Exhibit 10.1
AMENDED AND RESTATED LOAN AGREEMENT
(This Amended and Restated Loan Agreement amends, restates, and
replaces that certain Amended and Restated Loan Agreement
dated as of December 30, 2004 between the undersigned
Borrower, Lakeshore, Lakes Mall and the Bank.)
THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") is made as of
March 9, 2005 by and between CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware
limited partnership, whose address is CBL Center, Suite 500, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ("Borrower"), and LAKESHORE/SEBRING
LIMITED PARTNERSHIP, a Florida limited partnership, whose address is the same as
the Borrower's described above ("Lakeshore") and THE LAKES MALL, LLC, a Michigan
limited liability company whose address is the same as the Borrower's described
above ("Lakes Mall"), and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national
banking association organized and existing under the statutes of the United
States of America, with a principal office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Bank").
Recitals of Fact
Borrower has requested that the Bank commit to make loans and advances to
it, and to Lakeshore and to Lakes Mall, for the benefit of Borrower, on a
revolving credit basis in an amount not to exceed at any one time outstanding
the aggregate principal sum of One Hundred Million Dollars ($100,000,000.00) for
the purpose of providing working capital for pre-development expenses,
development costs, equity investments, repayment of existing indebtedness,
certain distributions to limited partners (as allowed herein), letters of credit
and construction and for general corporate purposes. The Bank has agreed to make
certain portions of such loans and advances on the terms and conditions herein
set forth. KeyBank National Association, Compass Bank, Amsouth Bank of Tennessee
and Branch Banking and Trust Company, all as participants in the Loan have
previously agreed to make certain portions of such loan and advances on the
terms and conditions previously set forth and now on the terms and conditions
herein set forth.
This Loan Agreement is currently being amended to: (a) increase the loan
from Eighty Million Dollars ($80,000,000.00) to One Hundred Million Dollars
($100,000,000.00); (b) change certain financial covenants; and (c) to extend the
maturity date of the Loan to June 1, 2007.
NOW, THEREFORE, incorporating the Recitals of Fact set forth above and in
consideration of the mutual agreements herein contained, the parties agree as
follows:
AGREEMENTS
SECTION 1: DEFINITIONS AND ACCOUNTING TERMS
1.1 Certain Defined Terms. For the purposes of this Loan Agreement, the
following terms shall have the following meanings (such meanings to be
applicable equally to both the singular and plural forms of such terms) unless
the context otherwise requires:
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"Adjusted Asset Value" means, as of a given date, the sum of: (a)(i) EBITDA
attributable to malls and power centers for the fiscal quarter most recently
ended times (ii) 4; divided by (iii) 8.25% plus (b)(i) EBITDA attributable to
all other assets for the fiscal quarter most recently ended times (ii) 4;
divided by (iii) 9.25%. In determining Adjusted Asset Value (i) EBITDA
attributable to real estate properties acquired during such fiscal quarter, and
EBITDA attributable to Properties development of which was completed during such
fiscal quarter, shall be disregarded, (ii) EBITDA attributable to any Property
which is currently under development shall be excluded, (iii) with respect to
any Subsidiary that is not a Wholly Owned Subsidiary, only the Borrower's
Ownership Share of the EBITDA attributable to such Subsidiary shall be used when
determining Adjusted Asset Value, and (iv) EBITDA shall be attributed to malls
and power centers based on the ratio of (x) revenues less property operating
expenses (to be determined exclusive of interest expense, depreciation and
general and administrative expenses) of malls and power centers to (y) total
revenues less total property operating expenses (similarly determined), such
revenues and expenses to be determined on a quarterly basis in a manner
consistent with the Parent's method of reporting of segment information in the
notes to its financial statements for the fiscal quarter ended September 30,
2004 as filed with the Securities and Exchange Commission, and otherwise in a
manner reasonably acceptable to the Bank. In addition, in the case of any
operating Property acquired in the immediately preceding period of eighteen (18)
consecutive months for a purchase price indicative of a capitalization rate of
less than 8.25%, EBITDA attributable to such Property shall be excluded from the
determination of Adjusted Asset Value.
"Adjusted Loan Amount" means the lesser of (a) 75% of the Appraised Value
the real estate and improvements described in the Mortgages (excluding the Lakes
Mall Mortgage), plus 67.5% of the value of the real estate and improvements
described in the Lakes Mall Mortgage; or (c) the Permanent Loan Estimate of all
Collateral Properties; or (c) $100,000,000.00.
"Affiliate" means as to any Person, any other Person which, directly or
indirectly, owns or controls, on an aggregate basis including all beneficial
ownership and ownership or control as a trustee, guardian or other fiduciary, at
least ten percent (10%) of the outstanding shares of Capital Stock or other
ownership interest having ordinary voting power to elect a majority of the board
of directors or other governing body (irrespective of whether, at the time,
stock of any other class or classes of such corporation shall have contingency)
of such Person or at least ten percent (10%) of the partnership or other
ownership interest of such Person; or which controls, is controlled by or is
under common control with such Person. For the purposes of this definition,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of management and policies, whether through the ownership
of voting securities, by contract or otherwise. Notwithstanding the foregoing, a
pension fund, university or other endowment funds, mutual fund investment
company or similar fund having a passive investment intent owning such a ten
percent (10%) or greater interest in a Person shall not be deemed an Affiliate
of such Person unless such pension, mutual, endowment or similar fund either (i)
owns fifty percent (50%) or more of the Capital Stock or other ownership
interest in such Person, or (ii) has the right or power to select one or more
members of such Person's board of directors or other governing body.
"Agreement Date" means the date as of which this Loan Agreement is dated.
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"Applicable Law" means, in respect of any Person, all provisions of
statutes, rules, regulations and orders of any governmental authority applicable
to such Person, and all orders and decrees of all courts and arbitrators in
proceedings or actions in which the person in question is a party.
"Bank's Proportionate Share" means the Bank's undivided participating
interest in the Loan which shall be equal to Twenty Five Million and NO/100
Dollars ($25,000,000.00).
"Base Rate" means the base commercial rate of interest established from
time to time by Bank. The Base Rate existing as of the date hereof is five and
fifty hundredths percent (5.50%) per annum.
"Borrower" has the meaning set forth in the introductory paragraph hereof
and shall include the Borrower's successors and permitted assigns.
"Borrowing Base" is the limitation on the aggregate Revolving Credit Loan
indebtedness which may be outstanding at any time during the term of this Loan
Agreement. The Borrowing Base will normally be calculated each July 1, January
1, April 1 and October 1 but shall be subject to recalculation upon the
occurrence of any extraordinary event, such as the addition or release of any
collateral, or an extraordinary event that materially affects the value of any
collateral. The Borrowing Base will be an amount not to exceed the Adjusted Loan
Amount.
"Borrowing Base Certificate" means a report certified by the controller or
chief financial officer or Senior Vice President of the Borrower, setting forth
the calculations required to establish the Borrowing Base as of a specified
date, all in form and detail reasonably satisfactory to Bank.
"Business Day" means a banking business day of the Bank and which is also a
day on which dealings are carried on in the interbank eurodollar market.
