EXHIBIT (10.11)
MASTER AGREEMENT
Dated as of August 27, 1999
among
▇▇▇▇ FURNITURE, INC. AND
CERTAIN OTHER SUBSIDIARIES OF THE ▇▇▇▇ COMPANIES
THAT MAY HEREAFTER BECOME PARTY HERETO,
as Lessees,
THE ▇▇▇▇ COMPANIES,
THE ▇▇▇▇▇▇▇▇ GOLD CO.,
▇▇▇▇ PROPERTIES, INC.,
STOREHOUSE, INC.,
HOME ELEMENTS, INC.,
▇▇▇▇ DIVERSIFIED, INC.
AND
WEXFORD COLLECTION, INC. AND
CERTAIN OTHER SUBSIDIARIES OF THE ▇▇▇▇ COMPANIES
THAT MAY HEREAFTER BECOME PARTY HERETO,
as Guarantors,
ATLANTIC FINANCIAL GROUP, LTD., as Lessor,
CRESTAR BANK AND
CERTAIN FINANCIAL INSTITUTIONS PARTIES HERETO,
as Lenders
and
CRESTAR BANK, as Agent
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ARTICLE I. DEFINITIONS; INTERPRETATION................................................................ 2
ARTICLE II. ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION...................................................................... 2
SECTION 2.1 Agreement to Acquire, Construct,
Fund and Lease...................................................................... 2
(a) Land....................................................................................... 2
(b) Building................................................................................... 2
SECTION 2.2 Fundings of Purchase Price, Development
Costs and Construction Costs........................................................ 3
(a) Initial Funding and Payment of Purchase Price
for Land and Development Costs on Closing Date............................................. 3
(b) Subsequent Fundings and Payments of Construction
Costs during Construction Term............................................................. 3
(c) Aggregate Limits on Funded Amounts......................................................... 4
(d) Notice, Time and Place of Fundings......................................................... 4
(e) Lessee's Deemed Representation for Each Funding............................................ 5
(f) Not Joint Obligations...................................................................... 5
(g) Non-Pro Rata Fundings...................................................................... 6
SECTION 2.3 Funded Amounts and Interest and Yield
Thereon; Facility Fee............................................................... 6
SECTION 2.4 Lessee Owner for Tax Purposes....................................................... 7
SECTION 2.5 Amounts Due Under Lease............................................................. 8
ARTICLE III. CONDITIONS PRECEDENT; DOCUMENTS............................................................ 9
SECTION 3.1 Conditions to the Obligations of the
Funding Parties on each Closing Date............................................... 9
(a) Documents.................................................................................. 9
(b) Litigation................................................................................. 14
(c) Legality................................................................................... 14
(d) No Events.................................................................................. 14
(e) Representations............................................................................ 15
(f) Cutoff Date................................................................................ 15
(g) Transaction Expenses....................................................................... 15
SECTION 3.2 Additional Conditions for the
Closing Date........................................................................ 15
(a) Loan Agreement; Guaranty Agreement.................................................. 15
(b) Master Agreement.................................................................... 15
(c) Construction Agency Agreement....................................................... 15
(d) Lease............................................................................... 15
(e) Lease Supplement.................................................................... 16
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(f) Obligor's Resolutions and Incumbency
Certificate, etc.................................................................... 16
(g) Opinions of Counsel................................................................. 16
(h) Good Standing Certificate........................................................... 16
(i) Lessor's Consents and Incumbency
Certificate, etc.................................................................... 16
(j) Funding Request..................................................................... 17
SECTION 3.3 Conditions to the Obligations
of Lessee........................................................................... 17
(a) General Conditions......................................................................... 17
(b) Legality................................................................................... 17
(c) Purchase Agreement......................................................................... 17
SECTION 3.4 Conditions to the Obligations of the
Funding Parties on each Funding Date................................................ 17
(a) Funding Request............................................................................ 18
(b) Condition Fulfilled........................................................................ 18
(c) Representations............................................................................ 18
(d) No Bonded Stop Notice or Filed Mechanics Lien.............................................. 18
SECTION 3.5 Completion Date Conditions.......................................................... 18
(a) Title Policy Endorsements; Architect's
Certificate................................................................................ 18
(b) Construction Completion.................................................................... 19
(c) Construction Agent Certification........................................................... 19
SECTION 3.6 Addition of Lessees................................................................. 20
ARTICLE IV. REPRESENTATIONS............................................................................ 21
SECTION 4.1 Representations of Obligors......................................................... 21
(a) Financial Condition........................................................................ 21
(b) No Change.................................................................................. 22
(c) Corporate Existence; Compliance with Law................................................... 22
(d) Corporate Power; Authorization; Enforceable
Obligations................................................................................ 22
(e) No Legal Bar............................................................................... 23
(f) No Material Litigation..................................................................... 23
(g) No Default................................................................................. 23
(h) Taxes...................................................................................... 23
(i) Federal Regulations........................................................................ 24
(j) ERISA...................................................................................... 24
(k) Investment Company Act; Other Regulations.................................................. 24
(l) Purpose of Fundings........................................................................ 24
(m) Disclosure................................................................................. 25
(n) Hazardous Materials - Leased Properties.................................................... 25
(o) Leased Property............................................................................ 26
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SECTION 4.2 Survival of Representations and Effect
of Fundings......................................................................... 27
(a) Survival of Representations and Warranties................................................. 27
(b) Each Funding a Representation.............................................................. 27
SECTION 4.3 Representations of the Lessor....................................................... 27
(a) Securities Act............................................................................. 27
(b) Due Organization, etc...................................................................... 27
(c) Due Authorization; Enforceability, etc..................................................... 28
(d) No Conflict................................................................................ 28
(e) Litigation................................................................................. 28
(f) Lessor Liens............................................................................... 28
(g) Employee Benefit Plans..................................................................... 29
(h) General Partner............................................................................ 29
(i) Financial Information...................................................................... 29
(j) No Offering................................................................................ 29
SECTION 4.4 Representations of each Lender...................................................... 29
(a) Securities Act............................................................................. 30
(b) Employee Benefit Plans..................................................................... 30
ARTICLE V. COVENANTS OF OBLIGORS AND THE LESSOR....................................................... 30
SECTION 5.1 Affirmative Covenants............................................................... 30
(a) Financial Statements....................................................................... 30
(b) Certificates; Other Information............................................................ 31
(c) Conduct of Business and Maintenance of
Existence.................................................................................. 32
(d) Inspection of Property; Books, Records and
Discussions................................................................................ 32
(e) Notices.................................................................................... 32
(f) Taxes...................................................................................... 32
(g) Maintenance of Property.................................................................... 33
(h) Insurance.................................................................................. 33
(i) Environmental Matters...................................................................... 33
(j) Year 2000 Compliance....................................................................... 33
(k) Financial Positions........................................................................ 34
(l) Qualified Swap Agreement................................................................... 34
(m) Most Favored Lender Status................................................................. 35
SECTION 5.2 Negative Covenants................................................................ 35
(a) Negative Pledge............................................................................ 35
(b) Notice of Merger, Consolidation, Disposition of
Assets..................................................................................... 35
(c) Contingent Liabilities..................................................................... 36
SECTION 5.3 Further Assurances................................................................ 36
SECTION 5.4 Additional Required Appraisals.................................................... 36
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SECTION 5.5 Lessor's Covenants................................................................ 36
ARTICLE VI. TRANSFERS BY LESSOR AND LENDERS............................................................ 38
SECTION 6.1 Lessor Transfers.................................................................. 38
SECTION 6.2 Lender Transfers.................................................................. 38
ARTICLE VII. INDEMNIFICATION............................................................................ 40
SECTION 7.1 General Indemnification........................................................... 40
SECTION 7.2 Environmental Indemnity........................................................... 43
SECTION 7.3 Proceedings in Respect of Claims.................................................. 45
SECTION 7.4 General Tax Indemnity............................................................. 47
(a) Tax Indemnity.............................................................................. 47
(b) Exclusions from General Tax Indemnity...................................................... 48
(c) Contests................................................................................... 51
(d) Reimbursement for Tax Savings.............................................................. 53
(e) Payments................................................................................... 54
(f) Reports.................................................................................... 54
(g) Verification............................................................................... 54
SECTION 7.5 Increased Costs, etc................................................................ 55
(a) Illegality................................................................................. 55
(b) Requirements of Law........................................................................ 55
(c) Capital Adequacy........................................................................... 56
(d) Taxes...................................................................................... 57
(e) Tax Forms.................................................................................. 58
(f) Indemnity.................................................................................. 59
(g) Action of Affected Funding Parties......................................................... 59
SECTION 7.6 End of Term Indemnity............................................................... 60
ARTICLE VIII. MISCELLANEOUS.............................................................................. 61
SECTION 8.1 Survival of Agreements............................................................ 61
SECTION 8.2 Notices........................................................................... 61
SECTION 8.3 Counterparts...................................................................... 62
SECTION 8.4 Amendments........................................................................ 62
SECTION 8.5 Headings, etc..................................................................... 63
SECTION 8.6 Parties in Interest............................................................... 63
SECTION 8.7 GOVERNING LAW..................................................................... 64
SECTION 8.8 Expenses.......................................................................... 64
SECTION 8.9 Severability...................................................................... 64
SECTION 8.10 Liabilities of the Funding Parties................................................ 64
SECTION 8.11 Submission to Jurisdiction; Waivers............................................... 65
SECTION 8.12 Liabilities of the Agent.......................................................... 65
SECTION 8.13 Agent to Communicate with Funding
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Parties.......................................................................... 66
SECTION 8.14 Seniority of Lease............................................................... S-1
APPENDIX A Definitions and Interpretation
SCHEDULES
SCHEDULE 2.2 Commitments
SCHEDULE 8.2 Notice Information
EXHIBITS
EXHIBIT A Form of Funding Request
EXHIBIT B Form of Assignment of Lease and Rents
EXHIBIT C Form of Security Agreement and Assignment
EXHIBIT D-1 Form of Mortgage
EXHIBIT D-2 Form of Deed of Trust
EXHIBIT E [Reserved]
EXHIBIT F Form of Assignment and Acceptance Agreement
EXHIBIT G Forms of Opinions of Counsel
EXHIBIT H Form of Certification of Construction Completion
EXHIBIT I Form of Payment Date Notice
EXHIBIT J Form of Joinder Agreement
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MASTER AGREEMENT
THIS MASTER AGREEMENT, dated as of August 27, 1999 (as it may be amended or
modified from time to time in accordance with the provisions hereof, this
"Master Agreement"), is among ▇▇▇▇ FURNITURE, INC., a Virginia corporation
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("▇▇▇▇ Furniture"), and certain Subsidiaries of ▇▇▇▇ Companies that may
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hereafter become parties hereto as lessees pursuant to Section 3.6
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(individually, a "Lessee" and collectively "Lessees"), THE ▇▇▇▇ COMPANIES, a
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Nevada corporation ("▇▇▇▇ Companies"), THE ▇▇▇▇▇▇▇▇ GOLD CO., a North Carolina
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corporation, ▇▇▇▇ PROPERTIES, INC., a California corporation, STOREHOUSE, INC.,
a Georgia corporation, HOME ELEMENTS, INC., a Virginia corporation, ▇▇▇▇
DIVERSIFIED, INC., a Delaware corporation and WEXFORD COLLECTION, INC., a
California corporation and certain other Subsidiaries of ▇▇▇▇ Companies that may
hereafter become party hereto,(individually, a "Guarantor" and collectively
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"Guarantors"), ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
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"Lessor"), CRESTAR BANK, a Virginia banking corporation, and certain financial
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institutions parties hereto as lenders (together with any other financial
institution that becomes a party hereto as a lender, collectively referred to as
"Lenders" and individually as a "Lender"), and CRESTAR BANK, a Virginia banking
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corporation, as agent for the Lenders (in such capacity, the "Agent").
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PRELIMINARY STATEMENT
In accordance with the terms and provisions of the Bridge Agreement, (i)
the Lessor has acquired Land identified by ▇▇▇▇ Furniture, and contemplates
leasing such Land and any Buildings thereon to a Lessee, (ii) ▇▇▇▇ Furniture, as
Construction Agent for the Lessor, wishes, in certain instances, to construct
Buildings on Land for the Lessor and, when completed, the related Lessee wishes
to lease such Buildings from the Lessor as part of the Leased Properties under
the Lease, (iii) the Lessor has provided Funding for the acquisition of the
Land, with, in part, loan proceeds from Agent, and (iv) ▇▇▇▇ Furniture as
Construction Agent wishes to obtain, and the Lessor is willing to provide,
funding for the construction of Buildings, and (v) the Lessor wishes to obtain,
and Lenders are willing to provide, from time to time, financing of a portion of
the funding of the acquisition of the Land and Building and, if applicable, the
construction of the Buildings.
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In consideration of the mutual agreements contained in this Master
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and not
defined herein shall have the meanings assigned thereto in Appendix A hereto for
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all purposes hereof; and the rules of interpretation set forth in Appendix A
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hereto shall apply to this Master Agreement.
ARTICLE II.
ACQUISITION, CONSTRUCTION AND LEASE; FUNDINGS;
NATURE OF TRANSACTION
SECTION 2.1 Agreement to Acquire, Construct, Fund and Lease.
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(a) Land. Subject to the terms and conditions of this Master
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Agreement (i) pursuant to the Bridge Agreement, the Lessor has acquired such
interest in the Land and any Building thereon, from the applicable Seller
pursuant to the applicable Purchase Agreement, (ii) the Lessor hereby agrees to
lease such Land and any Building thereon to the related Lessee pursuant to the
Lease, and (iii) the related Lessee hereby agrees to lease such Land, and any
Building thereon, from the Lessor pursuant to the Lease.
(b) Building. With respect to each parcel of Land on which a Building
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is to be constructed, subject to the terms and conditions of this Master
Agreement, from and after the Closing Date relating to such Land (i) the
Construction Agent agrees, pursuant to the terms of the Construction Agency
Agreement, to construct and install the Building on such Land for the Lessor
prior to the Scheduled Construction Termination Date, (ii) the Lenders and the
Lessor agree to fund the costs of such construction and installation (and
interest and yield thereon), (iii) the Lessor shall lease such Building as part
of such Leased Property to the related Lessee pursuant to the Lease, and (iv)
the related Lessee shall lease such Building from the Lessor pursuant to the
Lease. Each Lender hereby consents to the appointment of ▇▇▇▇ Furniture as
Construction Agent.
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SECTION 2.2 Fundings of Purchase Price, Development Costs and Construction
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Costs.
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(a) Initial Funding and Payment of Purchase Price for Land and
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Development Costs on Closing Date. Subject to the terms and conditions of this
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Master Agreement, on the Closing Date, each Lender shall make available to the
Lessor its initial Loan with respect to such Land, and any Building thereon, in
an amount equal to the product of such Lender's Commitment Percentage times the
purchase price for the Land, and any Building thereon, and the development,
transaction and closing costs incurred by the Construction Agent, as agent,
through such Closing Date, which funds the Lessor shall use, together with the
Lessor's own funds in an amount equal to the product of the Lessor's Commitment
Percentage times the purchase price for the related Land and any Building
thereon, and the development, transaction and closing costs incurred by the
Construction Agent, as agent, through such Closing Date, to purchase the Land,
and any Building thereon, from the applicable Seller pursuant to the applicable
Purchase Agreement, and to pay to the Construction Agent the amount of such
development, transaction and closing costs, and the Lessor shall lease such Land
to the related Lessee pursuant to the Lease. It is expressly acknowledged that
buildings existing on the closing date of the acquisition of the Land will be
demolished as part of the development contemplated by the parties and that such
is permissible, and funding therefor shall be advanced along with funding of the
development of the Land.
(b) Subsequent Fundings and Payments of Construction Costs during
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Construction Term. Subject to the terms and conditions of this Master
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Agreement, if a Building is to be constructed on Land, on each Funding Date
following the Closing Date for each such parcel of Land until the related
Construction Term Expiration Date, (i) each Lender shall make available to the
Lessor a Loan in an amount equal to the product of such Lender's Commitment
Percentage times the amount of Funding requested by the Construction Agent for
such Funding Date, which funds the Lessor hereby directs each Lender to pay over
to the Construction Agent as set forth in paragraph (d), and (ii) the Lessor
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shall pay over to the Construction Agent its own funds (which shall constitute a
part of, and an increase in, the Lessor's Invested Amount with respect to such
Leased Property) in an amount equal to the product of the Lessor's Commitment
Percentage times the amount of Funding requested by the Construction Agent for
such Funding Date.
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(c) Aggregate Limits on Funded Amounts. The aggregate amount that the
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Funding Parties shall be committed to provide as Funded Amounts under this
Master Agreement and the Loan Agreement shall not exceed (x) with respect to
each Leased Property the costs of purchase and construction of such Leased
Property and the related development, transaction, closing and financing costs,
or (y) $25,000,000 in the aggregate for all Leased Properties. The aggregate
amount that any Funding Party shall be committed to fund under this Master
Agreement and the Loan Agreement shall not exceed the lesser of (i) such Funding
Party's Commitment and (ii) such Funding Party's Commitment Percentage of the
aggregate Fundings requested under this Master Agreement.
