSTITUTION
DATE"); provided that the exercise of said option shall be ineffective if,
within twenty (20) days after receipt of the Substitution Notice, the Lessor
shall advise the Lessee that (x) the Lessor or the Assignee is not reasonably
satisfied with the appraisal or the environmental state of such Substitution
Property, or (y) as a result of such proposed substitution any taxes payable
by the Lessor and not recoverable hereunder from the Lessee would be materially
increased, or (z) such proposed substitution would require the Lessor to
qualify to do business in a jurisdiction in which it was not then qualified.
(c) At least ten (10) Business Days prior to the
Substitution Date, the Lessee shall deliver to the Lessor those documents,
certificates and representations required under Section 4(a) of the Acquisition
and Construction Agreement, substantially in the format required under Exhibit
C of the Acquisition and Construction Agreement, together with the following:
(i) An amendment to the Unit Leasing Record for the
Unit of Property for which the substitution is
being made, releasing the replaced Property from,
and subjecting the Substitution Property to the
terms of, this Lease;
(ii) A certificate, signed by a Responsible Officer of
the Lessee and dated the Substitution Date,
certifying that the Lessee has no knowledge or
reason to believe that the information contained
in any appraisal or any environmental report
furnished to the Lessor pursuant to this SECTION
32 is not accurate and complete in all respects
on and as of the Substitution Date;
(iii) A certificate, signed by a Responsible Officer of
the Lessee and dated the Substitution Date,
certifying that the representations and
warranties contained in SECTION 2 of this Lease
are true and correct in all respects on and as of
the Substitution Date as though made on and as of
such Substitution Date and that on the
Substitution Date no Event of Default or
Potential Default has occurred and is continuing;
(iv) An opinion or opinions of counsel reasonably
satisfactory to the Lessor and the Assignee,
dated the Substitution Date as to the
effectiveness of the form of documents being
delivered to transfer title to the Substitution
Property, the due authorization, execution and
delivery of documents in connection with such
substitution, the recording of security interests
with respect to such Substitution Property, that
such Substitution Property will be subject to
this Lease, and, if such Substitution Property is
a Remediation Property, also subject to a Ground
Lease, that the validity of this Lease will not
be affected by the substitution, and as to such
other matters as the Lessor and the Assignee may
reasonably request; and
(v) Such other documents as may be reasonably
necessary to consummate the transaction
contemplated herein.
The Lessor shall convey to the Lessee each Unit of Property and the Lessor's
rights under any Ground Lease related thereto for which a substitution is made
on an as-is, non-installment sale basis, without warranty by, or recourse to,
the Lessor. The Lessee shall pay all transfer taxes, transfer gains taxes,
mortgage recording tax, if any, recording and filing fees and all other similar
taxes, fees, expenses and closing costs (including reasonable attorney's fees)
in connection with the substitution of any Property.
AMENDED AND RESTATED LEASE AGREEMENT - Page 36
38
(d) Each Substitution Property shall, from and after the
Substitution Date, be subject to the provisions of this Lease and, if relevant,
the related Ground Lease, and be deemed a part of the Property, as if such
Substitution Property was the Unit of Property for which it is being
substituted. For the avoidance of doubt, the Acquisition Cost of the
substituted property shall, from and after the date of any such substitution,
be deemed to be the Acquisition Cost of such Substitution Property.
AMENDED AND RESTATED LEASE AGREEMENT - Page 37
39
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this
Lease to be executed and delivered by their duly authorized officers as of the
day and year first above written.
JAMESTOWN FUNDING, LIMITED PARTNERSHIP
BY: JAMESTOWN CAPITAL, L.L.C., Its
General Partner
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
ULTRAMAR INC.
By: /s/ STEPHEN A. BLANK
-----------------------------------
Name: Stephen A. Blank
Title: Treasurer
ULTRAMAR ENERGY INC.
By: /s/ STEPHEN A. BLANK
-----------------------------------
Name: Stephen A. Blank
Title: Treasurer
DIAMOND SHAMROCK REFINING AND
MARKETING COMPANY
By: /s/ R.C. BECKER
-----------------------------------
Name: R.C. Becker
Title:
AMENDED AND RESTATED LEASE AGREEMENT - Page 38
40
DIAMOND SHAMROCK LEASING, INC.
By: /s/ R.C. BECKER
-----------------------------------
Name: R.C. Becker
Title:
DIAMOND SHAMROCK ARIZONA, INC.