"Capital Stock" shall mean, as to any Person, any and all shares,
interests, warrants, participations or other equivalents (however designated) of
corporate stock of such Person.
"CBL Holdings I" means CBL Holdings I, Inc., a Delaware corporation and the
sole general partner of Borrower, and shall include CBL Holdings It's successors
and permitted assigns.
"CBL Holdings II" means CBL Holdings II, Inc., a Delaware corporation and a
limited partner of Borrower, and shall include CBL Holdings, its successors and
permitted assigns.
"CBL & Associates Management, Inc." means CBL & Associates Management,
Inc., a Delaware corporation, and shall include CBL & Associates Management,
Inc.'s successors and permitted assigns.
"CBL Mortgage" means the mortgages and/or deeds of trust with security
agreements and assignments of rents and leases and related amendments executed
by Borrower, Walnut Square Associates Limited Partnership, Lakeshore/Sebring
Limited Partnership, Vicksburg Mall Associates, Ltd., The Lakes Mall, LLC and
Towne Mall and/or any other entity related to or owned by Borrower and/or Parent
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and/or CBL Holdings I in favor of Bank covering their interest in the properties
described in Exhibit "A," attached hereto and made a part hereof.
"Closing Date" means the date of this Loan Agreement set out in the first
paragraph of this Loan Agreement.
"Collateral Document" means any Guaranty, the CBL Mortgage, any security
deed, mortgage, deed of trust, assignment of leases and rents, any property
management contract assignments, and any other security agreement, financing
statement, or other document, instrument or agreement creating, evidencing or
perfecting the Bank's Liens in any of the Collateral.
"Collateral Property" means the property described in the CBL Mortgage.
"Credit Agreement" means the Credit Agreement dated as of July 28, 1994 and
as amended by amendments dated as of May 5, 1995, July 5, 1995 and subsequent
amendments among the Borrower, ▇▇▇▇▇ Fargo and others.
"Debt Service" means, with respect to a Person and for a given period, the
sum of the following:
(a) such Person's Interest Expense for such period; (b) regularly scheduled
principal payments on Indebtedness of such Person made during such period, other
than any balloon, bullet or similar principal payment payable on any
Indebtedness of such Person which repays such Indebtedness in full; and (c) such
Person's Ownership Share of the amount of any payments of the type described in
the immediately preceding clause (b) of Unconsolidated Affiliates of such
Person.
"Default Rate" means the rate of interest described in the Note, which
shall accrue at the Bank's option after the occurrence of an Event of Default
which remains uncured after any applicable grace period.
"EBITDA" means, for any period, net income (loss) of the Parent and its
Subsidiaries determined on a consolidated basis for such period excluding the
following amounts (but only to the extent included in determining net income
(loss) for such period and without duplication):
(a) depreciation and amortization expense and other non-cash charges for
such period less depreciation and amortization expense allocable to minority
interest in Subsidiaries of the Borrower for such period;
(b) interest expense for such period less interest expense allocable to
minority interest in Subsidiaries of the Borrower for such period;
(c) minority interest in earnings of the Borrower for such period;
(d) extraordinary and nonrecurring net gains or losses (other than gains or
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losses from the sale of outparcels of Properties) for such period and expense
relating to the extinquishments of Indebtedness for such period;
(e) net gains or losses on the disposal of discontinued operations for such
period;
(f) expenses incurred during such period with respect to any real estate
project abandoned by the Parent or any Subsidiary in such period;
(g) income tax expense in respect of such period;
(h) the Parent's Ownership Share of depreciation and amortization expense
and other non-cash charges of Unconsolidated Affiliates of the Parent for such
period; and
(i) the Parent's Ownership Share of interest expense of Unconsolidated
Affiliates of the Parent for such period; and; and
(j) non-cash impairment charges as defined by Financial Accounting
Standards Board (FASB) Statement 144 Accounting for the Impairment or Disposal
of Long-Lived Assets.
"Effective Date," which definition is used and only applies within Section
7.12 hereof, means the date the Credit Agreement became effective in accordance
with Section 4.1 thereof.
"Environmental Laws" means all applicable local, state or federal laws,
rules or regulations pertaining to environmental regulation, contamination or
cleanup, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act of 1976 or any state lien or superlien or environmental cleanup
statutes all as amended from time to time.
"Equity Interest" means, with respect to any Person, any share of Capital
Stock of (or other ownership or profit interests in) such Person, any warrant,
option or other right for the purchase or other acquisition from such Person of
any share of Capital Stock of (or other ownership or profit interests in) such
Person, any security convertible into or exchangeable for any share of Capital
Stock of (or other ownership or profit interests in) such Person or warrant,
right or option for the purchase or other acquisition from such Person of such
shares (or such other interests), and any other ownership or profit interest in
such Person (including, without limitation, partnership, member or trust
interests therein), whether voting or nonvoting, whether or not certificated and
whether or not such share, warrant, option, right or other interest is
authorized or otherwise existing on any date of determination.
"Equity Issuance" means any issuance or sale by a Person of any Equity
Interest.
"Event of Default" has the meaning assigned to that phrase in Section 8.
"Extension of Credit" means, with respect to a Person, any of the
following, whether secured or unsecured: (a) loans to such Person, including
without limitation, lines of credit and mortgage loans; (b) bonds, debentures,
notes and similar instruments issued by such Person; (c) reimbursement
obligations of such Person under or in respect of any letter of credit; and (d)
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any of the foregoing of other Persons, the payment of which such Person
Guaranteed or is otherwise recourse to such Person.
"Funds from Operations" means, as to any period, on a consolidated basis,
an amount equal to (a) income (loss) from operations of Borrower, Parent and
their respective Subsidiaries for such period, plus (b) depreciation and
amortization from consolidated and unconsolidated property, plus depreciation
and amortization from property included in discontinued operation, plus (c) to
the extent not included in clause (a) above, gain (loss) on the sales of
outparcels made in the ordinary course of business, minus (d) Minority investors
share of depreciation and amortization of certain property, minus (e) Minority
investors share of income from certain property, minus (f) depreciation and
amortization from non-real estate property, plus (g) income from operations of
Unconsolidated Affiliates and discontinued operations determined in each case in
accordance with GAAP. Adjustments for Unconsolidated Affiliates will be
calculated to reflect funds from operations on the same basis.
"GAAP" means United States generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity, including without limitation, the Securities
and Exchange Commission, as may be approved by a significant segment of the
accounting profession, which are applicable to the circumstances as of the date
of determination.