(d) Notice, Time and Place of Fundings. With respect to each Funding,
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a Lessee or the Construction Agent, as the case may be, shall give the Lessor
and the Agent an irrevocable prior written notice not later than 11:00 a.m.,
Roanoke, Virginia time, at least three Business Days prior to the proposed
Closing Date or other Funding Date, as the case may be, pursuant, in each case,
to a Funding Request in the form of Exhibit A (a "Funding Request"), specifying
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the Closing Date or subsequent Funding Date, as the case may be, the amount of
Funding requested, whether such Funding shall be a LIBOR Advance or a Prime Rate
Advance or a combination thereof and the Rent Period(s) therefor. All documents
and instruments required to be delivered on such Closing Date pursuant to this
Master Agreement shall be delivered at the offices of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or at such
other location as may be determined by the Lessor, the Construction Agent and
the Agent. Each Funding shall occur on a Business Day and (other than the final
Funding) shall be in an amount equal to $1,000,000 or an integral multiple of
$100,000 in excess thereof. All remittances made by any Lender and the Lessor
for any Funding shall be made in immediately available funds by wire transfer to
or, as is directed by, the Construction Agent, with receipt by the Construction
Agent not later than 12:00 noon, Roanoke, Virginia time, on the applicable
Funding Date, upon satisfaction or waiver of the conditions precedent to such
Funding set forth in Section 3; such funds shall (1) in the case of the initial
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Funding on the Closing Date, be used to pay the purchase price to the applicable
Seller (or to reimburse Lessor) for the related Land and pay development,
transaction and closing costs related to such Land, and (2) in the case of each
subsequent Funding be paid to the Construction Agent, for the payment or
reimbursement of Construction costs incurred through such Funding Date and not
previously paid or reimbursed. Except as otherwise expressly provided below,
any request for Funding shall be made solely by
4
the Construction Agent in accordance with the Construction Agency Agreement of
even date herewith. No other Funding may occur without the Lessee's (and if a
different party, the Construction Agent's) consent except for automatic payments
and accruals under Section 2.3(c).
(e) Lessee's Deemed Representation for Each Funding. Each Funding
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Request by a Lessee or the Construction Agent shall be deemed a reaffirmation of
each Lessee's indemnity obligations in favor of the Indemnitees under the
Operative Documents and a representation and warranty to the Lessor, the Agent
and the Lenders that on the Closing Date or Funding Date, as the case may be,
(i) the amount of Funding requested represents amounts owing in respect of the
purchase price of the related Land, and any Building thereon, and development,
transaction and closing costs in respect of the Leased Property (in the case of
the initial Funding on a Closing Date) or amounts that are then due (or that the
Lessee expects to become due within the next thirty days) to third parties in
respect of the Construction, or development and/or transaction costs, or amounts
paid by the Construction Agent to third parties in respect of the Construction
for which the Construction Agent has not previously been reimbursed by a Funding
(in the case of any Funding), (ii) no Event of Default or Potential Event of
Default exists, and (iii) the representations and warranties of each Obligor set
forth in Section 4.1 are true and correct in all material respects as though
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made on and as of such Funding Date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.
(f) Not Joint Obligations. Notwithstanding anything to the contrary
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set forth herein or in the other Operative Documents, each Lender's and the
Lessor's commitments shall be several, and not joint. In no event shall any
Funding Party be obligated to fund an amount in excess of such Funding Party's
Commitment Percentage of any Funding, or to fund amounts in the aggregate in
excess of such Funding Party's Commitment. However, in the case of a Loan Event
of Default or a Potential Loan Event of Default by Lessor (not resulting from an
Event of Default by the Lessee), Fundings shall be made directly to the
Construction Agent or, if deemed advisable by the Lenders and the Lessees, the
Lenders and Lessees shall cooperate in good faith to find a replacement Lessor;
provided that the Lenders, the Lessees and the Lessor shall negotiate in good
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faith, execute and deliver appropriate amendments to the Operative Documents to
effect such direct Fundings or the replacement of the Lessor, as applicable.
5
(g) Non-Pro Rata Fundings. Notwithstanding anything to the contrary
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set forth in this Master Agreement, Lessor shall satisfy its Funding obligations
on the Closing Date. The Lessor's Commitment is fully funded, the Lenders will
fund, on a pro rata basis as among themselves, 100% of the amount of the
Fundings thereafter. In no event shall any Funding Party have any obligation to
fund any amount hereunder in excess of the amount of such Funding Party's
Commitment.
SECTION 2.3 Funded Amounts and Interest and Yield Thereon; Facility Fee.
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(a) The Lessor's Invested Amount for any Leased Property outstanding
from time to time shall accrue yield ("Yield") at the Lessor Rate, computed
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using the actual number of days elapsed and a 360 day year. If all or a portion
of the principal amount of or yield on the Lessor's Invested Amounts shall not
be paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall, without limiting the rights of the Lessor under the
Lease, to the maximum extent permitted by law, accrue yield at the Overdue Rate,
from the date of nonpayment until paid in full (both before and after judgment).
(b) Each Lender's Funded Amount for any Leased Property outstanding
from time to time shall accrue interest as provided in the Loan Agreement.
(c) Unless otherwise agreed by the Lessee and the Agent, during the
Construction Term, in lieu of the payment of accrued interest, on each Payment
Date, each Lender's Funded Amount shall automatically be increased by the amount
of interest accrued and unpaid on the related Loans pursuant to the Loan
Agreement during the Rent Period ending immediately prior to such Payment Date
(except to the extent that at any time such increase would cause such Lender's
Funded Amount to exceed such Lender's Commitment, in which event the related
Lessee shall pay such excess amount to such Lender in immediately available
funds on such Payment Date). Similarly, in lieu of the payment of accrued
Yield, on each Payment Date, the Lessor's Invested Amount shall automatically be
increased by the amount of Yield accrued on the Lessor's Invested Amount in
respect of such Leased Property during the Rent Period ending immediately prior
to such Payment Date (except to the extent that at any time such increase would
cause the Lessor's Invested Amount to exceed the Lessor's Commitment, in which
event the related Lessee shall pay such excess amount to the Lessor in
immediately available funds on
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such Payment Date). Such increases in Funded Amounts shall occur without any
disbursement of funds by the Funding Parties.
(d) Three Business Days prior to the last day of each Rent Period,
▇▇▇▇ Furniture shall deliver to the Lessor and the Agent a notice substantially
in the form of Exhibit I (each, a "Payment Date Notice"), appropriately
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completed, specifying the allocation of the Funded Amounts related to such Rent
Period to LIBOR Advances and Prime Rate Advances and the Rent Periods therefor,
provided that no such allocation shall be in an amount less than $1,000,000.
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Each such Payment Date Notice shall be irrevocable. If no such notice is given,
the Funded Amounts shall be allocated to a LIBOR Advance with a Rent Period of
one (1) month.
(e) the Lessee hereby agrees to pay to each Funding Party a facility
fee for each day from August 27, 2000 until the Lease Termination Date equal to
(i) the applicable percentage set forth below for the corresponding Funded Debt
to Cash Flow Ratio as most recently determined based on ▇▇▇▇ Companies' most
recent audited annual or unaudited quarterly consolidated financial statements,
as applicable, per annum times (ii) the unused amount of such Funding Party's
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Commitment on such day, times (iii) 1/360. Such facility fee shall be payable
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in arrears on each Quarterly Payment Date.
Facility Fee Percentages
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Funded Debt to Cash Flow Ratio Facility Fee Percentages
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greater than 2.25:1.00 0.35%
lesser or equal to 2.25:1.00 0.25%
lesser or equal to 2.00:1.00 0.18%
lesser or equal to 1.75:1.00 0.15%
lesser or equal to 1.25:1.00 0.12%
lesser or equal to 0.50:1.00 0.10%
SECTION 2.4 Lessee Owner for Tax Purposes. With respect to each Leased
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Property, it is the intent of the Lessees and the Funding Parties that the Lease
be treated as an operating lease for financial accounting purposes but for
federal, state and local tax and commercial law purposes the Lease shall be
treated as the repayment and security provisions of a loan by the Lessor to the
Lessees, and that the related Lessee shall be treated as the legal and
beneficial owner entitled to any and all benefits of ownership of such Leased
Property and all payments of Basic Rent during the Lease Term shall be treated
as payments of interest and principal. Each Lessee and each Funding Party agree
7
to file tax returns consistent with such intent. Nevertheless, each Lessee
acknowledges and agrees that no Funding Party or any other Person has made any
representations or warranties concerning the tax, financial, accounting or legal
characteristics or treatment of the Operative Documents and that each Lessee has
obtained and relied solely upon the advice of its own tax, accounting and legal
advisors concerning the Operative Documents and the accounting, tax, financial
and legal consequences of the transactions contemplated therein.
SECTION 2.5 Amounts Due Under Lease. With respect to each Leased
-----------------------
Property, anything else herein or elsewhere to the contrary notwithstanding, it
is the intention of the Lessees and the Funding Parties that: (i) subject to
clauses (ii) and (iii) below, the amount and timing of Basic Rent due and
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payable from time to time from the related Lessee under the Lease shall be equal
to the aggregate payments due and payable with respect to interest on the Loans
in respect of such Leased Property and Yield on the Lessor's Invested Amounts in
respect of such Leased Property on each Payment Date; (ii) if the related Lessee
elects the Purchase Option with respect to a Leased Property or becomes
obligated to purchase such Leased Property under the Lease, the Funded Amounts
in respect of such Leased Property, all interest and Yield thereon and all other
obligations of the related Lessee owing to the Funding Parties in respect of
such Leased Property shall be paid in full by Lessee, (iii) if the Lessees
properly elect the Remarketing Option, the principal amount of, and accrued
interest on, the A Loans in respect of the Leased Properties, will be paid out
of the Recourse Deficiency Amount, and the Lessees shall only be required to pay
to the Lenders in respect of the principal amount of the B Loans and to the
Lessor in respect of the Lessor's Invested Amounts, the proceeds of the sale of
the Leased Properties in accordance with Section 14.6 of the Lease; and (iv)
upon an Event of Default resulting in an acceleration of the Lessees' obligation
to purchase the Leased Properties under the Lease, the amounts then due and
payable by the Lessee under the Lease shall include all amounts necessary to pay
in full the Loans, and accrued interest thereon, the Lessor's Invested Amounts
and accrued Yield thereon and all other obligations of the Lessees owing to the
Funding Parties pursuant to the Operative Documents.
8
ARTICLE III
CONDITIONS PRECEDENT; DOCUMENTS
SECTION 3.1 Conditions to the Obligations of the Funding Parties on the
-----------------------------------------------------------
Closing Date. The obligations of the Lessor and each Lender to carry out their
------------
respective obligations under Section 2 of this Master Agreement to be performed
---------
on the Closing Date with respect to any Leased Property shall be subject to the
fulfillment to the satisfaction of, or waiver by, each such party hereto (acting
directly or through its counsel) on or prior to such Closing Date of the
following conditions precedent, provided that the obligations of any Funding
--------
Party shall not be subject to any conditions contained in this Section 3.1 which
-----------
are required to be performed by such Funding Party:
(a) Documents. The following documents shall have been executed and
---------
delivered by the respective parties thereto:
(i) Deed and Purchase Agreement. The related original Deed duly
---------------------------
executed by the applicable Seller and in recordable form, and copies
of the related Purchase Agreement, assigned to the Lessor, shall each
have been delivered to the Agent by ▇▇▇▇ Furniture, with copies
thereof to each other Funding Party with copies thereof to each other
Funding Party, as applicable (it being understood, that each Purchase
-- ----- ----------
Agreement shall be satisfactory in form and substance to the Lessor
and the Lenders).
(ii) Lease Supplement. The original of the related Lease
----------------
Supplement, duly executed by the related Lessee and the Lessor and in
recordable form, shall have been delivered to the Agent by such
Lessee.
(iii) Mortgage or Deed of Trust and Assignment of Lease and
-----------------------------------------------------
Rents. Counterparts of the Mortgage or Deed of Trust, as the case may
be, (substantially in the form of Exhibit D-1 or D-2, as the case may
----------- ---
be, attached hereto), duly executed by the Lessor and in recordable
form, shall have been delivered to the Agent (which Mortgage or Deed
of Trust, as the case may be, shall secure all of the debt to the
Agent unless such mortgage is subject to a tax based on the amount of
indebtedness secured thereby, in which case the amount secured will be
limited to debt in an amount equal to 100% of the projected cost of
acquisition and construction of such Leased Property); and the
9
Assignment of Lease and Rents (substantially in the form of Exhibit B
---------
attached hereto) in recordable form, duly executed by the Lessor,
shall have been delivered to the Agent by the Lessor.
(iv) Security Agreement and Assignment. If Buildings are to be
---------------------------------
constructed on the Land, counterparts of the Security Agreement and
Assignment (substantially in the form of Exhibit C attached hereto),
---------
duly executed by the Construction Agent, with an acknowledgment and
consent thereto satisfactory to the Lessor and the Agent duly executed
by the related General Contractor and the related Architect, as
applicable, and complete copies of the related Construction Contract
and the related Architect's Agreement certified by the Construction
Agent, shall have been delivered to the Lessor and the Agent (it being
understood and agreed that if no related Construction Contract or
Architect's Agreement exists on such Closing Date, such delivery shall
not be a condition precedent to the Funding on such Closing Date, and
in lieu thereof the Construction Agent shall deliver complete copies
of such Security Agreement and Assignment and consents concurrently
with the Construction Agent's entering into such contracts).
(v) Survey. The related Lessee shall have delivered, or shall
------
have caused to be delivered, to the Lessor and the Agent, at such
Lessee's expense, an accurate survey certified to the Lessor and the
Agent in a form reasonably satisfactory to the Lessor and the Agent
and showing no state of facts unsatisfactory to the Lessor or the
Agent and prepared within ninety (90) days of such Closing Date (or
such other time period agreed to by the Lessor and the Agent) by a
Person reasonably satisfactory to the Lessor and the Agent. Such
survey shall (1) be acceptable to the Title Insurance Company for the
purpose of providing extended coverage to the Lessor and a lender's
comprehensive endorsement to the Agent, (2) show no encroachments on
such Land by structures owned by others, and no encroachments from any
part of such Leased Property onto any land owned by others, and (3)
disclose no state of facts reasonably objectionable to the Lessor, the
Agent or the Title Insurance Company, and be reasonably acceptable to
each such Person.
10
(vi) Title and Title Insurance. On such Closing Date, the
-------------------------
Lessor shall receive from a title insurance company acceptable to the
Lessor and the Agent an ALTA Owner's Policy of Title Insurance issued
by such title insurance company and the Agent shall receive from such
title insurance company an ALTA Mortgagee's Policy of Title Insurance
issued by such title insurance company, in each case, in the amount of
the projected cost of acquisition and construction of such Leased
Property, reasonably acceptable in form and substance to the Lessor
and the Agent, respectively (collectively, the "Title Policy"), which
------------
may be subject to mechanic's liens arising during the course of
Construction. The Title Policy shall be dated as of such Closing
Date, and, to the extent permitted under Applicable Law, shall include
such affirmative endorsements as the Lessor or the Agent shall
reasonably request.
(vii) Appraisal. Each Funding Party shall have received a
---------
report of the Appraiser (an "Appraisal"), paid for by ▇▇▇▇ Furniture
---------
or the related Lessee, which shall meet the requirements of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989,
shall be satisfactory to such Funding Party and shall state in a
manner satisfactory to such Funding Party the estimated "as vacant"
value of such Land and existing Buildings or any Building to be
constructed thereon. Such Appraisal must show that the "as vacant"
value of such Leased Property (if a Building is to be constructed on
the Land, determined as if the Building had already been completed in
accordance with the related Plans and Specifications and by excluding
from such value the amount of assessments on such Leased Property) is
at least 43% of the total cost of such Leased Property, including the
trade fixtures, equipment and personal property (excluding Lessee's
Property) utilized in connection with the Leased Property and to be
funded by the Funding Parties. In the case of Land without any
Building thereon or any Plans and Specifications for a Building on the
related Closing Date, an Appraisal meeting the foregoing requirements
need not be delivered on or prior to the Closing Date but shall be
delivered on or before the 45th day following the development of Plans
and Specifications for a Building thereon; if the "as vacant" value
shown in the Appraisal so obtained by the
11
Funding Parties fails to
meet the requirement of the preceding sentence, such failure shall
constitute an Event of Default.
(viii) Environmental Audit and related Reliance Letter. The
-----------------------------------------------
Lessor and the Agent shall have received an Environmental Audit for
such Leased Property, which shall be conducted in accordance with ASTM
standards and shall not include a recommendation for further
investigation and is otherwise satisfactory to the Lessor and the
Agent; and the firm that prepared the Environmental Audit for such
Leased Property shall have delivered to the Lessor and the Agent a
letter stating that the Lessor, the Agent and the Lenders may rely
upon such firm's Environmental Audit of such Land, it being understood
-------------------
that the Lessor's and the Agent's acceptance of any such Environmental
Audit shall not release or impair Lessee's obligations under the
Operative Documents with respect to any environmental liabilities
relating to such Leased Property. Lessor and/or Lenders shall have
the right to require an update of the Environmental Audit following
completion of development of the Leased Property, as a condition of
further Funding.
(ix) Evidence of Insurance. The Lessor and the Agent shall have
---------------------
received from the related Lessee certificates of insurance evidencing
compliance with the provisions of Article VIII of the Lease (including
the naming of the Lessor, the Agent and the Lenders as additional
insured or loss payee with respect to such insurance, as their
interests may appear), in form and substance reasonably satisfactory
to the Lessor and the Agent.
(x) Officer's Certificate. Each of the Agent and the Lessor
---------------------
shall have received an Officer's Certificate of ▇▇▇▇ Furniture stating
that, to the best of such officer's knowledge, (A) each and every
representation and warranty of ▇▇▇▇ Furniture contained in the
Operative Documents is true and correct in all material respects on
and as of such Closing Date as though made on and as of such Closing
Date, except to the extent such representations or warranties relate
solely to an earlier date, in which case such representations and
warranties were true and correct in all material respects on and as of
such earlier date;
12
(B) no Event of Default, Potential Event of Default or Construction
Force Majeure Event has occurred and is continuing; (C) each Operative
Document to which any Lessee is a party is in full force and effect
with respect to it; and (D) no event that could reasonably be expected
to have a Material Adverse Effect has occurred since May 30, 1999.
(xi) UCC Financing Statement; Recording Fees; Transfer Taxes.
-------------------------------------------------------
Each Funding Party shall have received satisfactory evidence of (i)
the execution and delivery to Agent of a UCC-1 and, if required by
applicable law, UCC-2 financing statement to be filed with the
Secretary of State of the applicable State (or other appropriate
filing office) and the county where the related Land is located,
respectively, and such other Uniform Commercial Code financing
statements as any Funding Party deems necessary or desirable in order
to perfect such Funding Party's interests and (ii) the payment of all
recording and filing fees and taxes with respect to any recordings or
filings made of the related Deed, the Lease, the related Lease
Supplement, the related Mortgage and the related Assignment of Lease
and Rents.