By: /s/ R.C. BECKER
-----------------------------------
Name: R.C. Becker
Title:
AMENDED AND RESTATED LEASE AGREEMENT - Page 39
41
EXHIBIT A
UNIT LEASING RECORD to the Amended Lessor: Jamestown Funding, Limited
and Restated Lease Agreement, dated as of Partnership
December 19, 1996 between Jamestown
Funding, Limited Partnership, as lessor, Lessee: Ultramar Inc. or
and Ultramar Inc., Ultramar Energy Inc. Ultramar Energy, Inc. or
Diamond Shamrock Leasing, Inc., Diamond Diamond Shamrock Refining
Shamrock Arizona, Inc. and Diamond Shamrock and Marketing Company or
Refining and Marketing Diamond Shamrock Leasing, Inc. or
Company, as lessee (the "LEASE AGREEMENT"). Diamond Shamrock Arizona, Inc.
A. ULR No.: ____
Effective Date of this
Unite Leasing Record ("ULR") ____________________, _____.
B. PLEASE COMPLETE THE FOLLOWING STATEMENTS, IF APPLICABLE:
1. This ULR relates to [Deed/Ground Lease/Bill of Sale/Invoice]
dated ______________________, _____.
PROPERTY OR DESCRIPTION AND RENTAL INFORMATION
C. Type of Property
_______________________________________________________________________
D. Specific Description (See Schedule A hereto if more space needed)
_______________________________________________________________________
_______________________________________________________________________
E. Location of Property
_______________________________________________________________________
State County City
F. Basic Additional Sale & Use Acquisition
Cost Charges Tax Cost
$__________ + $__________ + $__________ = $__________
G. The Interim Term, Basic Term and Extended Term for the Property
placed under lease pursuant to this ULR will be in accordance with the
Lease Agreement.
H. The Basic Rent is as defined in the Lease Agreement.
I. Termination of the lease of the Unit of Property leased pursuant to
this ULR will be in accordance with the Lease Agreement.
AMENDED AND RESTATED LEASE AGREEMENT - Page 2
42
J. Capitalized terms used in this Unit Leasing Record and not otherwise
defined herein shall have the meanings attributed to them in the Lease
Agreement.
K. ACKNOWLEDGMENT AND EXECUTION
The undersigned Lessor hereby leases to the undersigned Lessee, and
the Lessee acknowledges delivery to it in good condition of the Unit
of Property described in this ULR. The Lessee agrees to pay the
Basic Rent, Additional Rent and additional payments set forth in the
Lease Agreement. The covenants, terms and conditions of this lease
are those appearing in the Lease Agreement, as it may from time to
time be amended, which covenants, terms and conditions are hereby
incorporated by reference. The terms used herein have the meaning
assigned to them in the Lease Agreement.
LESSEE: LESSOR:
- ------- -------
ULTRAMAR [INC.][ENERGY, INC.] JAMESTOWN FUNDING, LIMITED PARTNERSHIP
[DIAMOND SHAMROCK LEASING, INC.
DIAMOND SHAMROCK ARIZONA, INC.
DIAMOND SHAMROCK REFINING AND
MARKETING COMPANY] BY: JAMESTOWN CAPITAL, L.L.C.,
Its General Partner
By: By:
----------------------------- ----------------------------------
Name: Name:
--------------------------- --------------------------------
Title: Title:
-------------------------- -------------------------------
AMENDED AND RESTATED LEASE AGREEMENT - Page 3
43
TABLE OF CONTENTS
Section Heading Page
- ------- ------- ----
1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2 [Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3 Lease of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4 Operating Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5 Disclaimer; Net Lease. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6 Interim Term; Basic Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7 Rent and Other Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
8 Restricted Use and Sublease; Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . 13
9 Maintenance, Improvement and Repair of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
11 Indemnities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12 Lease Expiration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13 Lessee's Rights of Purchase; Lease Extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
14 Lessor's Right to Terminate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
15 Loss of or Damage to Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
16 Condemnation and Dedication of Property; Easements. . . . . . . . . . . . . . . . . . . . . . . . . 24
17 Surrender of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
18 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
19 Rights upon Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
20 Sale or Assignment by Lessor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
21 Income Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
22 Notices and Requests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
23 Covenant of Quiet Enjoyment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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44
24 Right to Perform for Lessee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
25 Merger, Consolidation or Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
26 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
27 Permitted Contests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
28 Leasehold Interests Relating to Properties subject to a Ground Lease. . . . . . . . . . . . . . . . 32
29 Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
30 No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
31 No Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
32 Substitution of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Exhibit A - Form of Unit Leasing Record
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