"Gross Asset Value" means, at a given time, the sum (without duplication)
of the following:
(a) Adjusted Asset Value at such time;
(b) all cash and cash equivalents of the Parent and its Subsidiaries
determined on a consolidated basis as of the end of the fiscal quarter most
recently ended (excluding tenant deposits and other cash and cash equivalents
the disposition of which is restricted in any way (other than restrictions in
the nature of early withdrawal penalties));
(c) with respect to any Property which is under construction or the
development of which was completed during the fiscal quarter most recently
ended, the book value of construction in process as determined in accordance
with GAAP for all such Properties at such time (including without duplication
the Parent's Ownership Share of all construction in process of Unconsolidated
Affiliates of the Parent);
(d) the book value of all unimproved real property of the Parent and its
Subsidiaries determined on a consolidated basis;
(e) the purchase price paid by the Parent or any Subsidiary (less any
amounts paid to the Parent or such Subsidiary as a purchase price adjustment,
held in escrow, retained as a contingency reserve, or other similar
arrangements) as required to be disclosed in a consolidated balance sheet
(including the notes thereto) of the Parent for:
(i) any Property (other than a property under development) acquired by
the Parent or such Subsidiary during the Parent's fiscal quarter most
recently ended; and
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(ii) any operating Property acquired in the immediately preceding
period of eighteen (18) consecutive months for a purchase price
indicative of a capitalization rate of less than 8.25%; provided, that
if the Parent or a Subsidiary acquired such Property together with
other Properties or other assets and paid an aggregate purchase price
for such Properties and other assets, then the Parent shall allocate
the portion of the aggregate purchase price attributable to such
Property in a manner consistent with reasonable accounting practices;
provided further in no event shall the aggregate of value of such
operating Properties included in the Gross Asset Value pursuant to
this clause (e)(ii) exceed $1,000,000,000.00;
(f) with respect to any purchase obligation, repurchase obligation or
forward commitment evidenced by a binding contract included when determining the
Total Liabilities of the Parent and its Subsidiaries, the reasonably determined
value of any amount that would be payable, or property that would be
transferable, to the Parent or any Subsidiary if such contract were terminated
as of such date; and
(g) to the extent not included in the immediately preceding clauses (a)
through (f), the value of any real property owned by a Subsidiary (that is not a
Wholly Owned Subsidiary) of the Borrower or an Unconsolidated Affiliate of the
Borrower (such Subsidiary or Unconsolidated Affiliate being a "JV") and which
property secures Recourse Indebtedness of such JV. For purposes of this clause
(g):
(x) the value of such real property shall be the lesser of (A) the
Permanent Loan Estimate which would be applicable to such real
property were such property a Collateral Property and (B) the amount
of Recourse Indebtedness secured by such real property;
(y) in no event shall the aggregate value of such real property
included in Gross Asset Value pursuant to this clause (g) exceed
$500,000,000.00; and
(z) the value of any such real property shall only be included in
Gross Asset Value if the organizational documents of such JV provide
that if, and to the extent, such Indebtedness is paid by the Borrower
or a Subsidiary of the Borrower or by resort to such real property,
then the Borrower or a Subsidiary of the Borrower shall automatically
acquire, without the necessity of any further payment or action, all
Equity Interests in such JV not owned by the Borrower or any
Subsidiary.
"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation
means and includes (a) a guaranty (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), directly or
indirectly, in any manner, of any part or all of such obligation, or (b) an
agreement, direct or indirect, contingent or otherwise, and whether or not
constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation.
"Hazardous Substances" shall mean and include all hazardous and toxic
substances, wastes or materials, any pollutants or contaminants (including,
without limitation, asbestos and raw materials which include hazardous
constituents), or any other similar substances or materials which are included
under or regulated by any applicable Environmental Laws.
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"Indebtedness" means, with respect to a Person, at the time of computation
thereof, all of the following (without duplication):
(a) all obligations of such Person in respect of money borrowed;
(b) all obligations of such Person (other than trade debt incurred in the
ordinary course of business), whether or not for money borrowed:
(i) represented by notes payable, or drafts accepted, in each case
representing extensions of credit,
(ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales
contracts, title retention debt instruments or other similar
instruments, upon which interest charges are customarily paid or that
are issued or assumed as full or partial payment for property;
(c) capitalized lease obligations of such Person;
(d) all reimbursement obligations of such Person under or in respect of any
letters of credit or acceptances (whether or not the same have been presented
for payment); and
(e) all Indebtedness of other Persons which (i) such Person has guaranteed
or is otherwise recourse to such Person or (ii) is secured by a Lien on any
property of such Person.
"Interest Expense" means, with respect to a Person and for any period,
(a) the total interest expense (including, without limitation, interest
expense attributable to capitalized lease obligations) of such Person and in any
event shall include all letter of credit fees amortized as interest expense and
all interest expense with respect to any Indebtedness in respect of which such
Person is wholly or partially liable whether pursuant to any repayment, interest
carry, performance Guarantee or otherwise, plus
(b) to the extent not already included in the foregoing clause (a) such
Person's Ownership Share of all paid or accrued interest expense for such period
of Unconsolidated Affiliates of such Person.
Interest Expense allocable to minority interest in Subsidiaries of the
Borrower shall be excluded from Interest Expense of the Parent and its
Subsidiaries when determined on a consolidated basis.
"Investment" means, with respect to any Person, any acquisition or
investment (whether or not of a controlling interest) by such Person, whether by
means of (a) the purchase or other acquisition of any Equity Interest in another
Person, (b) a loan, advance or extension of credit to, capital contribution to,
Guaranty of Indebtedness of, or purchase or other acquisition of any
Indebtedness of, another Person, including any partnership or joint venture
interest in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute the business or a division or operating unit of another Person. Any
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commitment or option to make an Investment in any other Person shall constitute
an Investment. Except as expressly provided otherwise, for purposes of
determining compliance with any covenant contained in a Loan Document, the
amount of any Investment shall be the amount actually invested, without
adjustment for subsequent increases or decreases in the value of such
Investment.
"Lakeshore Note" means the promissory note from Lakeshore in the original
principal sum of $34,600,000.00 payable to the order of ▇▇▇▇▇ Fargo, later
assigned by ▇▇▇▇▇ Fargo to Shopping Center Finance Corp., and later assigned by
Shopping Center Finance Corp. to the Bank, such Promissory Note being now for
the principal sum of $20,400,000.00, as amended, renewed, or replaced from time
to time, but it does not include the Renewal of Promissory Note dated December
6, 1994 to be effective April 1, 1994.
"Lakeshore Mortgage" means the Florida Mortgage from Lakeshore/Sebring
Limited Partnership in favor of ▇▇▇▇▇ Fargo later assigned to Shopping Center
Finance Corp. and subsequently assigned to the Bank, as amended from time to
time.
"Lakes Mall Note" means the promissory note from Lakes Mall in the original
principal sum of $38,100,000.00 payable to U.S. Bank National Association later
assigned on March 18, 2002 to Mortgage Holdings, LLC and later assigned to the
Bank, as amended from time to time.
"Lakes Mall Mortgage" means the Michigan Mortgage from Lakes Mall in favor
of U.S. Bank National Association later assigned on March 18, 2002 to Mortgage
Holdings, LLC and later assigned to the Bank, as amended from time to time.
"Letter of Credit Documents" means, with respect to any letter of credit
issued in connection with the Loan, collectively, any application therefor, any
certificate or other document presented in connection with a drawing under such
letter of credit and any other agreement, instrument or other document governing
or providing for (a) the rights and obligations of the parties concerned or at
risk with respect to such letter of credit or (b) any collateral security for
any of such obligations.