(xii) Opinions. An opinion of local counsel for the related
--------
Lessee qualified in the jurisdiction in which such Leased Property is
located, in a form reasonably satisfactory to Agent, shall have been
delivered and addressed to each of the Lessor, the Agent and the
Lenders. To the extent requested by the Agent, opinions supplemental
to those delivered under Section 3.2(vi) and reasonably satisfactory
---------------
to the Agent shall have been delivered and addressed to each of the
Lessor, the Agent and the Lenders.
(xiii) Officer's Certificate. The Agent shall have received an
---------------------
Officer's Certificate of the Lessor stating that, to the best of such
officer's knowledge, (A) each and every representation and warranty of
the Lessor contained in the Operative Documents is true and correct in
all material respects on and as of such Closing Date as though made on
and as of such Closing Date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all
material respects on and
13
as of such earlier date; (B) no Event of Default or Potential Event of
Default has occurred and is continuing; (C) each Operative Document to
which the Lessor is a party is in full force and effect with respect
to it; and (D) no event that could have a Material Adverse Effect has
occurred since the date of the most recent financial statements of the
Lessor delivered or required to be delivered to the Agent.
(xiv) Good Standing Certificates. The Agent shall have received
--------------------------
good standing certificates for the Lessor and the related Lessee from
the appropriate offices of the state where the related Land is
located.
(b) Litigation. No action or proceeding shall have been instituted
----------
or, to the knowledge of any Funding Party, threatened nor shall any governmental
action, suit, proceeding or investigation be instituted or threatened before any
Governmental Authority, nor shall any order, judgment or decree have been issued
or proposed to be issued by any Governmental Authority, to set aside, restrain,
enjoin or prevent the performance of this Master Agreement or any transaction
contemplated hereby or by any other Operative Document or which is reasonably
likely to materially adversely affect any Leased Property or any transaction
contemplated by the Operative Documents or which could reasonably be expected to
result in a Material Adverse Effect.
(c) Legality. In the opinion of such Funding Party or its counsel,
--------
the transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in Applicable
Law that would make it illegal for such Funding Party to participate in any of
the transactions contemplated by the Operative Documents.
(d) No Events. (i) No Event of Default, Potential Event of Default,
---------
Event of Loss or Event of Taking relating to such Leased Property shall have
occurred and be continuing, (ii) no action shall be pending or threatened by a
Governmental Authority to initiate a Condemnation or an Event of Taking, and
(iii) there shall not have occurred any event that could reasonably be expected
to have a Material Adverse Effect since May 30, 1999.
14
(e) Representations. Each representation and warranty of the parties
---------------
hereto or to any other Operative Document contained herein or in any other
Operative Document shall be true and correct in all material respects as though
made on and as of such Closing Date, except to the extent such representations
or warranties relate solely to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.
(f) Cutoff Date. No Closing Date shall occur after the Funding
-----------
Termination Date.
(g) Transaction Expenses. The related Lessee shall have paid the
--------------------
transaction costs then accrued and invoiced which the Lessees have agreed to pay
pursuant to Section 8.8 or will be paid in accordance with its terms.
-----------
SECTION 3.2 Additional Conditions for the Closing Date. The obligations of
------------------------------------------
the Lessor and each Lender to carry out their respective obligations under
Section 2 of this Master Agreement to be performed on the Closing Date shall be
---------
subject to the satisfaction of, or waiver by, each such party hereto (acting
directly or through its counsel) on or prior to the Closing Date of the
following conditions precedent in addition to those set forth in Section 3.1,
-----------
provided that the obligations of any Funding Party shall not be subject to any
--------
conditions contained in this Section 3.2 which are required to be performed by
-----------
such Funding Party:
(a) Loan Agreement; Guaranty Agreement. Counterparts of the Loan
----------------------------------
Agreement, duly executed by the Lessor, the Agent and each Lender shall have
been delivered to each of the Lessor and the Agent. An A Note and a B Note,
duly executed by the Lessor, shall have been delivered to the Agent. The
Guaranty Agreement, duly executed by each Guarantor, shall have been delivered
to the Agent.
(b) Master Agreement. Counterparts of this Master Agreement, duly
----------------
executed by the parties hereto, shall have been delivered to each of the parties
hereto.
(c) Construction Agency Agreement. Counterparts of the Construction
-----------------------------
Agency Agreement, duly executed by the parties thereto shall have been delivered
to each of the parties hereto.
(d) Lease. Counterparts of the Lease, duly executed by the Lessees
-----
party to this Master Agreement on the Closing
15
Date, and the Lessor, shall have been delivered to each Funding Party and the
original, chattel paper copy of the Lease shall have been delivered to the
Agent.
(e) Lease Supplement. The original of the Lease Supplement, duly
----------------
executed by the related Lessee and the Lessor and in recordable form, shall have
been delivered to the Agent.
(f) Obligor's Resolutions and Incumbency Certificate, etc. Each of
-----------------------------------------------------
the Agent and the Lessor shall have received (x) a certificate of the Secretary
or an Assistant Secretary of each Obligor on the Closing Date, attaching and
certifying as to (i) the Board of Directors' (or appropriate committee's)
resolution duly authorizing the execution, delivery and performance by it of
each Operative Document to which it is or will be a party, (ii) the incumbency
and signatures of persons authorized to execute and deliver such documents on
its behalf, (iii) its articles or certificate of incorporation, certified as of
a recent date by the Secretary of State of the state of its incorporation and
(iv) its by-laws, and (y) good standing certificates for such Obligor on the
Closing Date from the appropriate offices of the States of such Obligor's
incorporation and principal place of business.
(g) Opinions of Counsel. The opinion of Silver, ▇▇▇▇▇▇▇▇ & ▇▇▇▇,
-------------------
L.L.P., dated as of the Closing Date, substantially in the form set forth in
Exhibit G-1 attached hereto, and containing such other matters as the parties to
-----------
whom it is addressed shall reasonably request, shall have been delivered and
addressed to each of the Lessor, the Agent and the Lenders. The opinion of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Oaks ▇▇▇▇▇▇▇▇, LLP, dated as of the Closing Date,
substantially in the form set forth in Exhibit G-2 attached hereto, and
-----------
containing such other matters as the parties to whom it is addressed shall
reasonably request, shall have been delivered to each of the Agent, the Lessee
and the Lenders.
(h) Good Standing Certificate. The Agent and ▇▇▇▇ Furniture shall
-------------------------
have received a good standing certificate for the Lessor from the appropriate
office of the State of Texas.
(i) Lessor's Consents and Incumbency Certificate, etc. The Agent and
-------------------------------------------------
▇▇▇▇ Furniture shall have received a certificate of the Secretary or an
Assistant Secretary of the General Partner of the Lessor attaching and
certifying as to (i) the consents of the partners of the Lessor duly authorizing
the execution, delivery and performance by it of each Operative Document to
which it is
16
or will be a party, (ii) the incumbency and signatures of persons authorized to
execute and deliver such documents on its behalf, and (iii) the Partnership
Agreement.
(j) Funding Request. The Lessor and the Agent shall have received
---------------
from the Construction Agent or a Lessee the Funding Request therefor pursuant to
Section 2.2(d).
SECTION 3.3 Conditions to the Obligations of Lessee. The obligations of
---------------------------------------
any Lessee to lease a Leased Property from the Lessor are subject to the
fulfillment on the Closing Date to the satisfaction of, or waiver by, such
Lessee, of the following conditions precedent:
(a) General Conditions. The conditions set forth in Sections 3.1 and
------------------ ------------
3.2 that require fulfillment by the Lessor, the Agent or the Lenders shall have
---
been satisfied, including the delivery of good standing certificates by the
Lessor pursuant to Sections 3.1(a)(xiv) and 3.2(vii) and the delivery of an
-------------------- --------
opinion of counsel for the Lessor pursuant to Section 3.2(vi) and the execution
---------------
and delivery of the Operative Documents to be executed by the Lessor, the Agent
or the Lenders in connection with such Leased Property.
(b) Legality. In the opinion of such Lessee or its counsel, the
--------
transactions contemplated by the Operative Documents shall not violate any
Applicable Law, and no change shall have occurred or been proposed in Applicable
Law that would make it illegal for such Lessee to participate in any of the
transactions contemplated by the Operative Documents.
(c) Purchase Agreement. The Purchase Agreement and all documents to
------------------
be delivered under the Purchase Agreement, including title insurance, survey and
environmental audit, shall be reasonably satisfactory to such Lessee.
SECTION 3.4 Conditions to the Obligations of the Funding Parties on each
------------------------------------------------------------
Funding Date. The obligations of the Lessor and each Lender to carry out their
------------
respective obligations under Section 2 of this Master Agreement to be performed
---------
on each Funding Date shall be subject to the fulfillment to the satisfaction of,
or waiver by, each such party hereto (acting directly or through their
respective counsel) on or prior to each such Funding Date of the following
conditions precedent, provided that the obligations of any Funding Party shall
--------
not be subject to any conditions contained in this Section 3.4 which are
-----------
required to be performed by such Funding Party:
17
(a) Funding Request. The Lessor and the Agent shall have received
---------------
from the Construction Agent or a Lessee the Funding Request therefor pursuant to
Section 2.2(d).
--------------
(b) Condition Fulfilled. As of such Funding Date, the condition set
-------------------
forth in Section 3.1(d)(i) shall have been satisfied.
-----------------
(c) Representations. As of such Funding Date, both before and after
---------------
giving effect to the Funding requested by the Construction Agent or a Lessee on
such date, the representations and warranties that the Construction Agent or any
Obligor is deemed to make pursuant to Section 2.2(e) shall be true and correct
--------------
in all material respects on and as of such Funding Date as though made on and as
of such Funding Date, except to the extent such representations or warranties
relate solely to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects on and as
of such earlier date.
(d) No Bonded Stop Notice or Filed Mechanics Lien. As of such Funding
---------------------------------------------
Date, and as to any Funded Amount requested for any Leased Property on such
Funding Date, (i) none of the Lessor, the Agent or any Lender has received (with
respect to such Leased Property) a bonded notice to withhold Loan funds that has
not been discharged by the related Lessee or the Construction Agent, and (ii) no
mechanic's liens or materialman's liens have been filed against such Leased
Property that have not been discharged by the related Lessee, bonded over in a
manner reasonably satisfactory to the Agent or insured over by the Title
Insurance Company.
(e) Paydown of Revolver. The Agent shall have received from the
-------------------
Lessee a deposit in an amount equal to fifty percent (50%) of the amount of the
Funding requested as payment of principal borrowed under the Revolver pursuant
to Section 2(b) of the Agreement as to Synthetic Lease Fundings, dated as of
August 27, 1999, by and between the Lessee, the Guarantors, the Agent and Bank
of America, N.A., a national banking association d/b/a Nationsbank, N.A.
SECTION 3.5 Completion Date Conditions. The occurrence of the Completion
--------------------------
Date with respect to any Leased Property shall be subject to the fulfillment to
the satisfaction of, or waiver by, each party hereto (acting directly or through
its counsel) of the following conditions precedent:
18
(a) Title Policy Endorsements; Architect's Certificate. The
--------------------------------------------------
Construction Agent shall have furnished to each Funding Party (1) the following
endorsements to the related Title Policy (each of which shall be subject to no
exceptions other than those reasonably acceptable to the Agent): a date-down
endorsement (redating and confirming the coverage provided under the Title
Policy and each endorsement thereto) and a "Form 9" endorsement (if available in
the applicable jurisdiction), in each case, effective as of a date not earlier
than the date of completion of the Construction, and (2) a certificate of the
Architect dated at or about the Completion Date, in form and substance
reasonably satisfactory to the Agent, the Lessor and the Lenders, and stating
that (i) the related Building has been completed substantially in accordance
with the Plans and Specifications therefor, and such Leased Property is ready
for occupancy, (ii) such Plans and Specifications comply in all material
respects with all Applicable Laws in effect at such time, and (iii) to the best
of the Architect's knowledge, such Leased Property, as so completed, complies in
all material respects with all Applicable Laws in effect at such time. The
Construction Agent shall also deliver to the Agent true and complete copies of:
(A) an "as built" or "record" set of the Plans and Specifications, (B) a plat of
survey of such Leased Property "as built" to a standard reasonably acceptable to
the Agent showing all easements, paving, driveways, fences and exterior
improvements, and (C) copies of a certificate or certificates of occupancy for
such Leased Property or other legally equivalent permission to occupy such
Leased Property.
(b) Construction Completion. Any related Construction shall have been
-----------------------
completed substantially in accordance with the related Plans and Specifications,
the related Deed and all Applicable Laws, and such Leased Property shall be
ready for occupancy and operation. All fixtures, equipment and other property
which are owned by Lessor and paid for by Fundings hereunder and which were
contemplated under the Plans and Specifications to be incorporated into or
installed in such Leased Property shall have been substantially incorporated or
installed, free and clear of all Liens except for Permitted Encumbrances.
(c) Construction Agent Certification. The Construction Agent shall
--------------------------------
have furnished the Lessor, the Agent and each Lender with a certification of the
Construction Agent (substantially in the form of Exhibit H) that:
---------
19
(i) all amounts owing to third parties for the related
Construction have been paid in full (other than contingent obligations for
which the Construction Agent has made adequate reserves or obligations to
be paid from the final Funding), and no litigation or proceedings are
pending, or to the best of the Construction Agent's knowledge, are
threatened, against such Leased Property or the Construction Agent or the
related Lessee which could reasonably be expected to have a Material
Adverse Effect;
(ii) all material consents, licenses and permits and other
governmental authorizations or approvals required for such Construction and
operation of such Leased Property have been obtained and are in full force
and effect;
(iii) such Leased Property has available all services of public
facilities and other utilities necessary for the related Lessee's use and
operation of such Leased Property for its intended purposes including,
without limitation, adequate water, gas and electrical supply, storm and
sanitary sewerage facilities, telephone, other required public utilities
and means of access between the related Building and public highways for
pedestrians and motor vehicles;
(iv) all agreements, easements and other rights, public or
private, which are necessary to permit the lawful use and operation of such
Leased Property as the related Lessee intends to use such Leased Property
under the Lease and which are necessary to permit the lawful intended use
and operation by the related Lessee of all then intended utilities,
driveways, roads and other means of egress and ingress to and from the same
have been obtained and are in full force and effect and neither the
Construction Agent nor the related Lessee has any knowledge of any pending
modification or cancellation of any of the same that would result in a
Material Adverse Effect; and the use of such Leased Property by the related
Lessee does not depend on any variance, special exception or other
municipal approval, permit or consent that has not been obtained and is in
full force and effect for its continuing legal use;
(v) all of the requirements and conditions set forth in Section
-------
3.5(b) hereof have been completed and fulfilled with respect to such Leased
------
Property and the related Construction; and
20
(vi) to the best of the Construction Agent's knowledge, such
Leased Property is in compliance in all material respects with all
applicable zoning laws and regulations.
SECTION 3.6 Addition of Lessees. After the date hereof, additional
-------------------
Subsidiaries of ▇▇▇▇ Companies may become Lessees hereunder and under the other
Operative Documents upon satisfaction of the following conditions precedent:
(a) such Subsidiary and the Guarantor shall have executed and
delivered to the Agent and the Lessor a Joinder Agreement, substantially in
the form of Exhibit J;
---------
(b) such Subsidiary shall have delivered to each of the Agent and the
Lessor (x) a certificate of the Secretary or an Assistant Secretary of such
Subsidiary, attaching and certifying as to (i) the Board of Directors'
resolution duly authorizing the execution, delivery and performance by it
of each Operative Document to which it is or will be a party, (ii) the
incumbency and signatures of persons authorized to execute and deliver such
documents on its behalf, (iii) its certificate of incorporation, certified
as of a recent date by the Secretary of State of its incorporation and (iv)
its by-laws, and (y) good standing certificates from the appropriate
offices of the States of such Subsidiary's incorporation and principal
place of business;
(c) such Subsidiary shall have delivered an opinion of Silver,
▇▇▇▇▇▇▇▇ & Taff, L.L.P., addressed to each of the Lessor, the Agent and the
Lenders, substantially in the form set forth in Exhibit G-1; and
-----------
(d) the Agent, the Lessor and the Lenders shall have received such
other documents, certificates and information as any of them shall have
reasonably requested.
ARTICLE IV.
REPRESENTATIONS
SECTION 4.1 Representations of Obligors. Effective as of the date of
---------------------------
execution hereof, as of the Closing Date and as of each Funding Date, each
Obligor represents and warrants to each of the other parties hereto as follows:
21
(a) Financial Condition. The consolidated balance sheets of ▇▇▇▇
-------------------
Companies and its Subsidiaries as at November 29, 1998 and May 30, 1999 and the
related consolidated statements of income, stockholder's equity and cash flows
for the fiscal year ended on each such date, reported on (in the case of the
November 29, 1998 balance sheet and statements) by BDO ▇▇▇▇▇▇▇, LLP, copies of
which have heretofore been furnished to each Funding Party, are complete and
correct in all material respects and present fairly the consolidated financial
condition of the Lessees and ▇▇▇▇ Companies as at such dates, and the
consolidated results of their operations and their consolidated cash flows for
the fiscal year then ended. All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by such
accountants and as disclosed therein). To the best knowledge of any Lessee or
▇▇▇▇ Companies, there are no material liabilities, direct or indirect, fixed or
contingent, of any such Lessee or ▇▇▇▇ Companies, as of the date hereof, that
are not reflected in the above financial statements, other than those incurred
in the ordinary course of business since May 30, 1999, or which have been
reflected in a Form 8-K filing with the SEC.