"LIBOR Rate" means the London Interbank Offered Rates as established from
time to time and published in The Wall Street Journal, Money Rates Section
which, unless otherwise specified herein or in the Note, is a one (1) month
LIBOR Rate.
"Lien" as applied to the property of any Person means: (a) any security
interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment
of leases and rents, pledge, lien, charge or lease constituting a capitalized
lease obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
Person, or upon the income, rents or profits therefrom; (b) any arrangement,
express or implied, under which any property of such Person is transferred,
sequestered or otherwise identified for the purpose of subjecting the same to
the payment of Indebtedness or performance of any other obligation in priority
to the payment of the general, unsecured creditors of such Person; (c) the
filing of any financing statement under the UCC or its equivalent in any
jurisdiction; and (d) any agreement by such Person to grant, give or otherwise
convey any of the foregoing.
"Loan" means the Revolving Credit Loan from the Bank to the Borrower.
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"Loan Agreement" means this Loan Agreement between the Borrower, Lakeshore,
Lakes Mall and the Bank, and any modifications, amendments, or replacements
thereof, in whole or in part.
"Loan Document" means this Loan Agreement, each Note, each Collateral
Document, each Letter of Credit Document and each other document or instrument
now or hereafter executed and delivered by a Loan Party or the Parent in
connection with, pursuant to or relating to this Loan Agreement.
"Loan Party" means Borrower, Parent, and each other Person who guarantees
all or a portion of the Loan and/or who pledges any Collateral to secure all or
a portion of the Loan.
"Maximum Rate" means the maximum variable contract rate of interest which
the Bank may lawfully charge under applicable statutes and laws from time to
time in effect.
"Mortgages" or "Mortgage" means a mortgage, deed of trust, deed to secure
debt or similar security instrument made or to be made by a Person owning real
estate or an interest in real estate granting a Lien on such real estate or
interest in real estate as security for the payment of indebtedness.
"Net Operating Income" means, for any Collateral Property and for the
period of twelve (12) consecutive calendar months most recently ending, the sum
of the following (without duplication):
(a) rents and all other revenues received in the ordinary course from such
Property (including proceeds of rent loss insurance but excluding pre-paid rents
and revenues and security deposits except to the extent applied in satisfaction
of tenants' obligations for rent); minus
(b) all expenses paid related to the ownership, operation or maintenance of
such Property, including without limitation, taxes and assessments, insurance,
utilities, payroll costs, maintenance, repair and landscaping expenses and
marketing expenses; minus
(c) an amount equal to (i) the aggregate square footage of all owned space
of such Property times (ii) $0.20; minus.
(d) an imputed management fee in the amount of three percent (3.0%) of the
aggregate base rents and percentage rents received for such Property for such
period.
"Net Proceeds" means with respect to an Equity Issuance by a Person, the
aggregate amount of all cash received by such Person in respect of such Equity
Issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"Newly Acquired Property" means Property acquired by Borrower, Parent
and/or their respective Subsidiaries during any fiscal quarter for which
compliance with financial covenants is being tested.
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"Nonrecourse Indebtedness" means, with respect to a Person, an Extension of
Credit or other Indebtedness in respect of which recourse for payment (except
for customary exceptions for fraud, misapplication of funds, environmental
indemnities, and other similar customary exceptions to recourse liability) is
contractually limited to specific assets of such Person encumbered by a Lien
securing such Extension of Credit or other Indebtedness.
"Note" or "Notes" means the revolving credit notes executed by the Borrower
to the Bank in the original principal sums of Fifteen Million Dollars
($15,000,000.00) (the "$15,000,000.00 Note"), of Twenty Six Million Five Hundred
Thousand and No/100 Dollars ($26,500,000.00) (the "$26,500,000.00 Note"),
respectively, the Lakeshore Note and the Lakes Mall Note, as such note or notes
may be modified, renewed or extended from time to time; and any other note or
notes executed at any time to evidence the indebtedness under this Loan
Agreement, in whole or in part, and any renewals, modifications and extensions
thereof, in whole or in part.
"Off-Balance Sheet Liabilities" means liabilities and obligations of the
Parent, the Borrower, any Subsidiary or any other Person in respect of
"off-balance sheet arrangements" (as defined in the SEC Off-Balance Sheet Rules)
which the Parent would be required to disclose in the "Management's Discussion
and Analysis of Financial Condition and Results of Operations" section of the
Parent's report on Form 10-Q or Form 10-K (or their equivalents) which the
Parent would be required to file with the Securities and Exchange Commission (or
any Governmental Authority substituted therefor). As used in this definition,
the term "SEC Off-Balance Sheet Rules" means the Disclosure in Management's
Discussion and Analysis About Off-Balance Sheet Arrangements, Securities Act
Release No. 33-8182,68 Fed. Reg. 5982 (Feb. 5, 2003) (to be codified at 17 CFR
pts. 228, 229 and 249).
"Ownership Share" means, with respect to any Subsidiary of a Person (other
than a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the
greater of (a) such Person's relative nominal direct and indirect ownership
interest (expressed as a percentage) in such Subsidiary or Unconsolidated
Affiliate or (b) subject to compliance with Section 9.4 of the Credit Agreement,
such Person's relative direct and indirect economic interest (calculated as a
percentage) in such Subsidiary or Unconsolidated Affiliate determined in
accordance with the applicable provisions of the declaration of trust, articles
or certificate of incorporation, articles of organization, partnership
agreement, joint venture agreement or other applicable organizational document
of such Subsidiary or Unconsolidated Affiliate.
"Parent" means CBL & Associates Properties, Inc., a Delaware corporation
and a qualified public REIT and formerly until March 31, 1997 the sole general
partner of Borrower and shall include the Parent's successors and permitted
assigns.
"Participant" means each of the following to the extent each of the
following owns an interest in the Loan pursuant to the Participation Agreement:
Compass Bank, AmSouth Bank, Branch Banking and Trust Company and Manufacturers
and Traders Trust Company, their respective successors and assigns, and any
other participants in the Loan.
"Participant's Proportionate Share (AmSouth)" means AmSouth Bank's (or any
successor to such bank's interest in the Loan) undivided participating interest
in the Loan and the letters of credit issued hereunder which, as of the date of
this Loan Agreement, shall be equal to Twenty Five Million and NO/100 Dollars
($25,000,000.00) divided by One Hundred Million Dollars ($100,000,000.00).
11
"Participant's Proportionate Share (BB&T)" means Branch Banking and Trust
Company's (or any successor to such bank's interest in the Loan) undivided
participating interest in the Loan and the letters of credit issued hereunder
which, as of the date of this Loan Agreement, shall be equal to Fifteen Million
Dollars ($15,000,000.00) divided by One Hundred Million Dollars
($100,000,000.00).
"Participant's Proportionate Share (Compass)" means Compass Bank's, (or any
successor to such bank's interest in the Loan) undivided participating interest
in the Loan and the letters of credit issued hereunder which, as of the date of
this Loan Agreement, shall be equal to Fifteen Million and NO/100 Dollars
($15,000,000.00) divided by One Hundred Million Dollars ($100,000,000.00).
"Participant's Proportionate Share (M&T)" means Manufacturers and Traders
Trust Company (or any successor to such bank's interest in the Loan) undivided
participating interest in the Loan and the letters of credit issued hereunder
which, as of the date of this Loan Agreement, shall be equal to Twenty Million
and NO/100 Dollars ($20,000,000.00) divided by One Hundred Million Dollars
($100,000,000.00).
"Participants' Proportionate Share" means Participant's Proportionate Share
(M&T), Participant's Proportionate Share (Compass), Participant's Proportionate
Share (AmSouth) and Participant's Proportionate Share (BB&T), as such
proportionate shares may change from time to time pursuant to the Participation
Agreement.
"Participation Agreement" means that certain Participation Agreement
entered into of even date herewith among Bank, M&T, Compass Bank, AmSouth Bank
of Tennessee and Branch Banking and Trust Company and/or any other participants
in the Loan, as amended from time to time.
"Permanent Loan Estimate" means, as of any date of determination and with
respect to any Collateral Property, an amount equal to (a) the Net Operating
Income of such Collateral Property divided by (b) the product of (i) 1.25 and
(ii) the mortgage constant for a 25-year loan bearing interest at a per annum
rate equal to the average rate published in the United States Federal Reserve
Statistical Release (1-1.15) for 10-year Treasury Constant Maturities during the
previous four fiscal quarters plus 1.5%.
"Permitted Encumbrances" shall mean and include:
(a) liens for taxes, assessments or similar governmental charges not in
default or being contested in good faith by appropriate proceedings;
(a) workmen's, vendors', mechanics' and materialmen's liens and other liens
imposed by law incurred in the ordinary course of business, and easements and
encumbrances which are not substantial in character or amount and do not
materially detract from the value or interfere with the intended use of the
properties subject thereto and affected thereby;
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(b) liens in respect of pledges or deposits under social security laws,
worker's compensation laws, unemployment insurance or similar legislation and in
respect of pledges or deposits to secure bids, tenders, contracts (other than
contracts for the payment of money), leases or statutory obligations;
(c) any liens and security interests specifically listed and described in
Exhibit "B" hereto attached or in any exhibit describing permitted exceptions
and attached to any CBL Mortgage;
(d) such other liens and encumbrances to which Bank shall consent in
writing; and
(e) leases, licenses, rental agreements or other agreements for use and
occupancy of the subject property.
"Person" means an individual, corporation, partnership, limited liability
company, association, trust or unincorporated organization, or a government or
any agency or political subdivision thereof
"Project" or "Projects," which definition is used and only applies within
Section 7.12 hereof, means the real estate projects owned by Borrower, a Wholly
Owned Subsidiary or, to the extent approved by the Bank, any other Person.
"Project" shall also mean any one of the Projects.
"Property" or "Properties" means a parcel (or group of related parcels) of
real property developed (or to be developed) for use as regional mall or retail
strip shopping center and any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible..
"Recourse Indebtedness" means any Indebtedness other than Nonrecourse
Indebtedness.
"Related Entities" or "Related Entity" means any entity which executed a
promissory note, guaranty or mortgage, deed of trust, deed to secure debt or any
other collateral or security documents in connection with or as a part of the
Loan.
"Revolving Credit Advances" means advances of principal on the Revolving
Credit Loan by the Bank under the terms of this Loan Agreement to the Borrower
during the term of the Revolving Credit Loan pursuant to Section 3.1.
"Revolving Credit Loan" means the aggregate of the Borrower's, Lakeshore's
and Lakes Mall's indebtedness to the Bank pursuant to Section 2 of this Loan
Agreement.
"Subsidiary" or "Subsidiaries" means, for any Person, any corporation,
partnership, limited liability company or other entity of which at least a
majority of the securities or other ownership interests having by the terms
thereof ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions of such corporation, partnership or
other entity (without regard to the occurrence of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person.
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"Tangible Net Worth" means, as of a given date, the stockholders' equity of
the Parent and its Subsidiaries determined on a consolidated basis plus (x)
increases in accumulated depreciation accrued after September 30, 2004 and (y)
minority interests in the Borrower minus (to the extent reflected in determining
stockholders' equity of the Parent and its Subsidiaries): (a) the amount of any
write-up in the book value of any assets contained in any balance sheet
resulting from revaluation thereof or any write-up in excess of the cost of such
assets acquired, and (b) all amounts appearing on the assets side of any such
balance sheet for assets which would be classified as intangible assets under
GAAP, all determined on a consolidated basis.
"Termination Date of Revolving Credit Loan" shall mean the earlier of (a)
June 1, 2007, or in the event that the Bank and Borrower shall hereafter
mutually agree in writing that the Revolving Credit Loan and the Bank's
commitment hereunder shall be extended to another date, such other date mutually
agreed upon between Bank and Borrower to which the Bank's commitment shall have
been extended, or (b) the date as of which Borrower shall have terminated the
Bank's commitment under the provisions of Section 2.5 hereof.
"Total Liabilities" means, as to any Person as of a given date, all
liabilities which would, in conformity with GAAP, be properly classified as a
liability on a consolidated balance sheet of such Person as of such date, and in
any event shall include (without duplication and whether or not a liability
under GAAP) all of the following:
(a) all letter of credits of such Person;
(b) all purchase and repurchase obligations and forward commitments
evidenced by binding contracts, including forward equity commitments and
contracts to purchase real property, reasonably determined to be owing under any
such contract assuming such contract were terminated as of such date;
(c) all quantifiable contingent obligations of such Person including,
without limitation, all Guarantees of Indebtedness by such Person and exposure
under swap agreements;
(d) all Off-Balance Sheet Liabilities of such Person and the Ownership
Share of the Off-Balance Sheet Liabilities of Unconsolidated Affiliates of such
Person;
(e) all Indebtedness of Subsidiaries of such Person, provided that
Indebtedness of a Subsidiary that is not a Wholly Owned Subsidiary shall be
included in Total Liabilities only to the extent of the Borrower's Ownership
Share of such Subsidiary (unless the Borrower or a Wholly Owned Subsidiary of
the Borrower is otherwise obligated in respect of such Indebtedness); and
(f) such Person's Ownership Share of the Indebtedness of any Unconsolidated
Affiliate of such Person. For purposes of this definition:
(1) Total Liabilities shall not include Indebtedness with respect to
letters of credit if, and to the extent, such letters of credit are issued
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(i) to secure obligations to municipalities to perform work in
connection with construction of projects, such exclusion under this
clause (i) to be to the extent there are reserves for such obligations
under the construction loan for the applicable project;
(ii) in support of permanent loan commitments, in lieu of a deposit;
(iii) as a credit enhancement for Indebtedness incurred by an
Subsidiary of Borrower, but only to the extent such Indebtedness is
already included in Total Liabilities; or
(iv) as a credit enhancement for Indebtedness incurred by a Person
which is not an Affiliate of Borrower, such exclusion under this
clause (iv) to be to the extent of the value of any collateral
provided by such Person to secure such letter of credit.