(b) No Change. To the best knowledge of any Lessee or ▇▇▇▇ Companies,
---------
there has been no material adverse change in the financial condition or
operations of any such Lessee or ▇▇▇▇ Companies since May 30, 1999, except as
disclosed in writing to the Agent and except as reflected in Form 8-K filings
with the SEC, provided however, that the foregoing representation is made solely
as of the Closing Date.
(c) Corporate Existence; Compliance with Law. Each Obligor and each
----------------------------------------
of ▇▇▇▇ Companies' Significant Subsidiaries (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, except to the extent that, in the aggregate, the failure of any
such Subsidiaries to be duly organized, validly existing or in good standing
would not have a Material Adverse Effect, (b) has the corporate power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged, except to the extent that, in the aggregate, the failure of
any such Subsidiaries to have any such power, authority or legal right would not
have a Material Adverse Effect, (c) is duly qualified and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except
22
to the extent that, in the aggregate, the failure to so qualify or be in good
standing would not have a Material Adverse Effect, and (d) is, to the best of
its knowledge, in compliance with all Requirements of Law except to the extent
that, in the aggregate, the failure to comply therewith would not have a
Material Adverse Effect.
(d) Corporate Power; Authorization; Enforceable Obligations. Each
-------------------------------------------------------
Obligor has the corporate power and authority, and the legal right, to make,
deliver and perform this Master Agreement and the other Operative Documents to
which it is a party and has taken all necessary corporate action to authorize
the Transaction on the terms and conditions of this Master Agreement and to
authorize the execution, delivery and performance of this Master Agreement and
the other Operative Documents to which it is a party. No consent or
authorization of, filing with or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the Transaction or
with the execution, delivery, performance, validity or enforceability of this
Master Agreement or the other Operative Documents to which it is a party. This
Master Agreement has been, and each other Operative Document to which it is a
party will be, duly executed and delivered on behalf of each Obligor. This
Master Agreement constitutes, and each other Operative Documents to which it is
a party when executed and delivered will constitute, a legal, valid and binding
obligation of each Obligor enforceable against such Obligor in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
(e) No Legal Bar. The execution, delivery and performance of this
------------
Master Agreement and the other Operative Documents to which it is a party, the
Transaction and the use of the proceeds thereof will not, to the best of such
Obligor's knowledge, violate any Requirement of Law or Contractual Obligation of
▇▇▇▇ Companies or of any of its Subsidiaries and will not result in, or require,
the creation or imposition of any Lien on any of its or their respective
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation, other than the Operative Documents and other than any Permitted
Encumbrances with respect to Leased Properties.
23
(f) No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of any Obligor, threatened by or against any Obligor or any of
their Subsidiaries or against any of its or their respective properties or
revenues which would have a Material Adverse Effect.
(g) No Default. No Potential Event of Default or Event of Default
----------
has occurred and is continuing.
(h) Taxes. All tax returns now required to be filed by the Obligors
-----
have been filed (or appropriate extensions of such filings have been obtained)
and all taxes, assessments and other governmental charges (other than those
presently payable without penalty or interest and those being contested in good
faith by appropriate proceedings due from the Obligors have been paid. The
Obligors have established on their books reserves adequate for the payment of
all federal, state and other tax liabilities.
(i) Federal Regulations. No part of the proceeds of any Funding will
-------------------
be used for "purchasing" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System as now and from time to time
hereafter in effect if such use would violate, or cause the Fundings or the
Commitments to be in violation of, the provisions of the Regulations of such
Board of Governors. If requested by any Funding Party or the Agent at any time,
each Obligor will furnish to the Agent and each Funding Party a statement to the
foregoing effect in conformity with the requirements of FR Form U-1 referred to
in said Regulation U.
(j) ERISA. To the best of such Obligors' knowledge, each Plan is in
-----
compliance in all material respects with all applicable provisions of ERISA and
the Code, and no liability or obligation has been incurred with respect to any
Plan pursuant to Title IV of ERISA. No Prohibited Transaction has occurred or
exists in connection with any Plan. Neither the Obligors nor any ERISA
Affiliate is now or will be at any time from the Closing Date through the Lease
Term a sponsor or contributing employer of (1) any plan which is subject to the
minimum funding requirements under Section 412 of the Code or Section 302 of
ERISA, (2) any "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, or (3) any "multiemployer plan," as defined in Section 4001(a)(3) of
ERISA.
24
(k) Investment Company Act; Other Regulations. None of the Obligors
-----------------------------------------
is subject to registration as an "investment company" or is "controlled" by such
a company, within the meaning of the Investment Company Act of 1940, as amended.
(l) Purpose of Fundings. The proceeds of the Fundings shall be used
-------------------
by the related Lessee or the Construction Agent to purchase the Land from the
applicable Seller and for Construction costs, including hard and soft costs,
plans and specifications, attorney fees, costs associated with development and
construction of the Building and any trade fixtures or equipment purchased for
use on or in connection with the Leased Property with Funding provided by the
Funding Parties.
(m) Disclosure. This Master Agreement, taken as a whole, does not
----------
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein in light of the
circumstances in which they were made, not materially misleading.
(n) Hazardous Materials - Leased Properties.
---------------------------------------
(i) To the best knowledge of the related Lessee, except as
described in the related Environmental Audit, on the Closing Date for each
Leased Property, there are no Hazardous Materials present at, upon, under
or within such Leased Property or released or transported to or from such
Leased Property (except in compliance in all material respects with all
Applicable Law).
(ii) To the best knowledge of the related Lessee, on the related
Closing Date, no Governmental Actions have been taken or, to the best
knowledge of the related Lessee, are in process or have been threatened,
which could reasonably be expected to subject such Leased Property, any
Lender or the Lessor to any Claims or Liens with respect to such Leased
Property under any Environmental Law which would have a Material Adverse
Effect, or would have a material adverse effect on the Lessor or any
Lender.
(iii) The related Lessee has obtained, or will obtain on or
before the date required by Applicable Law, all Environmental Permits to
the extent required by Applicable Law to operate each Leased Property, if
any, in accordance with Environmental Laws and is complying with and has at
all times complied with all such Environmental Permits, except to the
extent the failure to obtain such Environmental
25
Permits or to so comply would not have a Material Adverse Effect.
(iv) To the best knowledge of the related Lessee, except as set
forth in the related Environmental Audit or in any notice subsequently
furnished by the related Lessee to the Agent and approved by the Agent in
writing prior to the respective times that the representations and
warranties contained herein are made or deemed made hereunder, no notice,
notification, demand, request for information, citations, summons,
complaint or order has been issued or filed to or with respect to the
related Lessee, no penalty has been assessed on the related Lessee and no
investigation or review is pending or threatened by any Governmental
Authority or other Person in each case relating to any Leased Property with
respect to any alleged material violation or liability of the related
Lessee under any Environmental Law. To the best knowledge of the related
Lessee, no material notice, notification, demand, request for information,
citations, summons, complaint or order has been issued or filed to or with
respect to any other Person, no material penalty has been assessed on any
other Person and no investigation or review is pending or threatened by any
Governmental Authority or other Person relating to any Leased Property with
respect to any alleged material violation or liability under any
Environmental Law by any other Person.
(v) To the best knowledge of the related Lessee, each Leased
Property and each portion thereof are presently in compliance in all
material respects with all Environmental Laws, and, to the best knowledge
of the related Lessee, there are no present or past facts, circumstances,
activities, events, conditions or occurrences regarding such Leased
Property (including without limitation the release or presence of Hazardous
Materials) that could reasonably be anticipated to (A) form the basis of a
material Claim against such Leased Property, any Funding Party or the
related Lessee, (B) cause such Leased Property to be subject to any
material restrictions on ownership, occupancy, use or transferability under
any Environmental Law, (C) require the filing or recording of any notice or
restriction relating to the presence of Hazardous Materials in the real
estate records in the county or other appropriate municipality in which
such Leased Property is located, or (D) prevent or materially interfere
with the
26
continued operation and maintenance of such Leased Property as contemplated
by the Operative Documents.
(o) Leased Property. To the best knowledge of the related Lessee, the
---------------
present condition of each Leased Property conforms in all material respects with
all conditions or requirements of all existing material permits and approvals
issued with respect to such Leased Property, and the related Lessee's future
intended use of such Leased Property under the Lease does not, in any material
respect, violate any Applicable Law. To the best knowledge of the related
Lessee, no material notices, complaints or orders of violation or non-compliance
have been issued or threatened or contemplated by any Governmental Authority
with respect to any Leased Property or any present or intended future use
thereof. All material agreements, easements and other rights, public or
private, which are necessary to permit the lawful use and operation of each
Leased Property as the related Lessee intends to use such Leased Property under
the Lease and which are necessary to permit the lawful intended use and
operation of all presently intended utilities, driveways, roads and other means
of egress and ingress to and from the same have been, or to the related Lessee's
best knowledge will be, obtained and are or will be in full force and effect,
and the related Lessee has no knowledge of any pending material modification or
cancellation of any of the same.
SECTION 4.2 Survival of Representations and Effect of Fundings.
--------------------------------------------------
(a) Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made in Section 4.1 shall survive delivery of the Operative
-----------
Documents and every Funding, and shall remain in effect until all of the
Obligations are fully and irrevocably paid.
(b) Each Funding a Representation. Each Funding accepted by a Lessee
-----------------------------
or the Construction Agent shall be deemed to constitute a representation and
warranty by each Obligor to the effect of Section 4.1.
-----------
SECTION 4.3 Representations of the Lessor. Effective as of the date of
-----------------------------
execution hereof, as of the Closing Date and as of each Funding Date, in each
case, with respect to each of the Leased Properties, the Lessor represents and
warrants to the Agent, the Lenders, the Lessees, ▇▇▇▇ Companies and the
Guarantors, as follows:
27
(a) Securities Act. The interest being acquired or to be acquired by
--------------
the Lessor in such Leased Property is being acquired for its own account,
without any view to the distribution thereof or any interest therein, provided
--------
that the Lessor shall be entitled to assign, convey or transfer its interest in
accordance with Section 6.1.
-----------
(b) Due Organization, etc. The Lessor is a limited partnership duly
---------------------
organized and validly existing in good standing under the laws of Texas and each
state in which a Leased Property is located and has full power, authority and
legal right to execute, deliver and perform its obligations under the Lease,
this Master Agreement and each other Operative Document to which it is or will
be a party.
(c) Due Authorization; Enforceability, etc. This Master Agreement and
--------------------------------------
each other Operative Document to which the Lessor is or will be a party have
been or will be duly authorized, executed and delivered by or on behalf of the
Lessor and are, or upon execution and delivery will be, legal, valid and binding
obligations of the Lessor enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights generally
and by general equitable principles.
(d) No Conflict. The execution and delivery by the Lessor of the
-----------
Lease, this Master Agreement and each other Operative Document to which the
Lessor is or will be a party, are not or will not be, and the performance by the
Lessor of its obligations under each will not be, inconsistent with its
Partnership Agreement, do not and will not contravene any Applicable Law
applicable generally to parties providing financing and do not and will not
contravene any provision of, or constitute a default under, any Contractual
Obligation of Lessor, do not and will not require the consent or approval of,
the giving of notice to, the registration with or taking of any action in
respect of or by, any Governmental Authority applicable generally to parties
providing financing, except such as have been obtained, given or accomplished,
and the Lessor possesses all requisite regulatory authority to undertake and
perform its obligations under the Operative Documents.
(e) Litigation. There are no pending or, to the knowledge of the
----------
Lessor, threatened actions or proceedings against the Lessor before any court,
arbitrator or administrative agency with respect to any Operative Document or
that would have
28
a material adverse effect upon the ability of the Lessor to perform its
obligations under this Master Agreement or any other Operative Documents to
which it is or will be a party.
(f) Lessor Liens. No Lessor Liens (other than those created by the
------------
Operative Documents) exist on any Closing Date on the Leased Property, or any
portion thereof, and the execution, delivery and performance by the Lessor of
this Master Agreement or any other Operative Document to which it is or will be
a party will not subject any Leased Property, or any portion thereof, to any
Lessor Liens (other than those created by the Operative Documents).
(g) Employee Benefit Plans. The Lessor is not and will not be making
----------------------
its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
(h) General Partner. The sole general partner of the Lessor is
---------------
Atlantic Financial Managers, Inc.
(i) Financial Information. (A) The unaudited balance sheet of the
---------------------
Lessor as of December 31, 1998 and the related statements of income, partners'
capital and cash flows for the year then ended, copies of which have been
delivered to the Agent and ▇▇▇▇ Companies, fairly present, in conformity with
sound accounting principles, the financial condition of the Lessor as of such
date and the results of operations and cash flows for such period.
(B) Since December 31, 1998, there has been no event, act, condition
or occurrence having a material adverse effect upon the financial condition,
operations, performance or properties of the Lessor, or the ability of the
Lessor to perform in any material respect its obligations under the Operative
Documents.
(C) The Lessor has no recourse indebtedness, and the Lessor has not
entered into any other transactions, purchases, leases or other agreements,
other than immaterial transactions, purchases, leases and other agreements
entered into by the Lessor in the ordinary course of its business, in which the
Lessor has any liability to the other parties to such transactions, purchases,
leases or other agreements that is in excess of the Lessor's ownership or other
interest in the property subject to
29
such transactions, purchases, leases or other agreements other than liability
for required fundings, breach of contract, misrepresentation, gross negligence,
willful misconduct, fraud, failure to turn over funds and similar exceptions to
limitations on recourse.
(j) No Offering. The Lessor has not offered the Notes to any Person
-----------
in any manner that would subject the issuance thereof to registration under the
Securities Act or any applicable state securities laws.
SECTION 4.4 Representations of each Lender. Effective as of the date of
------------------------------
execution hereof, as of the Closing Date and as of each Funding Date, each
Lender represents and warrants to the Lessor and to the Lessees as follows:
(a) Securities Act. The interest being acquired or to be acquired by
--------------
such Lender in the Funded Amounts is being acquired for its own account, without
any view to the distribution thereof or any interest therein, provided that such
--------
Lender shall be entitled to assign, convey or transfer its interest in
accordance with Section 6.2.
-----------
(b) Employee Benefit Plans. Such Lender is not and will not be making
----------------------
its investment hereunder, and is not performing its obligations under the
Operative Documents, with the assets of an "employee benefit plan" (as defined
in Section 3(3) of ERISA) which is subject to Title I of ERISA, or "plan" (as
defined in Section 4975(e)(1)) of the Code.
ARTICLE V.
COVENANTS OF OBLIGORS AND THE LESSOR
SECTION 5.1 Affirmative Covenants. Each Obligor covenants and agrees
---------------------
that, it shall do, or cause to be done, the following:
(a) Financial Statements. Furnish to each Funding Party:
--------------------
(i) as soon as available, but in any event within 90 days after
the end of each fiscal year of each Obligor, a copy of the
consolidated balance sheet of ▇▇▇▇ Companies and its consolidated
Subsidiaries as at the end of such year and the related consolidated
statements of income and retained earnings and of cash flows for such
year, setting forth in each case in
30
comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or
qualification arising out of the scope of the audit, by BDO ▇▇▇▇▇▇▇,
LLP, by a "Big 5" accounting firm, or by another nationally recognized
accounting firm designated by ▇▇▇▇ Companies and reasonably acceptable
to the Required Funding Parties. Alternatively, such Obligor may
furnish its annual report on Form 10-K filed with the SEC if such
annual report contains financial statements that satisfy the
requirements set forth above; and
(ii) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of
each fiscal year of each Obligor, the unaudited consolidated balance
sheet of ▇▇▇▇ Companies and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated statements
of income and retained earnings and of cash flows of ▇▇▇▇ Companies
and its consolidated Subsidiaries for such quarter and the portion of
the fiscal year through the end of such quarter, setting forth in each
case in comparative form the figures for the previous year, certified
by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments).
Alternatively, such Obligor may furnish its quarterly report on Form
10-Q filed with the SEC if such quarterly report contains financial
statements that satisfy the requirements set forth above;
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
(b) Certificates; Other Information. Furnish to each Funding Party:
-------------------------------
(i) concurrently with the delivery of the financial statements
referred to in Section 5.1(a)(i), a certificate of the independent certified
-----------------
public accountants reporting on such financial statements stating that in making
the examination necessary therefor no knowledge was obtained of any
31
Potential Event of Default or Event of Default, except as specified in such
certificate;
(ii) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a)(i) and (ii), a certificate of a Responsible
------------------ ----
Officer stating that such officer has obtained no knowledge of any Potential
Event of Default or Event of Default that has occurred and is continuing except
as specified in such certificate, and including calculations demonstrating
compliance with Section 5.2;
-----------
(iii) within five Business Days after the same are sent, copies of
all regular and periodic reports which ▇▇▇▇ Companies sends to its stockholders
generally, and within five Business Days after the same are filed, copies of all
regular and periodic reports which ▇▇▇▇ Companies may make to, or file with, the
SEC or any successor or analogous Governmental Authority; and
(iv) promptly, such additional financial and other information as any
Funding Party may from time to time reasonably request.
(c) Conduct of Business and Maintenance of Existence. Continue to
------------------------------------------------
engage in business of substantially the same general type as now conducted by
it, taken as a whole, and preserve, renew and, with respect to ▇▇▇▇ Companies
and ▇▇▇▇ Furniture only, keep in full force and effect its corporate existence
and take such reasonable action to maintain all rights, privileges and
franchises necessary or desirable in the normal conduct of its business except
as otherwise permitted pursuant to Section 5.2(e); comply with all Contractual
--------------
Obligations and Requirements of Law except to the extent that failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect.
(d) Inspection of Property; Books, Records and Discussions.
------------------------------------------------------
(i) Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall
be made of all dealings and transactions in relation to its business and
activities.
(ii) Permit representatives of Funding Parties to visit it any of its
properties and have access to any of its financial books and records at
reasonable times during normal business hours and to make inspections
thereof and
32
such excerpts from such records as such representatives deem
necessary.
(e) Notices. Give notice to the Agent and each Funding Party within
-------
10 days after ▇▇▇▇ Companies knows or has reason to know thereof of (i) any
Potential Event of Default or Event of Default or (ii) any change order over
$100,000 under any Construction Contract.
(f) Taxes. Duly pay and discharge all taxes, assessments and
-----
governmental charges upon it or against its properties prior to the date on
which penalties attach unless and to the extent only that such taxes,
assessments and governmental charges shall be contested in good faith and by
appropriate proceedings by the Lessee or each Guarantor, as the case may be, and
the Lessee or each Guarantor, as the case may be, shall have set aside on its
books such reserves as are required by GAAP with respect to any such tax,
assessment or charge so contested.
(g) Maintenance of Property. Maintain all of its Properties and
-----------------------
assets in good condition, repair and working order, ordinary wear and tear
excepted.
(h) Insurance. Continuously maintain or cause to be maintained
---------
insurance with responsible carriers, or through self-insurance, against such
risks as are customarily insured against and in such amounts as are customarily
carried by entities similar to such Obligor, paying or causing to be paid as the
same become due all premiums in respect thereto, as applicable.
(i) Environmental Matters.
---------------------
(i) Conduct the Lessee's business operations in full compliance
with Environmental Laws and refrain from, and prevent any other party from,
using any Hazardous Materials on or in connections with the Properties
except such material as are incidental to the Lessee's normal course of
business, maintenance and repairs. Notwithstanding the foregoing, the
Lessee's or ▇▇▇▇ Companies' failure to comply with the foregoing provision
shall not constitute an Event of Default unless such failure causes a
Material Adverse Effect.
(ii) Immediately notify the Agent in writing of (A) any and all
enforcement, clean-up, remedial, removal, or other governmental or
regulatory actions instituted, completed or threatened pursuant to any
Environmental Law
33
affecting or pertaining to the Properties or the Lessee's business
operations, (B) all claims made or threatened by any third party against
the Lessee relating to damages, contribution, cost recovery compensation,
loss or injury resulting from any Hazardous Materials; and (C) any remedial
action taken by the Lessee with respect to the Properties or the Lessee's
business operations.
(j) Year 2000 Compliance. Take all action necessary to insure that
--------------------
all material date affected technology used in the Lessee's business operations
is able to correctly and effectively process date data form, into and between
the twentieth and twenty-first centuries.
(k) Financial Positions. At the end of ▇▇▇▇ Companies' fiscal
-------------------
quarters, tested on a rolling fiscal four quarter basis (unless otherwise
indicated), ▇▇▇▇ Companies will have and maintain the following financial
positions all as defined or determined in accordance with GAAP.
(i) Maximum Funded Debt to Cash Flow. Have and maintain a
--------------------------------
consolidated maximum Funded Debt to Cash Flow Ratio (based on the four
previous consecutive quarters at the effective date of determination) of
not more than 2.75 to 1.0 at each testing time.
(ii) Maximum Funded Debt to Total Capitalization. Have and
-------------------------------------------
maintain a consolidated maximum Funded Debt to Total Capitalization ratio
of not more than the following:
Ratio As of
----- -----
.60 to 1.00 as of the end of each fiscal quarter to and
including the end of the fiscal quarter ending
on or about August 31, 2000.
.55 to 1.00 as of the end of the fiscal quarter ending on
or about November 30, 2000, to and including
the end of the fiscal quarter ending on or
about August 31, 2001.
.50 to 1.00 from and after August 31, 2001.
34
(ii) Minimum Interest Coverage. Have and maintain a consolidated
-------------------------
Minimum Interest Coverage Ratio (based on the four previous consecutive
quarters at the effective date of determination) at least equal to 5.00 to
1.00 at each testing time.
(l) Qualified Swap Agreement. ▇▇▇▇ Companies or ▇▇▇▇ Furniture (as
------------------------
agreed between Lessee and Agent) shall enter into a Qualified Swap Agreement by
November 30, 2000 and, thereafter, have and maintain a Qualified Swap Agreement
during the Base Term and, if the Base Term is renewed pursuant to Section 14.9
of the Lease, then during the balance of the Lease Term.
(m) Most Favored Lender Status. If ▇▇▇▇ Companies enters into a
--------------------------
subsequent financing where it grants to the lender more favorable covenants
(from the standpoint of the lender) or additional covenants (whether affirmative
covenants or negative covenants), except those respecting Permitted Encumbrances
both as defined in Appendix A and as defined in the Revolver, not granted under
this Master Agreement, then ▇▇▇▇ Companies shall notify Agent of such and, upon
request of Agent, shall execute an amendment to include such covenants in
Section 5.1 or Section 5.2, as applicable.
SECTION 5.2 Negative Covenants.
------------------
Each Obligor covenants and agrees that, so long as any of the Commitments
remain in effect or any Obligation is owing to the Funding Parties by any
Lessee, each Obligor will not, directly or indirectly, without the prior written
permission of Agent as directed by the Required Funding Parties:
(a) Negative Pledge. Without the prior express written consent of the
---------------
Agent, given or withheld in the Agent's sole discretion, create, assume, or
suffer to exist, any mortgage, deed of trust, pledge, lien, security interest,
assignment, deposit arrangement or other preferential arrangement, charge or
encumbrance (including without limitation any conditional sale, or other title
retention agreement or finance lease) of any nature, upon or with respect to any
of the Properties, now owned or hereafter acquired, or sign or file under the
Uniform Commercial Code of any jurisdiction a financing statement which names
any Obligor as a debtor, or sign any security agreement authorizing any secured
party thereunder to file such financing statement, except for Permitted
Encumbrances (as defined in Appendix A and as defined in the Revolver). Except
as provided in this section, it is not intended that the
35
Operative Documents prohibit any Lien other than against the Leased Property
(subject to Permitted Encumbrances).
(b) Notice of Merger, Consolidation, Disposition of Assets. In the
------------------------------------------------------
event that any Obligor shall (i) merge or consolidate with any Person or (ii)
sell, assign, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) assets with an aggregate value greater than $1 million
to any Person, except with respect to inventory in the ordinary course of
business, then within ten (10) days of any of the foregoing, such Obligor shall
(1) forward to the Agent written notice of such transaction, specifying the
details thereof, and (2) forward a certificate of the chief financial officer of
such Obligor setting forth a reasonably detailed calculation of the financial
position of such Obligor subsequent to any such transaction and certifying that
consummation of such transaction has not and will not cause an Event of Default.
(c) Contingent Liabilities. Except as otherwise provided in the
----------------------
Operative Documents, assume, guarantee, endorse or otherwise become surety for
or upon the obligation of any Person, except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business.
SECTION 5.3 Further Assurances. Upon the written request of the Lessor
------------------
or the Agent, each Lessee, at its own cost and expense, will cause all financing
statements (including precautionary financing statements), fixture filings and
other similar documents, to be recorded or filed at such places and times in
such manner, as may be necessary to preserve, protect and perfect the interest
of the Lessor, the Agent and the Lenders in the Leased Properties as
contemplated by the Operative Documents.
SECTION 5.4 Additional Required Appraisals. If, as a result of any
------------------------------
change in Applicable Law after the date hereof, an appraisal of all or any of
the Leased Properties is required during the Lease Term under Applicable Law
with respect to any Funding Party's interest therein, such Funding Party's
Funded Amount with respect thereto or the Operative Documents, then the related
Lessee shall pay the reasonable cost of such appraisal.
SECTION 5.5 Lessor's Covenants. The Lessor covenants and agrees that,
------------------
unless the Agent, ▇▇▇▇ Furniture, and the Lenders shall have otherwise consented
in writing:
(a) the proceeds of the Loans received from the
36
Lenders will be used by the Lessor solely to acquire the related Leased Property
and to pay the Construction Agent or the related Lessee for certain closing,
development and transaction costs associated therewith and, for the costs of
Construction, including hard and soft costs, Plans and Specifications, attorney
fees, costs associated with construction of the Building and any fixtures or
equipment purchased for use on or in connection with the Leased Property with
Funding provided by the Funding Parties. No portion of the proceeds of the Loans
will be used by the Lessor (i) in connection with, whether directly or
indirectly, any tender offer for, or other acquisition of, stock of any
corporation with a view towards obtaining control of such other corporation or
(ii) directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of purchasing or carrying any Margin Stock;
(b) it shall not engage in any business or activity, or invest in any
Person, except for activities similar to its activities conducted on the date
hereof, the Transaction and lease transactions similar to the Transaction;
(c) it will maintain tangible net worth in an amount no less than the
sum of (i) $100,000 plus (ii) 3% of its total assets (calculated assuming no
----
reduction in the value of any leased property from its original cost to the
Lessor);
(d) it will deliver to the Agent and ▇▇▇▇ Furniture, as soon as
available and in any event within 90 days after the end of each fiscal year, a
balance sheet of the Lessor as of the end of such fiscal year and the related
statements of income, partners' capital and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the previous
fiscal year, together with copies of its tax returns, all certified by an
officer of the General Partner (and if the Lessor ever prepares audited
financial statements, it shall deliver copies thereof to the Agent and ▇▇▇▇
Furniture);
(e) it will permit the Agent, ▇▇▇▇ Furniture and their respective
representatives to examine, and make copies from, the Lessor's books and
records, and to visit the offices and properties of the Lessor for the purpose
of examining such materials, and to discuss the Lessor's performance hereunder
with any of its, or its general partner's, officers and employees;
(f) it shall not consent to the creation of any easement or other
restriction against any Leased Property other than as permitted pursuant to
Article VI of the Lease;
37
(g) it shall promptly discharge each Lessor Lien and shall indemnify
the Lenders and the Lessees for any diminution in value of any Leased Property
resulting from such Lessor Liens;
(h) it shall not enter into any other transactions, leases, purchases
or other agreements, other than immaterial transactions, purchases, leases and
other agreements entered into by the Lessor in the ordinary course of its
business, in which the other parties to said transactions, leases, purchases or
other agreements will have any recourse against Lessor which is in addition to
Lessor's ownership or other interest in the property subject to such
transactions, purchases, leases or other agreements, other than liability for
required fundings, breach of contract, misrepresentation, gross negligence,
willful misconduct, fraud, failure to turn over funds and similar exceptions to
limitations on recourse;
(i) it shall not guaranty the liabilities of any other Person;
(j) it shall pay its debts as such debts become due unless such debts
are the subject of a bona fide dispute and are being contested in good faith and
by appropriate proceedings; and
(k) except for the Operative Documents, it shall not pledge, authorize
or grant any Lien against the Leased Property nor any fixtures or equipment
located therein or attached thereto.
ARTICLE VI.
TRANSFERS BY LESSOR AND LENDERS
SECTION 6.1 Lessor Transfers. The Lessor shall not assign, convey or
----------------
otherwise transfer all or any portion of its right, title or interest in, to or
under any Leased Property or any of the Operative Documents without the prior
written consent of the Lenders and ▇▇▇▇ Furniture which consent may be withheld
in such parties' sole discretion. Any proposed transferee of the Lessor
consented to in writing as provided for above shall make the representations set
forth in Section 4.3 to the other parties hereto and shall execute an agreement
-----------
acknowledging the same and agreeing to assume and be bound by all of the terms,
conditions and covenants set forth in the Operative Documents.
38
SECTION 6.2 Lender Transfers.
----------------
(a) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of such
Lender.
(b) Following the Construction Term Expiration Date, each Lender may
assign all or a portion of its interests, rights and obligations under this
Master Agreement and the Loan Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) to any Eligible Assignee;
provided, however, that (i) the Agent and, except during the continuance of a
-------- -------
Potential Event of Default or Event of Default, ▇▇▇▇ Furniture must give its
prior written consent to such assignment (which consent shall not be
unreasonably withheld or delayed) unless such assignment is to an Affiliate of
the assigning Lender, (ii) unless such Lender is assigning all of its
Commitment, after giving effect to such assignment, the Commitment of both the
assignor and the assignee is at least $5,000,000 and there are no more than four
Lenders and (iii) the parties to each such assignment shall execute and deliver
to the Agent an Assignment and Acceptance, and, unless such assignment is to an
Affiliate of such Lender, a processing and recordation fee of $3,000 payable to
the Agent. Any such assignment of the Loans shall include both the A Loans and
the B Loans, on a pro rata basis. No Lessee shall be responsible for such
processing and recordation fee or any costs or expenses incurred by any Lender
or the Agent in connection with such assignment. From and after the effective
date specified in each Assignment and Acceptance, which effective date shall be
at least five (5) Business Days after the execution thereof, the assignee there
under shall be a party hereto and to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Master Agreement and the Loan Agreement.
(c) Each Lender may, without the consent of any Obligor, sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Master Agreement and the Loan Agreement
(including all or a portion of its Commitments in the Loans owing to it),
provided, however, that (i) such Lender's obligations under this Master
-------- -------
Agreement and the Loan Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) the participating bank or other entity shall not be
entitled to any greater benefit than its selling Lender under the cost
protection
39
provisions contained in Section 7.5 of this Master Agreement, and (iv) each
-----------
Obligor, the Agent and the other Lenders shall continue to deal solely and
directly with each Lender in connection with such Lender's rights and
obligations under this Master Agreement and the other Operative Documents, and
such Lender shall retain the sole right to enforce the obligations of Lessor
relating to the Loans and to approve any amendment, modification or waiver of
any provisions of this Master Agreement and the Loan Agreement (except that such
Lender may permit the participant to approve any amendment, modification or
waiver which would reduce the principal of or the interest rate on its Loan,
extend the term of such Lender's Commitment, reduce the amount of any fees to
which such participant is entitled or extend the final scheduled payment date of
any Loan), (v) no such transfer shall be effective unless the participant
establishes to the satisfaction of the Agent its entitlement to a complete
exemption from withholding tax, and (vi) the participant designates the Agent as
its representative for dealing with the Lessees and the Agent accepts such
appointment and agrees to be responsible for obtaining the consent of or giving
notice to any Funding Party as required under the provisions of the Operative
Documents. Any Lender selling a participation hereunder shall provide prompt
written notice to the Agent of the name of such participant.
(d) Any Lender or participant may, in connection with the assignment
or participation or proposed assignment or participation, pursuant to this
Section, disclose to the assignee or participant or proposed assignee or
participant any information relating to ▇▇▇▇ Companies or its Subsidiaries
furnished to such Lender by or on behalf of ▇▇▇▇ Companies. With respect to any
disclosure of confidential, non-public, proprietary information, such proposed
assignee or participant shall agree to use the information only for the purpose
of making any necessary credit judgments with respect to this facility and not
to use the information in any manner prohibited by any law, including without
limitation, the securities laws of the United States. The proposed participant
or assignee shall agree not to disclose any of such information except as
permitted by this Master Agreement. The proposed participant or assignee shall
further agree to return all documents or other written material and copies
thereof received from any Lender, the Agent or any Lessee relating to such
confidential information unless otherwise properly disposed of by such entity.
(e) Any Lender may at any time assign all or any portion of its rights
under this Master Agreement and the Notes to a Federal Reserve Bank; provided
--------
that no such assignment shall
40
release such Lender from any of its obligations hereunder.
ARTICLE VII.
INDEMNIFICATION
SECTION 7.1 General Indemnification. Each Obligor, jointly and severally,
-----------------------
agrees, whether or not any of the transactions contemplated hereby shall be
consummated, to assume liability for, and to indemnify, protect, defend, save
and hold harmless each Indemnitee, on an After-Tax Basis, from and against, any
and all Claims that may be imposed on, incurred by or asserted, or threatened to
be asserted, against such Indemnitee, whether or not such Indemnitee shall also
be indemnified as to any such Claim by any other Person and whether or not such
Claim arises or accrues prior to any Closing Date or after the Lease Termination
Date, or results from such Indemnitee's negligence, in any way relating to or
arising out of:
(a) any of the Operative Documents or any of the transactions
contemplated thereby, and any amendment, modification or waiver in respect
thereof; or
(b) any Land, any Building or any part thereof or interest therein;
(c) the purchase, design, construction, preparation, installation,
inspection, delivery, non-delivery, acceptance, rejection, ownership,
management, possession, operation, rental, lease, sublease, repossession,
maintenance, repair, alteration, modification, addition, substitution, storage,
transfer of title, redelivery, use, financing, refinancing, disposition,
operation, condition, sale (including, without limitation, any sale pursuant to
the Lease), return or other disposition of all or any part of any interest in
any Leased Property or the imposition of any Lien, other than a Lessor Lien (or
incurring of any liability to refund or pay over any amount as a result of any
Lien, other than a Lessor Lien) thereon, including, without limitation: (i)
Claims or penalties arising from any violation or alleged violation of law or in
tort (strict liability or otherwise), (ii) latent or other defects, whether or
not discoverable, (iii) any Claim based upon a violation or alleged violation of
the terms of any restriction, easement, condition or covenant or other matter
affecting title to any Leased Property or any part thereof, (iv) the making of
any Alterations in violation of any standards imposed by any insurance policies
required to be maintained by any Lessee pursuant to the Lease which are in
41
effect at any time with respect to any Leased Property or any part thereof, (v)
any Claim for patent, trademark or copyright infringement, (vi) Claims arising
from any public improvements with respect to any Leased Property resulting in
any charge or special assessments being levied against any Leased Property or
any Claim for utility "tap-in" fees, and (vii) Claims for personal injury or
real or personal property damage occurring, or allegedly occurring, on any Land,
Building or Leased Property;
(d) the breach or alleged breach by any Obligor of any representation
or warranty made by it or deemed made by it in any Operative Document or any
certificate required to be delivered by any Operative Document;
(e) the retaining or employment of any broker, finder or financial
advisor by any Obligor to act on its behalf in connection with this Master
Agreement, or the incurring of any fees or commissions to which the Lessor, the
Agent or any Lender might be subjected by virtue of their entering into the
transactions contemplated by this Master Agreement (other than fees or
commissions due to any broker, finder or financial advisor retained by the
Lessor, the Agent or any Lender);
(f) the existence of any Lien on or with respect to any Leased
Property, the Construction, any Basic Rent or Supplemental Rent, title thereto,
or any interest therein, including any Liens which arise out of the possession,
use, occupancy, construction, repair or rebuilding of any Leased Property or by
reason of labor or materials furnished or claimed to have been furnished to the
Construction Agent, any Lessee, or any of its contractors or agents or by reason
of the financing of any personalty or equipment purchased or leased by any
Lessee or Alterations constructed by any Lessee, except Lessor Liens and Liens
in favor of Agent, Lessor and/or Lenders;
(g) subject to the accuracy of any Funding Party's representation set
forth in Section 4.3(g) and in Section 4.4(b), the transactions contemplated
hereby or by any other Operative Document, in respect of the application of
Parts 4 and 5 of Subtitle B of Title I of ERISA and any prohibited transaction
described in Section 4975(c) of the Code; or
(h) any act or omission by any Obligor under any Purchase Agreement or
any other Operative Document, and any breach of any requirement, condition,
restriction or limitation in any Deed or Purchase Agreement;
42
provided, however, no Lessee shall be required to indemnify any Indemnitee under
-------- -------
this Section 7.1 for any of the following: (1) any Claim to the extent that such
-----------
Claim results from the willful misconduct (including willful failure to act
where such Indemnitee had a duty to act), gross negligence, breach of contract
or misrepresentation of such Indemnitee; (2) any Claim resulting from Lessor
Liens which the Lessor or the Lenders are responsible for discharging under the
Operative Documents, (3) any Claim arising from a breach or alleged breach by
the Lenders of any agreement entered into in connection with the assignment or
participation of any Loan or Lessor Amount, (4) the failure on the part of the
Agent to distribute in accordance with this Agreement any amounts received and
distributable by it hereunder, (5) a Claim arising from the offer, sale or
delivery of a Note or an interest in a Note or a violation of any Requirements
of Law by any Indemnitee, and (6) the transfer by any Indemnitee of the Leased
Property other than pursuant to the Lease or in connection with the exercise of
rights or remedies under the Operative Documents; provided, further, that with
-------- -------
respect to each Construction Land Interest, each Lessee's indemnity obligations
with respect to such Leased Property shall be governed by Section 3.3 of the
Construction Agency Agreement during the Construction Term therefor. It is
expressly understood and agreed that the indemnity provided for herein shall
survive the expiration or termination of, and shall be separate and independent
from any other remedy under this Master Agreement or any other Operative
Document.