(2) obligations under short-term repurchase agreements entered into as part
of a cash management program shall not be included as Total Liabilities;
(3) all items included in line item "Accounts Payable and Accrued
Liabilities" under the category of "Liabilities and Shareholder's Equity" in the
Consolidated Balance Sheets included in the Parent's Form 10-Q or Form 10-K (or
their equivalent) filed with the Securities and Exchange Commission (or any
Governmental Authority substituted therefor) shall not be included as Total
Liabilities.
"Towne Mall Mortgage" means the Ohio Mortgage from Towne Mall in favor of
the Bank, as amended from time to time.
"UCC" means the Uniform Commercial Code as in effect in any applicable
jurisdiction.
"Unconsolidated Affiliate" means, with respect to any Person, any other
Person in whom such Person holds an Investment, which Investment is accounted
for in the financial statements of such Person on an equity basis of accounting
and whose financial results would not be consolidated under GAAP with the
financial results of such Person on the consolidated financial statements of
such Person.
"▇▇▇▇▇ Fargo" means ▇▇▇▇▇ Fargo Realty Advisors Funding, Incorporated, a
Colorado corporation.
"Wholly Owned Subsidiary" means any Subsidiary of a Person in respect of
which all of the equity securities or other ownership interests (other than, in
the case of a corporation, directors' qualifying shares) are at the time
directly or indirectly owned or controlled by such Person or one or more other
Subsidiaries of such Person or by such Person and one or more other Subsidiaries
of such Person.
1.2 Accounting Terms. All accounting terms not specifically defined herein
shall be construed in accordance with generally accepted accounting principles
consistent with those applied in the preparation of the financial statements
required to be delivered from time to time pursuant to Section 6.5 hereof.
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SECTION 2: COMMITMENT; FUNDING AND TERMS OF REVOLVING CREDIT LOAN
2.1 The Commitment. Subject to the terms and conditions herein set out,
Bank agrees and commits to make loan advances to and issue letters of credit for
the account of the Borrower, Lakeshore and Lakes Mall from time to time, from
the Closing Date until the Termination Date of Revolving Credit Loan, in an
aggregate principal amount of the loan advances and the face amount of any
letters of credit not to exceed, at any one time outstanding, the lesser of (a)
One Hundred Million Dollars ($100,000,000.00); or (b) the Borrower's Borrowing
Base, as defined in Section 1.
2.2 Funding the Loan. Each loan advance hereunder shall be made upon the
written request of the Borrower to the Bank, specifying the date and amount and
intended use thereof. All advances hereunder, whether under any of the Notes,
shall be made by depositing the same to the checking account of Borrower at the
Bank or other methods acceptable to Borrower and Bank. LAKESHORE ACKNOWLEDGES
AND AGREES THAT NO ADVANCES SHALL BE MADE DIRECTLY TO LAKESHORE EXCEPT UPON THE
EXPRESS WRITTEN CONSENT OF THE BORROWER RECEIVED BY THE BANK PRIOR TO THE
ADVANCE BEING MADE. LAKES MALL ACKNOWLEDGES AND AGREES THAT NO ADVANCES SHALL BE
MADE DIRECTLY TO LAKES MALL EXCEPT UPON THE EXPRESS WRITTEN CONSENT OF THE
BORROWER RECEIVED BY THE BANK PRIOR TO THE ADVANCE BEING MADE.
2.3 The Note and Interest. The Revolving Credit Loan shall be evidenced by
two (2) promissory notes of the Borrower, one (1) promissory note of Lakeshore
and one (1) promissory note of Lakes Mall, each payable to the order of the Bank
in the aggregate principal amount of One Hundred Million Dollars
($100,000,000.00), in form substantially the same as the copy of the Notes,
attached hereto as Exhibit "C." The entire principal amount of the Loan shall be
due and payable on the Termination Date of Revolving Credit Loan. The unpaid
principal balances of the Revolving Credit Loan shall bear interest from the
Closing Date on disbursed and unpaid principal balances (calculated on the basis
of a year of 365 or 366 days as is appropriate) at a rate per annum as specified
in the Note. Said interest shall be payable monthly on the first day of each
month after the Closing Date, commencing April 1, 2005. The Bank shall mail to
the Borrower a billing notice at least ten (10) days prior thereto setting forth
the payment amount next due, but any failure to send such notice shall not
relieve the Borrower, Lakeshore or Lakes Mall of the obligation to pay accrued
interest. The final installment of interest, together with the entire
outstanding principal balance of the Revolving Credit Loan, shall be due and
payable on the Termination Date of Revolving Credit Loan. The first selection of
the one (1) month, three (3) months, six (6) months or, if funds are available
in the interbank eurodollar market, twelve (12) months LIBOR Rate shall be made
by the Borrower, Lakeshore and Lakes Mall (but the rate selected by Lakeshore
and Lakes Mall must always be the same as the rate selected by the Borrower) on
or prior to the date of the Note and each selection thereafter shall be made at
least twenty four (24) hours prior to the end of the then applicable interest
rate period. Neither the Borrower, Lakeshore nor Lakes Mall may ever select a
rate period which exceeds the Termination Date of the Revolving Credit Loan. In
the event funding at the LIBOR Rate is not available as a matter of law, funding
to the extent allowed hereunder shall be at the Base Rate minus one and one half
percent (1 1/2%).
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2.4 Commitment Fee/Servicing Fee. On the Closing Date, the Borrower,
Lakeshore and Lakes Mall agree to pay to the Bank (in addition to the commitment
fees it has previously paid) an additional commitment/extension fee of Two
Hundred Thousand and NO/100 Dollars ($200,000.00). In addition to the
commitment/extension fee, on each November 2 hereafter, the Borrower shall pay
to the Bank a servicing fee in the amount of Thirty Six Thousand and NO/100
Dollars ($36,000.00) for the Bank's services in connection with administering
the Loan participation with the Participants. The servicing fee shall belong
solely to the Bank and the Participants shall have no interest therein. Borrower
, Lakeshore and Lakes Mall agree that the commitment fees and servicing fee are
fair and reasonable considering the condition of the money market, the
creditworthiness of Borrower, the interest rate to be paid, and the nature of
the security for the Loan.
2.5 Borrowings under, Prepayments or Termination of the Revolving Credit
Loan. The Borrower may, at its option, from time to time, subject to the terms
and conditions of this Loan Agreement, without penalty, borrow, repay and
reborrow amounts under the Notes, and principal payments received shall be
applied by the Bank to the Notes all in such order and amounts as the Bank deems
appropriate in its sole discretion. Neither the Borrower nor Lakeshore shall be
permitted to borrow, repay and reborrow up to the principal amounts of the
Lakeshore Note unless documentary stamps tax and intangibles tax, required by
law to be paid, has been paid on the amounts readvanced and unless the Bank has
a first in priority mortgage on the Florida property owned by Lakeshore securing
the Lakeshore Note. Neither the Borrower nor Lakes Mall shall be permitted to
borrow, repay and reborrow up to the principal amounts of the Lakes Mall Note
unless documentary stamps tax and intangibles tax, required by law to be paid,
has been paid on the amounts readvanced and unless the Bank has a first in
priority mortgage on the Michigan property owned by Lakes Mall securing the
Lakes Mall Note.