SECTION 7.2 Environmental Indemnity. In addition to and without
-----------------------
limitation of Section 7.1 or Section 3.3 of the Construction Agency Agreement,
-----------
each Obligor, jointly and severally, agrees to indemnify, hold harmless and
defend each Indemnitee from and against any and all claims (including without
limitation third party claims for personal injury or real or personal property
damage), losses (including but not limited to any loss of value of any Leased
Property), damages, liabilities, fines, penalties, charges, suits, settlements,
demands, administrative and judicial proceedings (including informal proceedings
and investigations) and orders, judgments, remedial action, requirements,
enforcement actions of any kind, and all reasonable costs and expenses actually
incurred in connection therewith (including, but not limited to, reasonable
attorneys' and/or paralegals' fees and expenses), including, but not limited to,
all costs incurred in connection with any investigation or monitoring of site
conditions or any clean-up, remedial, removal or restoration work by any
federal, state or local government agency, arising directly or indirectly, in
whole or in part, out
43
of
(i) the presence on or under any Land of any Hazardous Materials, or
any releases or discharges of any Hazardous Materials on, under, from or
onto any Land,
(ii) any activity, including, without limitation, construction,
carried on or undertaken on or off any Land, and whether by a Lessee or any
predecessor in title or any employees, agents, contractors or
subcontractors of a Lessee or any predecessor in title, or any other
Person, in connection with the handling, treatment, removal, storage,
decontamination, clean-up, transport or disposal of any Hazardous Materials
that at any time are located or present on or under or that at any time
migrate, flow, percolate, diffuse or in any way move onto or under any
Land,
(iii) loss of or damage to any property or the environment (including,
without limitation, clean-up costs, response costs, remediation and removal
costs, cost of corrective action, costs of financial assurance, fines and
penalties and natural resource damages), or death or injury to any Person,
and all expenses associated with the protection of wildlife, aquatic
species, vegetation, flora and fauna, and any mitigative action required by
or under Environmental Laws, in each case to the extent related to any
Leased Property,
(iv) any claim concerning any Leased Property's lack of compliance
with Environmental Laws, or any act or omission causing an environmental
condition on or with respect to any Leased Property that requires
remediation or would allow any governmental agency to record a lien or
encumbrance on the land records, or
(v) any residual contamination on or under any Land, or affecting
any natural resources on any Land, and to any contamination of any property
or natural resources arising in connection with the generation, use,
handling, storage, transport or disposal of any such Hazardous Materials on
or from any Leased Property; in each case irrespective of whether any of
such activities were or will be undertaken in accordance with applicable
laws, regulations, codes and ordinances;
44
in any case with respect to the matters described in the foregoing clauses (i)
-----------
through (v) that arise or occur
---
(w) prior to or during the Lease Term,
(x) at any time during which a Lessee or any Affiliate thereof owns
any interest in or otherwise occupies or possesses any Leased Property or
any portion thereof, or
(y) during any period after and during the continuance of any Event of
Default;
provided, however, no Lessee shall be required to indemnify any Indemnitee under
-------- -------
this Section 7.2 for any Claim to the extent that such Claim results from the
-----------
willful misconduct (including willful failure to act where such Indemnitee had a
duty to act) or gross negligence of such Indemnitee. It is expressly understood
and agreed that the indemnity provided for herein shall be separate and
independent from any other remedy under this Master Agreement, the Lease or any
other Operative Document, and shall survive for a period of three (3) years
after the termination of the Lease if the environmental report delivered
pursuant to Section 14.10 of the Lease indicates that no remedial action is
required under Applicable Law or recommended by the environmental consultant
preparing such report; provided, that there shall be no time limit with respect
--------
to any indemnity for Claims related to any violations, releases or discharges of
Hazardous Materials, presence of Hazardous Materials or other event or
circumstance described in any environmental report delivered pursuant to Section
14.10 of the Lease, unless ▇▇▇▇ Furniture delivers to the Lessor and the Agent a
subsequent environmental report, from a firm, and in a form, satisfactory to the
Lessor and the Agent, showing that all such violations, releases and discharges
have been cured, and all contamination related thereto has been cleaned up, all
such Hazardous Materials have been removed, all other events and circumstances
described in such original report have been cured and that all remedial action
required by Applicable Laws or recommended pursuant to the original report has
been satisfactorily completed, in which case the indemnity provided in this
Section 7.2 shall survive for a period of three (3) years after the delivery of
-----------
such subsequent report.
SECTION 7.3 Proceedings in Respect of Claims. With respect to any amount
--------------------------------
that a Lessee is requested by an Indemnitee to pay by reason of Section 7.1 or
-----------
7.2, such Indemnitee shall, if so requested by such Lessee and prior to any
---
payment, submit such
45
additional information to such Lessee as such Lessee may reasonably request and
which is in the possession of, or under the control of, such Indemnitee to
substantiate properly the requested payment. In case any action, suit or
proceeding shall be brought against any Indemnitee, such Indemnitee promptly
shall notify ▇▇▇▇ Companies of the commencement thereof (provided that the
--------
failure of such Indemnitee to promptly notify ▇▇▇▇ Companies shall not affect
any Obligor's obligation to indemnify hereunder except to the extent that a
Lessee's ability to contest is materially prejudiced by such failure), and such
Lessee shall be entitled, at its expense, to participate in, and, to the extent
that such Lessee desires to, assume and control the defense thereof with counsel
reasonably satisfactory to such Indemnitee; provided, however, that such
-------- -------
Indemnitee may pursue a motion to dismiss such Indemnitee from such action, suit
or proceeding with counsel of such Indemnitee's choice at the Lessees' expense;
and provided further that a Lessee may assume and control the defense of
-------- -------
such proceeding only if ▇▇▇▇ Companies shall have acknowledged in writing its
and each Lessee's obligations to fully indemnify such Indemnitee in respect of
such action, suit or proceeding, Lessees shall pay all reasonable costs and
expenses related to such action, suit or proceeding as and when incurred and the
related Lessee shall keep such Indemnitee fully apprised of the status of such
action suit or proceeding and shall provide such Indemnitee with all information
with respect to such action suit or proceeding as such Indemnitee shall
reasonably request; and, provided further, that no Lessee shall be entitled
-------- -------
to assume and control the defense of any such action, suit or proceeding if and
to the extent that, (A) in the reasonable opinion of such Indemnitee, (x) such
action, suit or proceeding involves any possibility of imposition of criminal
liability or any material risk of material civil liability on such Indemnitee or
(y) such action, suit or proceeding will involve a material risk of the sale,
forfeiture or loss of, or the creation of any Lien (other than a Permitted
Encumbrance) on any Leased Property or any part thereof unless the related
Lessee or ▇▇▇▇ Companies shall have posted a bond or other security satisfactory
to the relevant Indemnitees in respect to such risk if reasonably requested by
the Agent or (z) the control of such action, suit or proceeding would involve an
actual or potential material conflict of interest, (B) such proceeding involves
Claims not fully indemnified by the Lessees which the related Lessee and the
Indemnitee have been unable to sever from the indemnified claim(s), or (C) an
Event of Default has occurred and is continuing. The Indemnitee may participate
in a reasonable manner at its own expense and with its own counsel in any
proceeding conducted by a Lessee in accordance with the
46
foregoing.
If a Lessee fails to fulfill the conditions to such Lessee's assuming the
defense of any claim after receiving notice thereof on or prior to the date that
is ten (10) days prior to the date that an answer or response is required, the
Indemnitee may undertake such defense, at the Lessees' expense. No Lessee shall
enter into any settlement or other compromise with respect to any Claim in
excess of $1,000,000 which is entitled to be indemnified under Section 7.1 or
-----------
7.2 without the prior written consent of the related Indemnitee, which consent
---
shall not be unreasonably withheld or delayed. Unless an Event of Default shall
have occurred and be continuing, no Indemnitee shall enter into any settlement
or other compromise with respect to any claim which is entitled to be
indemnified under Section 7.1 or 7.2 without the prior written consent of ▇▇▇▇
----------- ---
Companies, which consent shall not be unreasonably withheld, unless such
Indemnitee waives its right to be indemnified under Section 7.1 or 7.2 with
----------- ---
respect to such Claim.
Upon payment in full of any Claim by the Lessees pursuant to Section 7.1 or
-----------
7.2 to or on behalf of an Indemnitee, the Lessees, without any further action,
---
shall be subrogated to any and all claims that such Indemnitee may have relating
thereto (other than claims in respect of insurance policies maintained by such
Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be reasonably necessary
to preserve any such claims and otherwise cooperate with the Lessees and give
such further assurances as are reasonably necessary or advisable to enable the
Lessees vigorously to pursue such claims.
Any amount payable to an Indemnitee pursuant to Section 7.1 or 7.2 shall be
----------- ---
paid to such Indemnitee promptly upon, but in no event later than thirty (30)
days after, receipt of a written demand therefor from such Indemnitee,
accompanied by a written statement describing in reasonable detail the basis for
such indemnity and the computation of the amount so payable.
If for any reason the indemnification provided for in Section 7.1 or 7.2 is
----------- ---
unavailable to an Indemnitee or is insufficient to hold an Indemnitee harmless,
then each Obligor and each Lessee agrees to contribute to the amount paid or
payable by such Indemnitee as a result of such loss, claim, damage or liability
in such proportion as is appropriate to reflect not only the relative benefits
received by such
47
Indemnitee on the one hand and by ▇▇▇▇ Companies and the Lessees on the other
hand but also the relative fault of such Indemnitee as well as any other
relevant equitable considerations. It is expressly understood and agreed that
the right to contribution provided for herein shall survive the expiration or
termination of and shall be separate and independent from any other remedy under
this Master Agreement, the Lease or any other Operative Document.
Notwithstanding anything to the contrary set forth herein, the amount of
any Claim payable by any Obligor or Lessee to any Indemnitee under this Section
7.3 shall be reduced by the net amount of any insurance proceeds received by
such Indemnitee in respect of such Claim pursuant to any insurance policy
maintained by such Indemnitee at its own expense; provided, however, that no
--------
Indemnitee shall be required to maintain such insurance or, if such insurance is
maintained, to submit a claim under such insurance.
SECTION 7.4 General Tax Indemnity. (a) Tax Indemnity. Except as
--------------------- -------------
otherwise provided in this Section 7.4, each Obligor, jointly and severally,
-----------
shall pay on an After-Tax Basis, and on written demand shall indemnify and hold
each Tax Indemnitee harmless from and against, any and all fees (including,
without limitation, documentation, recording, license and registration fees),
taxes (including, without limitation, income, gross receipts, sales, rental,
use, turnover, value-added, property, excise and stamp taxes), levies, imposts,
duties, charges, assessments or withholdings of any nature whatsoever, together
with any penalties, fines or interest thereon or additions thereto (any of the
foregoing being referred to herein as "Taxes" and individually as a "Tax" (for
----- ---
the purposes of this Section 7.4, the definition of "Taxes" includes amounts
-----------
imposed on, incurred by, or asserted against each Tax Indemnitee as the result
of any prohibited transaction, within the meaning of Section 406 or 407 of ERISA
or Section 4975(c) of the Code, arising out of the transactions contemplated
hereby or by any other Operative Document)) imposed on or with respect to any
Tax Indemnitee, any Obligor, any Leased Property or any portion thereof or any
Land, or any sublessee or user thereof, by the United States or by any state or
local government or other taxing authority in the United States in connection
with or in any way relating to (i) the acquisition, financing, mortgaging,
construction, preparation, installation, inspection, delivery, non-delivery,
acceptance, rejection, purchase, ownership, possession, rental, lease, sublease,
maintenance, repair, storage, transfer of title, redelivery, use, operation,
48
condition, sale, return or other application or disposition of all or any part
of any Leased Property or the imposition of any Lien (or incurrence of any
liability to refund or pay over any amount as a result of any Lien) thereon,
(ii) Basic Rent or Supplemental Rent or the receipts or earnings arising from or
received with respect to any Leased Property or any part thereof, or any
interest therein or any applications or dispositions thereof, (iii) any other
amount paid or payable pursuant to the Notes or any other Operative Documents,
(iv) any Leased Property, any Land or any part thereof or any interest therein
(including, without limitation, all assessments payable in respect thereof,
including, without limitation, all assessments noted on the related Title
Policy), (v) all or any of the Operative Documents, any other documents
contemplated thereby, any amendments and supplements thereto, and (vi) otherwise
with respect to or in connection with the transactions contemplated by the
Operative Documents.
(b) Exclusions from General Tax Indemnity. Section 7.4(a) shall not
------------------------------------- --------------
apply to:
(i) Taxes on, based on, or measured by or with respect to net
income of the Lessor, the Agent and the Lenders (including, without
limitation, minimum Taxes, capital gains Taxes, Taxes on or measured by
items of tax preference or alternative minimum Taxes);
(ii) Withholding Taxes, other than withholding Taxes imposed by
the United States or any state in which Leased Property is located (i) on
payments with respect to the Notes, to the extent imposed by reason of a
change in Applicable Law occurring after the date on which the holder of
such Note became the holder of such Note or (ii) on Rent, to the extent the
net payment of Rent after deduction of such withholding Taxes would be less
than amounts currently payable with respect to the Funded Amounts;
(iii) Taxes on, based on, or in the nature of or measured by
Taxes on doing business, business privilege, franchise, capital, capital
stock, net worth, or mercantile license or similar taxes other than (A) any
increase in such Taxes imposed on such Tax Indemnitee by any state in which
Leased Property is located, net of any decrease in such taxes realized by
such Tax Indemnitee, to the extent that such tax increase would not have
occurred if on each Funding Date the Lessor and the Lenders had advanced
funds to a Lessee or the Construction Agent in the form of loans
49
secured by the Leased Property in an amount equal to the Funded Amounts
funded on such Funding Date, with debt service for such loans equal to the
Basic Rent payable on each Payment Date and a principal balance at the
maturity of such loans in a total amount equal to the Funded Amounts at the
end of the Lease Term, or (B) any Taxes that are or are in the nature of
sales, use, rental, license or property Taxes relating to any Leased
Property;
(iv) Taxes that are based on, or measured by, the fees or other
compensation received by a Person acting as Agent (in its individual
capacities) or any Affiliate of any thereof for acting as trustee under the
Loan Agreement;
(v) Taxes that result from any act, event or omission, or are
attributable to any period of time, that occurs after the earlier of (A)
the expiration of the Lease Term with respect to any Leased Property and,
if such Leased Property is required to be returned to the Lessor in
accordance with the Lease, such return and (B) the discharge in full of the
Lessees' obligations to pay the Lease Balance, or any amount determined by
reference thereto, with respect to any Leased Property and all other
amounts due under the Lease, unless such Taxes relate to acts, events or
matters occurring prior to the earlier of such times or are imposed on or
with respect to any payments due under the Operative Documents after such
expiration or discharge;
(vi) Taxes imposed on a Tax Indemnitee that result from any
voluntary sale, assignment, transfer or other disposition or bankruptcy by
such Tax Indemnitee or any related Tax Indemnitee of any interest in any
Leased Property or any part thereof, or any interest therein or any
interest or obligation arising under the Operative Documents, or from any
sale, assignment, transfer or other disposition of any interest in such Tax
Indemnitee or any related Tax Indemnitee, it being understood that each of
the following shall not be considered a voluntary sale: (A) any
substitution, replacement or removal of any of the Leased Property by any
Lessee, (B) any sale or transfer resulting from the exercise by any Lessee
of any termination option, any purchase option or sale option, (C) any sale
or transfer while an Event of Default shall have occurred and be continuing
under the Lease, and (D) any sale or transfer resulting from the Lessor's
exercise of remedies under the Lease;
50
(vii) any Tax which is being contested in accordance with the
provisions of Section 7.4(c), during the pendency of such contest;
--------------
(viii) any Tax that is imposed on a Tax Indemnitee as a result of
such Tax Indemnitee's gross negligence or willful misconduct (including
willful failure to act where such Tax Indemnitee had a duty to act) (other
than gross negligence or willful misconduct imputed to such Tax Indemnitee
solely by reason of its interest in any Leased Property) or as a result of
such Tax, Indemnitee's failure to comply with Section 2.4;
(ix) any Tax that results from a Tax Indemnitee engaging, with
respect to any Leased Property, in transactions other than those permitted
by the Operative Documents;
(x) to the extent any tax, interest, penalties or additions
to tax result in whole or in part from the failure of a Tax Indemnitee to
file a return or pay a Tax that it is required to file or pay in a proper
and timely manner, unless such failure (A) results from the transactions
contemplated by the Operative Documents in circumstances where Lessee did
not give timely notice to such Tax Indemnitee of such filing or payment
requirement that would have permitted a proper and timely filing of such
return or payment of such Tax, as the case may be, or (B) results from the
failure of Lessee to supply information necessary for the proper and timely
filing of such return or payment of such Tax, as the case may be, that was
not in the possession of such Tax Indemnitee; and
(xi) as to Lessor, any Tax that results from the breach by the
Lessor of its representation and warranty made in Section 4.3(g) or as to
--------------
any Lender the breach of such Lender of its representation and warranty
made in Section 4.4(b).
--------------
(c) Contests. If any claim shall be made against any Tax Indemnitee
--------
or if any proceeding shall be commenced against any Tax Indemnitee (including a
written notice of such proceeding) for any Taxes as to which the Obligors may
have an indemnity obligation pursuant to Section 7.4, or if any Tax Indemnitee
-----------
shall determine that any Taxes as to which the Obligors may have an indemnity
obligation pursuant to Section 7.4 may be payable, such Tax Indemnitee shall
-----------
promptly notify ▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇. ▇▇▇▇ Companies shall be entitled, at its expense, to participate in,
and, to the extent that ▇▇▇▇ Companies desires to, assume and control the
defense thereof; provided, however, that ▇▇▇▇ Companies shall have acknowledged
-------- -------
in writing its and each Obligor's obligation to fully indemnify such Tax
Indemnitee in respect of such action, suit or proceeding if the contest is
unsuccessful; and, provided further, that ▇▇▇▇ Companies shall not be
-------- -------
entitled to assume and control the defense of any such action, suit or
proceeding (but the Tax Indemnitee shall then contest, at the sole cost and
expense of ▇▇▇▇ Companies and the Lessees, on behalf of ▇▇▇▇ Companies with
representatives reasonably satisfactory to ▇▇▇▇ Companies or a Lessee) if and to
the extent that, (A) in the reasonable opinion of such Tax Indemnitee, such
action, suit or proceeding (x) involves any meaningful risk of imposition of
criminal liability or any material risk of material civil liability on such Tax
Indemnitee or (y) will involve a material risk of the sale, forfeiture or loss
of, or the creation of any Lien (other than a Permitted Encumbrance) on any
Leased Property or any part thereof unless ▇▇▇▇ Companies or a Lessee shall have
posted a bond or other security satisfactory to the relevant Tax Indemnitees in
respect to such risk if reasonably requested by the Agent, (B) such proceeding
involves Claims not fully indemnified by the Obligors which ▇▇▇▇ Companies and
the Tax Indemnitee have been unable to sever from the indemnified claim(s), (C)
an Event of Default has occurred and is continuing, (D) such action, suit or
proceeding involves matters which extend beyond or are unrelated to the
Transaction and if determined adversely could be materially detrimental to the
interests of such Tax Indemnitee notwithstanding indemnification by the Lessees
or (E) such action, suit or proceeding involves the federal or any state income
tax liability of the Tax Indemnitee. With respect to any contests controlled by
a Tax Indemnitee, (i) if such contest relates to the federal or any state income
tax liability of such Tax Indemnitee, such Tax Indemnitee shall be required to
conduct such contest only if ▇▇▇▇ Companies shall have provided to such Tax
Indemnitee an opinion of independent tax counsel selected by the Tax Indemnitee
and reasonably satisfactory to ▇▇▇▇ Companies stating that a reasonable basis
exists to contest such claim or (ii) in the case of an appeal of an adverse
determination of any contest relating to any Taxes, an opinion of such counsel
to the effect that such appeal is more likely than not to be successful,
provided, however, such Tax Indemnitee shall in no event be required to appeal
-------- -------
an adverse determination to the United States Supreme Court. The Tax Indemnitee
may participate in a reasonable manner at its own expense and with its own
counsel in any proceeding conducted by ▇▇▇▇ Companies in accordance with the
52
foregoing.
Each Tax Indemnitee shall at ▇▇▇▇ Companies' and the Lessees' expense
supply ▇▇▇▇ Companies with such information and documents in such Tax
Indemnitee's possession reasonably requested by ▇▇▇▇ Companies as are necessary
or advisable for ▇▇▇▇ Companies to participate in any action, suit or proceeding
to the extent permitted by this Section 7.4. Unless an Event of Default shall
-----------
have occurred and be continuing, no Tax Indemnitee shall enter into any
settlement or other compromise with respect to any Claim which is entitled to be
indemnified under this Section 7.4 without the prior written consent of ▇▇▇▇
-----------
Companies, which consent shall not be unreasonably withheld, unless such Tax
Indemnitee waives its right to be indemnified under this Section 7.4 with
-----------
respect to such Claim.
Notwithstanding anything contained herein to the contrary, (a) a Tax
Indemnitee will not be required to contest (and ▇▇▇▇ Companies shall not be
permitted to contest except on its own behalf if it is subject thereto) a claim
with respect to the imposition of any Tax if such Tax Indemnitee shall waive its
right to indemnification under this Section 7.4 with respect to such claim (and
-----------
any related claim with respect to other taxable years the contest of which is
precluded as a result of such waiver) and (b) no Tax Indemnitee shall be
required to contest any claim if the subject matter thereof shall be of a
continuing nature and shall have previously been the subject of a judicial
decision adverse to such Tax Indemnitee, unless there has been a change in law
which in the opinion of Tax Indemnitee's counsel creates substantial authority
for the success of such contest. Each Tax Indemnitee and ▇▇▇▇ Companies shall
consult in good faith with each other regarding the conduct of such contest
controlled by either.
(d) Reimbursement for Tax Savings. If (x) a Tax Indemnitee shall
-----------------------------
obtain a credit or refund of any Taxes paid by any Obligor pursuant to this
Section 7.4 or (y) by reason of the incurrence or imposition of any Tax for
-----------
which a Tax Indemnitee is indemnified hereunder or any payment made to or for
the account of such Tax Indemnitee by any Obligor pursuant to this Section 7.4,
-----------
such Tax Indemnitee at any time realizes a reduction in any Taxes for which the
Obligors are not required to indemnify such Tax Indemnitee pursuant to this
Section 7.4, which reduction in Taxes was not taken into account in computing
-----------
such payment by any Obligor to or for the account of such Tax Indemnitee, then
such Tax Indemnitee shall promptly pay to ▇▇▇▇ Companies (xx) the amount of such
credit or refund, together with the amount of any
53
interest received by such Tax Indemnitee on account of such credit or refund or
(yy) an amount equal to such reduction in Taxes, as the case may be; provided
--------
that no such payment shall be made so long as an Event of Default shall have
occurred and be continuing (but shall be paid promptly after all Events of
Default have been cured) and, provided, further, that the amount payable to ▇▇▇▇
-------- -------
Companies by any Tax Indemnitee pursuant to this Section 7.4(d) shall not at any
--------------
time exceed the aggregate amount of (i)(A) all indemnity payments made by the
Obligors under this Section 7.4 to such Tax Indemnitee with respect to the Taxes
-----------
which gave rise to the credit or refund or with respect to the Tax which gave
rise to the reduction in Taxes, plus (B) the amount of interest, if any, paid to
such Tax Indemnitee with respect to such refund or credit by taxing authority
less (ii) the amount of all prior payments made to ▇▇▇▇ Companies by such Tax
Indemnitee under this Section 7.4(d). Each Tax Indemnitee agrees to act in good
--------------
faith to claim such refunds and other available Tax benefits, and take such
other actions as may be reasonable to minimize any payment due from the Obligors
pursuant to this Section 7.4. The disallowance or reduction of any credit,
-----------
refund or other tax savings with respect to which a Tax Indemnitee has made a
payment to ▇▇▇▇ Companies and the Lessees under this Section 7.4(d) shall be
--------------
treated as a Tax for which any Obligor is obligated to indemnify such Tax
Indemnitee hereunder without regard to Section 7.4(b) hereof.
--------------
(e) Payments. Any Tax indemnifiable under this Section 7.4 shall be
-------- -----------
paid by ▇▇▇▇ Companies or a Lessee directly when due to the applicable taxing
authority if direct payment is practicable and permitted. If direct payment to
the applicable taxing authority is not permitted or is otherwise not made, any
amount payable to a Tax Indemnitee pursuant to Section 7.4 shall be paid within
-----------
thirty (30) days after receipt of a written demand therefor from such Tax
Indemnitee accompanied by a written statement describing in reasonable detail
the amount so payable, but not before the date that the relevant Taxes are due.
Any payments made pursuant to Section 7.4 shall be made to the Tax Indemnitee
-----------
entitled thereto or ▇▇▇▇ Companies, as the case may be, in immediately available
funds at such bank or to such account as specified by the payee in written
directions to the payor, or, if no such direction shall have been given, by
check of the payor payable to the order of the payee by certified mail, postage
prepaid at its address as set forth in this Master Agreement. Upon the request
of any Tax Indemnitee with respect to a Tax that ▇▇▇▇ Companies and the Lessees
are required to pay, ▇▇▇▇ Companies shall furnish to such Tax Indemnitee the
original or a certified copy of a receipt for ▇▇▇▇ Companies or a Lessee's
54
payment of such Tax or such other evidence of payment as is reasonably
acceptable to such Tax Indemnitee.
(f) Reports. If any Obligor knows of any report, return or statement
-------
required to be filed with respect to any Taxes that are subject to
indemnification under this Section 7.4, such Obligor shall, if such Obligor is
-----------
permitted by Applicable Law, timely file such report, return or statement (and,
to the extent permitted by law, show ownership of the applicable Leased Property
in such Lessee); provided, however, that if such Obligor is not permitted by
-------- -------
Applicable Law or does not have access to the information required to file any
such report, return or statement, such Obligor will promptly so notify the
appropriate Tax Indemnitee, in which case Tax Indemnitee will file such report.
In any case in which the Tax Indemnitee will file any such report, return or
statement, the related Lessee shall, upon written request of such Tax
Indemnitee, prepare such report, return or statement for filing by such Tax
Indemnitee or, if such Tax Indemnitee so requests, provide such Tax Indemnitee
with such information as is reasonably available to such Lessee.
(g) Verification. At ▇▇▇▇ Companies' request, the amount of any
------------
indemnity payment by an Obligor or any payment by a Tax Indemnitee to ▇▇▇▇
Companies pursuant to this Section 7.4 shall be verified and certified by an
-----------
independent public accounting firm selected by ▇▇▇▇ Companies and reasonably
acceptable to the Tax Indemnitee. Unless such verification shall disclose an
error in ▇▇▇▇ Companies' favor of 2% or more of the related indemnity payment,
the costs of such verification shall be borne by ▇▇▇▇ Companies. In no event
shall ▇▇▇▇ Companies or any Lessee have the right to review the Tax Indemnitee's
tax returns or receive any other confidential information from the Tax
Indemnitee in connection with such verification. The Tax Indemnitee agrees to
cooperate with the independent public accounting firm performing the
verification and to supply such firm with all information reasonably necessary
to permit it to accomplish such verification, provided that the information
--------
provided to such firm by such Tax Indemnitee shall be for its confidential use.
The parties agree that the sole responsibility of the independent public
accounting firm shall be to verify the amount of a payment pursuant to this
Master Agreement and that matters of interpretation of this Master Agreement are
not within the scope of the independent accounting firm's responsibilities.
SECTION 7.5 Increased Costs, etc.
--------------------
(a) Illegality. Notwithstanding any other provision
----------
55
herein, if any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Funding Party to make or
maintain LIBOR Advances as contemplated by this Master Agreement, (a) the
commitment of such Funding Party hereunder to continue LIBOR Advance as such and
convert Funded Amounts to LIBOR Advance shall forthwith be canceled and (b) such
Funding Party's Funded Amounts then outstanding as LIBOR Advance, if any, shall
be converted automatically to Prime Rate Advances on the respective last days of
the then current Rent Periods with respect to such Funded Amounts or within such
earlier period as required by law. If any such conversion of a LIBOR Advance
occurs on a day which is not the last day of the then current Rent Period with
respect thereto, each Obligor, jointly and severally, shall pay to such Funding
Party such amounts, if any, as may be required pursuant to Section 7.5(f).
--------------
(b) Requirements of Law. In the event that Eurocurrency Reserve
-------------------
Requirements or any change in any Requirement of Law or in the interpretation or
application thereof or compliance by any Funding Party with any request or
directive (whether or not having the force of law) from any central bank or
other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Funding Party to any tax of any kind
whatsoever with respect to this Master Agreement, any Note or any
LIBOR Advance made by it, or change the basis of taxation of payments
to such Funding Party in respect thereof (except for taxes covered by
Section 7.5(d) and changes in franchise taxes or the rate of tax on
--------------
the overall net income of such Funding Party);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Funding Party which is not
otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Funding Party any other condition;
and the result of any of the foregoing is to increase the cost to
56
such Funding Party, by an amount which such Funding Party reasonably deems to be
material, of making, converting into, continuing or maintaining LIBOR Advances
or to reduce any amount receivable hereunder in respect thereof then, in any
such case, each Obligor, jointly and severally, shall promptly pay such Funding
Party, upon its demand, any additional amounts necessary to compensate such
Funding Party for such increased cost or reduced amount receivable. If any
Funding Party becomes entitled to claim any additional amounts pursuant to this
subsection, it shall promptly notify ▇▇▇▇ Furniture, through the Agent, of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to this subsection submitted by such Funding
Party, through the Agent, to ▇▇▇▇ Furniture in good faith and setting forth in
reasonable detail (and a reasonable basis for such claimed additional amounts)
the calculation of such amounts shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Master Agreement and
the payment of the Notes and all other amounts payable under the Operative
Documents until the second anniversary of such payment and termination.
(c) Capital Adequacy. In the event that any Funding Party or
----------------
corporation controlling such Funding Party shall have determined that any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Funding Party or such corporation with
any request or directive regarding capital adequacy (whether or not having the
force of law) from any Governmental Authority made subsequent to the date hereof
does or shall have the effect of reducing the rate of return on such Funding
Party's capital as a consequence of its obligations hereunder to a level below
that which such Funding Party could have achieved but for such change or
compliance (taking into consideration such Funding Party's policies with respect
to capital adequacy) by an amount reasonably deemed by such Funding Party to be
material, then from time to time, after submission by such Funding Party in good
faith (and setting forth a reasonable basis for additional amounts claimed) to
▇▇▇▇ Furniture (with a copy to the Agent) of a written request therefor setting
forth in reasonable detail the calculation of such amount (which request shall
be conclusive in the absence of manifest error), each Obligor, jointly and
severally, shall pay to such Funding Party such additional amount or amounts as
will compensate such Funding Party for such reduction. This covenant shall
survive the termination of this Master Agreement and the payment of the Notes
and all other amounts payable under the Operative Documents until the second
anniversary of such payment and termination.
57
(d) Taxes. Subject to Section 7.5(e), all payments made by a Lessee
----- --------------
under the Lease and the other Operative Documents shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding, in the case of
the Agent and each Funding Party, net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on the Agent or such Funding Party, as the
case may be, as a result of a present or former connection between the
jurisdiction of the government or taxing authority imposing such tax and the
Agent or such Funding Party (excluding a connection arising solely from the
Agent or such Funding Party having executed, delivered or performed its
obligations or received a payment under, or enforced, this Master Agreement or
any other Operative Document) or any political subdivision or taxing authority
thereof or therein (all such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions and withholdings being hereinafter called "Withholding
-----------
Taxes"). If any Withholding Taxes are required to be withheld from any amounts
-----
payable to the Agent or any Funding Party hereunder or under any other Operative
Document, the amounts so payable to the Agent or such Funding Party (so long as
such Funding Party has provided all applicable forms described in Section
7.5(e), unless the failure to provide such forms is attributable to a change in
Applicable Law occurring after the date such Funding Party becomes a party to
this Master Agreement, the Lease or any Operative Document) shall be increased
to the extent necessary to yield to the Agent or such Funding Party (after
payment of all Withholding Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in the Operative Documents.
Whenever any Withholding Taxes are payable by a Lessee, as promptly as possible
thereafter such Lessee shall send to the Agent for its own account or for the
account of such Funding Party, as the case may be, a certified copy of an
original official receipt received by such Lessee showing payment thereof. If a
Lessee fails to pay any Withholding Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other required
documentary evidence, each Obligor, jointly and severally, shall indemnify the
Agent and the Funding Parties for any incremental taxes, interest or penalties
that may become payable by the Agent or any Funding Party as a result of any
such failure. The agreements in this subsection shall survive the termination
of this Master Agreement and the payment of the Notes and all other amounts
payable under the Operative Documents.