By notice to the Bank in writing, Borrower shall be entitled to terminate
the Bank's commitment to make further advances on the Revolving Credit Loan; and
provided that the Revolving Credit Loan and all interest and all other
obligations of Borrower to Bank arising hereunder shall have been paid in full,
Bank shall thereupon at Borrower's request release its security interest in all
of Borrower's Property securing the Revolving Credit Loan.
2.6 Substitution of Collateral. Upon the Bank's prior written approval, the
Borrower may substitute collateral originally provided for the Revolving Credit
Loan for collateral of equal value but such substituted collateral must be
acceptable to the Bank and the acceptance thereof is solely within the
discretion of the Bank.
2.7 Cap On Loan. Notwithstanding anything contained in this Loan Agreement
to the contrary, if the Borrower does not have outstanding the sum of Thirty
Five Million Four Hundred Thousand Dollars ($35,400,000.00) evidenced by the
Lakeshore Note and the $15,000,000.00 Note secured by the Lakeshore Mortgage at
all times while the Loan is outstanding, the Loan shall be capped at Sixty Four
Million Six Hundred Thousand Dollars ($64,600,000.00).
2.8 Secondary Financing by Parent Parent was formerly the general partner
of the Borrower. It is also a real estate investment trust. In the event Parent
does any additional offering of its securities, if required by the Bank, it will
17
apply no less than 75% net of expenses of the monies received from such offering
for the benefit of the Borrower and will not use that percentage of funds so
received to capitalize or otherwise fund any other new partnerships or entities
that are not affiliates of the Borrower or Lakeshore or Lakes Mall.
2.9 Issuance of Letters of Credit. To the extent that letters of credit are
requested by the Borrower to be issued in connection with the Loan, the Borrower
agrees to execute and deliver to the Bank any documents reasonably requested by
the Bank related to the issuance of the letters of credit, including but not
limited to the Bank's standard form of reimbursement agreement. The letters of
credit shall not have an expiry date beyond the maturity date of the Notes.
Subject to compliance with the other terms and provisions of this Loan
Agreement, up to Twenty Million Dollars ($20,000,000.00) of the Loan may be used
for issuance of letters of credit for any purpose acceptable to the Bank. While
the face amount of the letters of credit shall be counted against availability
under the Loan as described in Section 2.1, such amounts shall only be deemed
actual Loan advances when the letter of credit is drawn upon.
SECTION 3: REQUIRED PAYMENTS, PLACE OF PAYMENT, ETC.
3.1 Required Repayments. In the event that the outstanding aggregate
principal balance of the Revolving Credit Loan including outstanding letters of
credit, shall at any time exceed the Borrowing Base, upon discovery of the
existence of such excess borrowings, the Borrower shall, within one hundred
twenty (120) days from the date of such discovery, make a principal payment
which will reduce the outstanding principal balance of the Revolving Credit Loan
to an amount which does not exceed the Borrowing Base and/or at Borrower's
option provide the Bank with additional collateral for the Revolving Credit Loan
of a value and type reasonably satisfactory to the Bank which additional
collateral shall be at a minimum sufficient to secure the then outstanding
balance of the Loan (after credit for any principal reduction payment received
from Borrower, if any), and if Borrower intends to request additional advances
under the Loan, the additional collateral shall include collateral, deemed
sufficient in the Bank's discretion, to secure the One Hundred Million Dollars
($100,000,000.00) credit line limitation, thereafter permitting Borrower to
obtain additional advances in the manner and to the extent provided under the
terms of this Loan Agreement.
In addition and during such one hundred twenty (120) day period or until
the principal payment or satisfactory collateral is received, whichever is less,
the Borrower will not make any additional requests for advances under the
Revolving Credit Loan. Once calculated, the Borrowing Base shall remain
effective until the next Borrowing Base calculation date as provided in Section
1 of this Loan Agreement.
3.2 Place of Payments. All payments of principal and interest on the
Revolving Credit Loan and all payments of fees required hereunder shall be made
to the Bank, at its address listed in Section 9.2 of this Loan Agreement in
immediately available funds.
3.3 Payment on Non-Business Days. Whenever any payment of principal,
interest or fees to be made on the indebtednesses evidenced by the Note shall
fall due on a Saturday, Sunday or public holiday under the laws of the State of
Tennessee, such payment shall be made on the next succeeding Business Day.
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SECTION 4: CONDITIONS OF LENDING
4.1 Conditions Precedent to Closing and Funding Initial Advance. The
obligation of the Bank to fund the initial Revolving Credit Loan Advance after
the date of this Loan Agreement is subject to the condition precedent that the
Bank shall have received, on or before the Closing Date, all of the following in
form and substance satisfactory to the Bank:
(a) This Loan Agreement.
(b) The Notes.
(c) The CBL Mortgage, together with a title commitment from a title
insurance company acceptable to the Bank, providing for the issuance of a
mortgagee's loan policy insuring the lien of the CBL Mortgage, in form,
substance and amount satisfactory to the Bank, containing no exceptions which
are unacceptable to the Bank, and containing such endorsements as the Bank may
require.
(d) Current financial statements of the Borrower in form satisfactory to
the Bank.
(e) Copies of the limited partnership agreements, certificates of limited
partnership, charters, bylaws, articles of organization and operating agreements
for all Loan Parties and Related Entities (which the Bank acknowledges it has
previously received), and all amendments thereto, and current certificates of
existence and certificates of authority for all Loan Parties and Related
Entities.
(f) Copies of corporate resolutions of Borrower's general partner, and all
Loan Parties and Related Entities.
(g) The opinion of counsel for all Loan Parties and Related Entities, that
the transactions herein contemplated have been duly authorized by all requisite
corporate, partnership and/or limited liability company authority, that this
Loan Agreement and the other instruments and documents herein referred to have
been duly authorized, validly executed and are in full force and effect, and
pertaining to such other matters as the Bank may require.
(h) A certificate from an insurance company, satisfactory to Bank, setting
forth the information concerning insurance which is required by Section 6.3 of
this Loan Agreement; or, if the Bank shall so require, certified copies of the
original insurance policies evidencing such insurance, all of which the Bank
acknowledges it has previously received.
(i) Environmental audits of the properties described in the CBL Mortgage.
(j) Surveys of the property subject to the CBL Mortgage, indicating the
location of all building lines, easements (visible, reflected in the public
records or otherwise) and any existing improvements or encroachments, which
surveys shall contain no set of facts objectionable to the Bank and shall be
accompanied by the Bank's usual survey certificate.
(k) Copies of the appraisals of the real estate described in Exhibit "A"
attached hereto.
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(l) The Guaranty Agreements of the Borrower guarantying the indebtedness
evidenced by the Lakeshore Note and the Lakes Mall Note and of Parent
guarantying the Loan (the "Guaranty Agreements").