58
(e) Tax Forms. Each Funding Party to this Master Agreement on the
---------
Closing Date that is not incorporated under the laws of the United States of
America or a state thereof agrees that, on or prior to the Initial Closing Date,
it will deliver to ▇▇▇▇ Furniture and the Agent (i) two duly completed signed
originals of United States Internal Revenue Service Form W-8BEN or W-8ECI or
successor applicable form, as the case may be, and (ii) an Internal Revenue
Service Form W-8 or W-9 or successor applicable form. Each such Funding Party
also agrees to deliver to ▇▇▇▇ Furniture and the Agent two further signed
originals of the said Form W-8BEN or W-8ECI and Form W-8 or W-9, or successor
applicable forms or other manner of certification, as the case may be, on or
before the date that any such form expires or becomes obsolete or after the
occurrence of any event requiring a change in the most recent form previously
delivered by it to ▇▇▇▇ Furniture, and such extensions or renewals thereof as
may reasonably be requested by ▇▇▇▇ Furniture or the Agent, unless in any such
case an event (including, without limitation, any change in Applicable Law has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Funding Party from duly completing and delivering any such form with respect to
it and such Funding Party so advises ▇▇▇▇ Furniture and the Agent. Such Funding
Party shall certify (i) in the case of a Form W-8BEN or W-8ECI, that it is
entitled to receive payments under the Operative Documents without deduction or
withholding of any United States federal income taxes and (ii) in the case of a
Form W-8 or W-9, that it is entitled to an exemption from United States backup
withholding tax.
(f) Indemnity. Each Obligor, jointly and severally, agrees to
---------
indemnify each Funding Party and to hold each Funding Party harmless from any
loss or expense which such Funding Party may sustain or incur as a consequence
of (a) default by a Lessee in payment when due of the principal amount of or
interest on any LIBOR Advance, (b) default by a Lessee in making a borrowing or
conversion after such Lessee or the Construction Agent has given (or is deemed
to have given) a notice in accordance with this Master Agreement, (c) default by
a Lessee in making a borrowing of, conversion into or continuation of LIBOR
Advances after a or the Construction Agent Lessee has given a notice requesting
the same in accordance with the provisions of this Master Agreement, (d) default
by a Lessee in making any prepayment of LIBOR Advances after such Lessee has
given a notice thereof in accordance with the provisions of the Operative
Documents or (e) the making of a prepayment, payment or conversion, of LIBOR
59
Advances on a day which is not the last day of a Rent Period with respect
thereto, including, without limitation, in each case, any such loss (other than
non-receipt of the Applicable Margin or, without duplication, anticipated
profits) or expense arising from the reemployment of funds obtained by it or
from fees payable to terminate the deposits from which such funds were obtained
(it being understood that any such calculation will be made on notional amounts
as the Funding Parties are not required to show that they matched deposits
specifically). A certificate as to any additional amounts payable pursuant to
this subsection submitted by such Funding Party, through the Agent, to ▇▇▇▇
Furniture in good faith shall be conclusive in the absence of manifest error.
This covenant shall survive the termination of this Agreement and the payment of
the Notes and all other amounts payable under the Operative Documents.
(g) Action of Affected Funding Parties. Each Funding Party agrees to
----------------------------------
use reasonable efforts (including reasonable efforts to change the booking
office for its Loans) to avoid or minimize any illegality pursuant to Section
-------
7.5(a) or any amounts which might otherwise be payable pursuant to Section
------ -------
7.5(c) or (d); provided, however, that such efforts shall not cause the
------ --- -------- -------
imposition on such Funding Party of any additional costs or legal or regulatory
burdens reasonably deemed by such Funding Party to be material and shall not be
reasonably deemed by such Funding Party to be otherwise contrary to its
policies. In the event that such reasonable efforts are insufficient to avoid
all such illegality or all amounts that might be payable pursuant to Section
-------
7.5(c) or (d), then such Funding Party (the "Affected Funding Party") shall use
------ --- ----------------------
its reasonable efforts to transfer to any other Funding Party (which itself is
not then an Affected Funding Party) its Loans and Commitment, subject to the
provisions of Section 6.2; provided, however, that such transfer shall not be
----------- -------- -------
reasonably deemed by such Affected Funding Party, in its sole discretion, to be
disadvantageous to it or contrary to its policies. In the event that the
Affected Funding Party is unable, or otherwise is unwilling, so to transfer its
Loans and Commitment, ▇▇▇▇ Furniture may designate an alternate lender
(reasonably acceptable to the Agent) to purchase the Affected Funding Party's
Loans and Commitment, at par and including accrued interest, and, subject to the
provisions of Section 6.2, the Affected Funding Party shall transfer its
-----------
Commitment to such alternate lender and such alternate lender shall become a
Funding Party hereunder. Any fee payable to the Agent pursuant to Section 6.2
-----------
in connection with such transfer shall be for the account of ▇▇▇▇ Companies and
the Lessees.
60
SECTION 7.6 End of Term Indemnity. In the event that at the end of the
---------------------
Lease Term for the Leased Properties: (i) the related Lessee elects the option
set forth in Section 14.6 of the Lease, and (ii) after the Lessor receives the
sales proceeds from the Leased Properties under Section 14.6 or 14.7 of the
Lease, together with Lessees' payment of the Recourse Deficiency Amount, the
Lessor shall not have received the entire Lease Balance, then, within 90 days
after the end of the Lease Term, the Lessor or the Agent may obtain, at Lessees'
sole cost and expense, a report from the Appraiser (or, if the Appraiser is not
available, another appraiser reasonably satisfactory to the Lessor or the Agent,
as the case may be, and approved by ▇▇▇▇ Furniture, such approval not to be
unreasonably withheld) in form and substance satisfactory to the Lessor and the
Agent (the "Report") to establish the reason for any decline in value of the
------
Leased Properties from the Lease Balance. The Lessees, jointly and severally,
shall promptly reimburse the Lessor for the amount equal to such decline in
value to the extent that the Report indicates that such decline was due to
(w) extraordinary use, failure to maintain, to repair, to restore, to
rebuild or to replace, failure to comply with all Applicable Laws, failure
to use, workmanship, method of installation or removal or maintenance,
repair, rebuilding or replacement, or any other cause or condition within
the power of a Lessee to control or effect resulting in the Building
failing to be of the type and quality contemplated by the Appraisal
(excepting in each case ordinary wear and tear), or
(x) any Alteration made to, or any rebuilding of, any Leased Property
or any part thereof by any Lessee, or
(y) any restoration or rebuilding carried out by any Lessee or any
condemnation of any portion of any Leased Property pursuant to Article X of
the Lease, or
(z) any use of any Leased Property or any part thereof by any Lessee
other than as permitted by the Lease, or any act or omission constituting a
breach of any requirement, condition, restriction or limitation set forth
in the related Deed or the related Purchase Agreement.
61
ARTICLE VII.
MISCELLANEOUS
SECTION 8.1 Survival of Agreements. Subject to limitations contained in
----------------------
the Operative Documents, the representations, warranties, covenants, indemnities
and agreements of the parties provided for in the Operative Documents, and the
parties' obligations under any and all thereof, shall survive the execution and
delivery of this Master Agreement and any of the Operative Documents, the
transfer of any Land to the Lessor as provided herein (and shall not be merged
into any Deed), any disposition of any interest of the Lessor in any Leased
Property, the purchase and sale of the Notes, payment therefor and any
disposition thereof, in each case in accordance with the Operative Documents,
and shall be and continue in effect notwithstanding any investigation made by
any party hereto or to any of the other Operative Documents. Except as
expressly set forth in the Operative Documents, including, without limitation,
as set forth in Article VII hereof and in Section 17.17 of the Lease, the
representations, warranties, covenants and agreements of the parties provided
for in the Operative Documents shall terminate upon the termination or
expiration of the Operative Documents.
SECTION 8.2 Notices. Unless otherwise specified herein, all notices,
-------
requests, demands or other communications to or upon the respective parties
hereto shall be addressed to such parties at the addresses therefor as set forth
in Schedule 8.2, or such other address as any such party shall specify to the
------------
other parties hereto, and shall be deemed to have been given (i) the Business
Day after being sent, if sent by overnight courier service; (ii) the Business
Day received, if sent by messenger; (iii) the day sent, if sent by facsimile and
confirmed electronically or otherwise during business hours of a Business Day
(or on the next Business Day if otherwise sent by facsimile and confirmed
electronically or otherwise); or (iv) when received or refused, if sent by
registered or certified mail, postage prepaid; provided, however, that if any
--------
party shall refuse to accept delivery of any notice sent by messenger, such
notice shall be deemed given when tendered for delivery.
SECTION 8.3 Counterparts. This Master Agreement may be executed by the
------------
parties hereto in separate counterparts (including by facsimile), each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
62
SECTION 8.4 Amendments. No Operative Document nor any of the terms
----------
thereof may be terminated, amended, supplemented, waived or modified with
respect to any Obligor or any Funding Party, except (a) in the case of a
termination, amendment, supplement, waiver or modification to be binding on the
Lessees, with the written agreement or consent of ▇▇▇▇ Furniture, and (b) in the
case of a termination, amendment, supplement, waiver or modification to be
binding on the Funding Parties, with the written agreement or consent of the
Required Funding Parties; provided, however, that
-------- -------
(x) notwithstanding the foregoing provisions of this Section 8.4 or
-----------
clause (y) below, the consent of each Funding Party affected thereby shall be
----------
required for any amendment, modification or waiver directly:
(i) modifying any of the provisions of this Section 8.4, changing
-----------
the definition of "Required Funding Parties" or "Required Lenders", or
------------------------ ----------------
increasing the Commitment of such Funding Party;
(ii) amending, modifying, waiving or supplementing any of the
provisions of Section 3 of the Loan Agreement or the representations of
such Funding Party in Section 4.2 or 4.3 or the covenants of such Funding
----------- ---
Party in Section 6 of this Master Agreement;
---------
(iii) reducing any amount payable to such Funding Party under the
Operative Documents or extending the time for payment of any such amount,
including, without limitation, any Rent, any Funded Amount, any fees, any
indemnity, any Leased Property Balance, the Lease Balance, any Funding
Party Balance, the Recourse Deficiency Amount, interest or Yield; or
(iv) consenting to any assignment of the Lease not in compliance with
Article IX of the Lease or the extension of the Lease Term, releasing any
of the collateral assigned to the Agent and the Lenders pursuant to any
Mortgage and any Assignment of Lease and Rents (but excluding a release of
any rights that the Lenders may have in any Leased Property, or the
proceeds thereof as contemplated in the definition of "Release Date"),
releasing any Lessee from its obligations in respect of the payments of
Rent and the Lease Balance, releasing any Obligor from its obligations
under the Operative Documents or changing the absolute and unconditional
character of any such obligation; and
63
(y) no such termination, amendment, supplement, waiver or modification
shall, without the written agreement or consent of the Lessor, the Agent and the
Required Lenders, be made to the Lease or any Security Agreement and Assignment;
and
(z) subject to the foregoing clauses (x) and (y), so long as no Event
----------- ---
of Default has occurred and is continuing, the Lessor, the Agent and the Lenders
may not amend, supplement, waive or modify any terms of the Loan Agreement, the
Notes, the Mortgages and the Assignments of Lease and Rents without the consent
of the related Lessee and ▇▇▇▇ Companies (such consent not to be unreasonably
withheld or delayed); provided that in no event may any Operative Document be
--------
amended so as to increase the obligations of any Obligor, or deprive any Obligor
of any rights thereunder, without the written consent of the related Lessee and
▇▇▇▇ Companies.
SECTION 8.5 Headings, etc. The Table of Contents and headings of the
--------------
various Articles and Sections of this Master Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 8.6 Parties in Interest. Except as expressly provided herein,
-------------------
none of the provisions of this Master Agreement is intended for the benefit of
any Person except the parties hereto and their respective successors and
permitted assigns.
SECTION 8.7 GOVERNING LAW. THIS MASTER AGREEMENT HAS BEEN DELIVERED IN,
-------------
AND SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF VIRGINIA APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE.
SECTION 8.8 Expenses. Whether or not the transactions herein contemplated
--------
are consummated, each Obligor, jointly and severally, agrees to pay, as
Supplemental Rent, all actual, reasonable and documented out-of-pocket costs and
expenses of the Lessor, the Agent and the Lenders in connection with the
preparation, execution and delivery of the Operative Documents and the documents
and instruments referred to therein and any amendment, waiver or consent
relating thereto (including, without limitation, the reasonable fees and
disbursements of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, but not including any fees and
disbursements for any other outside counsel representing any Lender) and of the
Lessor,
64
the Agent and the Lenders in connection with endeavoring to enforce the
Operative Documents and the documents and instruments referred to therein
(including, without limitation, the reasonable fees actually incurred and
disbursements reasonably incurred of counsel for the Lessor and the Agent for
itself and on behalf of other Lenders.
SECTION 8.9 Severability. Any provision of this Master Agreement that is
------------
prohibited 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 any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 8.10 Liabilities of the Funding Parties. No Funding Party shall
----------------------------------
have any obligation to any other Funding Party or to Lessee with respect to the
transactions contemplated by the Operative Documents except those obligations of
such Funding Party expressly set forth in the Operative Documents or except as
set forth in the instruments delivered in connection therewith, and no Funding
Party shall be liable for performance by any other party hereto of such other
party's obligations under the Operative Documents except as otherwise so set
forth. No Lender shall have any obligation or duty to any Obligor, any other
Funding Parties or any other Person with respect to the transactions
contemplated hereby except to the extent of the obligations and duties expressly
set forth in the Operative Documents.
SECTION 8.11 Submission to Jurisdiction; Waivers. Each party hereto
-----------------------------------
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal action or
proceeding relating to this Master Agreement or any other Operative
Document, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the
Commonwealth of Virginia sitting in ▇▇▇▇▇▇▇▇▇▇ County, the courts of the
United States of America for the Western District of Virginia, and
appellate courts from any thereof;
(ii) consents that any such action or proceedings may be brought to
such courts, and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any court or that such action
or proceeding was brought in an inconvenient court and agrees not to plead
65
or claim the same;
(iii) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party
at its address set forth in Schedule 8.2 or at such other address of which
------------
the other parties hereto shall have been notified pursuant to Section 8.2;
-----------
and
(iv) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law.
SECTION 8.12 Liabilities of the Agent. The Agent shall have no duty,
------------------------
liability or obligation to any party to this Master Agreement with respect to
the transactions contemplated hereby except those duties, liabilities or
obligations expressly set forth in this Master Agreement or the Loan Agreement,
and any such duty, liability or obligations of the Agent shall be as expressly
limited by this Master Agreement or the Loan Agreement, as the case may be. All
parties to this Master Agreement acknowledge that the Agent is not, and will not
be, performing any due diligence with respect to documents and information
received pursuant to this Master Agreement or any other Operative Agreement
including, without limitation, any Environmental Audit, Title Policy or survey.
The acceptance by the Agent of any such document or information shall not
constitute a waiver by any Funding Party of any representation or warranty of
any Obligor even if such document or information indicates that any such
representation or warranty is untrue.
SECTION 8.13 Agent to Communicate with Funding Parties. Notwithstanding
-----------------------------------------
any provision to the contrary contained in any Operative Document, wherever in
any Operative Document the consent of, or notice to, any Funding Party is
required, each Obligor shall be entitled to request such consent directly from,
or give such notice directly to, the Agent on behalf of the applicable Funding
Parties, and the Agent shall thereupon be responsible for presenting such
request or forwarding such notice to the applicable Funding Parties, and for
communicating any response back to the initiating Obligor. An Obligor shall be
deemed to have complied with any requirement of requesting consent from or
providing notice to any Funding Party upon its delivery of such request or
notice to Agent in compliance with the notice provisions of the applicable
Operative Document, and such Obligor may rely on any response properly delivered
by the
66
Agent on behalf of such Funding Party to such Obligor. Nothing in this Section
shall diminish or negate the right of any Funding Party to receive notice or
provide consent under any Operative Document, but Lessee's obligation to provide
any required consent or notice shall be satisfied by providing such consent or
notice to Agent.
SECTION 8.14 Seniority of Lease. Anything contained in this Agreement or
------------------
any other Operative Document to the contrary notwithstanding, the rights of the
Lessee under the Lease are, provided that no Event of Default shall have
occurred and be continuing, prior and senior to this Agreement and the other
Operative Documents and the rights of the Agent, the Lenders and the Lessor
hereunder and thereunder whether or not the Lease (or a memorandum thereof) is
recorded prior to the recordation of any of the other Operative Documents.
67
IN WITNESS WHEREOF, the parties hereto have caused this Master Agreement to
be duly executed by their respective officers thereunto duly authorized as of
the day and year first above written.
▇▇▇▇ FURNITURE, INC., as Lessee
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Treasurer
---------------------------
S-1
THE ▇▇▇▇ COMPANIES, as Guarantor
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Assistant Treasurer
---------------------------
THE ▇▇▇▇▇▇▇▇ GOLD CO., as
Guarantor
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Treasurer
---------------------------
▇▇▇▇ PROPERTIES, INC., as
Guarantor
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Treasurer
---------------------------
STOREHOUSE, INC., as Guarantor
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Treasurer
---------------------------
HOME ELEMENTS, INC., as Guarantor
By: /s/ ▇▇▇▇▇ ▇. Angle
------------------------------
Name Printed: ▇▇▇▇▇ ▇. Angle
--------------------
Title: Treasurer
---------------------------
S-2
▇▇▇▇ DIVERSIFIED, INC., as Guarantor
By:
Name Printed:
Title:
WEXFORD COLLECTION, INC., as
Guarantor
By:
Name Printed:
Title:
S-3
ATLANTIC FINANCIAL GROUP, LTD.,
as Lessor
By: Atlantic Financial Managers,
Inc., its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: President
S-4
CRESTAR BANK, as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------
Title: Sr. Vice President
---------------------------
S-5
CRESTAR BANK, as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name Printed: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------
Title: Sr. Vice President
---------------------------
S-6
SCHEDULE 2.2
PAYMENT INSTRUCTIONS AND
AMOUNT OF EACH FUNDING PARTY'S COMMITMENT
Lessor Commitment Percentage: 3.5%
Lessor Commitment: $875,000
Lender Commitment Percentages:
Crestar Bank 96.5%
Lender Commitments: $24,125,000
SCHEDULE 8.2
ADDRESSES FOR NOTICES
▇▇▇▇ Companies/
▇▇▇▇ Furniture: The ▇▇▇▇ Companies
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. Angle
Lessor: Atlantic Financial Group, Ltd.
c/o Grogan & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Agent or Lender: Crestar Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