(m) All the items and information shown on the Checklist for Closing, a
copy of which is attached hereto and marked Exhibit "D".
4.2 Conditions Precedent to All Revolving Credit Loan Advances. The
obligation of the Bank to make Revolving Credit Advances pursuant hereto
(including the initial advance at the Closing Date) shall be subject to the
following additional conditions precedent:
(a) The Borrower shall have furnished to the Bank, a written request
stating the amount of Revolving Credit Advance requested together with the
intended use of the advance.
(b) The Borrower and all Related Entities shall not be in default of any of
the terms and provisions hereof or of any instrument or document now or at any
time hereafter evidencing or securing all or any part of the Revolving Credit
Loan indebtednesses.
(c) Each of the Warranties and Representations of the Borrower, Lakeshore
and Lakes Mall, as set out in Section 5 hereof shall remain true and correct in
all material respects as of the date of such Loan advance.
(d) Each Guaranty Agreement shall be and remain in full force and effect.
(e) Within forty-five (45) days after each July 1, January 1, April 1 and
October 1, Borrower shall furnish to the Bank a Non-Default Certificate executed
by a duly authorized officer of Borrower, in the form of Exhibit "E" attached
hereto.
(f) If required by the Bank, the Borrower shall have furnished to the Bank
an updated and current title report with respect to the property or properties
covered by any CBL Mortgage held by the Bank. If any lien shall have been placed
on the property subsequent to the date of this Loan Agreement or the applicable
CBL Mortgage, other than liens in favor of the Bank, no additional advances
shall be made.
SECTION 5: REPRESENTATIONS AND WARRANTIES
Borrower, Lakeshore and Lakes Mall represent and warrant that:
5.1 Partnership/Limited Liability Company Status. The Borrower is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware; it has the power and authority to own its properties
and assets and is duly qualified to carry on its business in every jurisdiction
wherein such qualification is necessary. Lakeshore is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Florida; it has the authority to own its properties and assets and is duly
qualified to carry on its business in every jurisdiction wherein such
qualification is necessary. Lakeshore is a wholly owned subsidiary of the
Borrower. Lakes Mall is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Michigan; it has
the authority to own its properties and assets and is duly qualified to carry on
20
its business in every jurisdiction wherein such qualification is necessary.
Lakes Mall is a ninety percent (90%) owned subsidiary of the Borrower. Walnut
Square Associate Limited Partnership is a wholly owned subsidiary of the
Borrower. Towne Mall is a wholly owned subsidiary of the Borrower. Vicksburg
Mall Associates, Ltd. is a wholly owned subsidiary of the Borrower.
5.2 Power and Authority. The execution, delivery and performance of the
Loan Agreement, the Notes, the CBL Mortgage and the other loan and collateral
documents executed pursuant hereto by the Borrower and all Related Entities have
been duly authorized by all requisite action and, to the best of Borrower's,
Lakeshore's and Lakes Mall's knowledge, will not violate any provision of law,
any order of any court or other agency of government, the limited partnership
agreements, charter, bylaws or limited liability company agreements of the
Borrower, Lakeshore, Lakes Mall, or any Related Entity, any provision of any
indenture, agreement or other instrument to which Borrower, Lakeshore, Lakes
Mall, or any Related Entity is a party, or by which Borrower's, Lakeshore's,
Lakes Mall's and all Related Entities' respective properties or assets are
bound, or be in conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument, or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
Borrower, Lakeshore, Lakes Mall, or any Related Entities, except for liens and
other encumbrances provided for and securing the indebtedness covered by this
Loan Agreement.
5.3 Financial Condition.
(a) (i) Parent and Borrower's consolidated balance sheets (which includes
Lakeshore and Lakes Mall) for the fiscal year ended as of December 31, 2003, and
the related consolidated statements of operations and Consolidated statements of
cash flows for the year then ended filed with the SEC in the Forms 10-Q and
10-K, and (ii) the unaudited interim consolidated balance sheet of Borrower,
Lakeshore and Lakes Mall for September 30, 2004 and the related consolidated
statements of operations and consolidated statements of cash flows for the
period then ended, a copy of each of which has been furnished to the Bank,
together with any explanatory notes therein referred to and attached thereto,
are correct and complete and fairly present the financial condition of Parent,
Borrower, Lakeshore and Lakes Mall as at the date of said balance sheets and the
results of its operations for said periods and as of the date of closing of this
Loan Agreement and related transactions, respectively. All such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis maintained through the period involved.
(b) Since September 30, 2004, there has been no substantial adverse change
in the business, properties, condition (financial or otherwise), or results of
operations of Borrower, Lakeshore and/or Lakes Mall.
(c) (i) The audited balance sheet of Parent for the fiscal year ended on
December 31, 2003, the unaudited balance sheet of Parent for the period ended
September 30, 2004, and the related statements of operations and of cash flows
for the year ended 2003 and the period ended September 30, 2004, a copy of which
has been furnished to the Bank, together with any explanatory notes therein
referred to and attached thereto, are correct and complete and fairly present
the financial condition of Parent as at the date of said balance sheets and the
21
results of its operations for said periods and as of the date of closing of this
Loan Agreement and related transactions, respectively. All such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis maintained through the period involved.
(d) Since September 30, 2004, there has been no substantial adverse change
in the business, properties, condition (financial or otherwise), or results of
operations of Parent.
(e) The warranties and representations made in this Section 5.3 are and
were made as of the date of this Loan Agreement and any violation thereof shall
be determined as of that date.
5.4 Title to Assets. Borrower and all Related Entities have good and
marketable title to all its properties and assets reflected on the most recent
balance sheet furnished to Bank subject to the Permitted Encumbrances with
respect to the properties described in the CBL Mortgages and subject to all
encumbrances, whether of record or not, with respect to all other properties.
5.5 Litigation. There is no action, suit or proceeding at law or in equity
or by or before any governmental instrumentality or other agency now pending,
or, to the knowledge of the Borrower, Lakeshore and Lakes Mall threatened
against or affecting Borrower or any Related Entity, or any properties or rights
of Borrower or any Related Entities, which, if adversely determined, would
materially adversely affect the financial or any other condition of Borrower or
any Related Entity except as set forth in Exhibit "F" attached hereto.
5.6 Taxes. Borrower, Lakeshore and Lakes Mall have filed or caused to be
filed all federal, state or local tax returns which are required to be filed,
and has paid all taxes as shown on said returns or on any assessment received by
it, to the extent that such taxes have become due, except as otherwise permitted
by the provisions hereof.
5.7 Contracts or Restrictions. In Borrower's, Lakeshore's and Lakes Mall's
opinions, Borrower, Lakeshore, Lakes Mall and the Related Entities are not a
party to any agreement or instrument or subject to any partnership agreement or
limited liability company or corporate restrictions adversely affecting its
business, properties or assets, operations or condition (financial or otherwise)
other than this Loan Agreement, other bank loan or property partnership
agreements that contain certain restrictive covenants or other agreements
entered into in the ordinary course of business.
5.8 No Default. No Event of Default (as defined herein) has occurred and
not been waived under any agreement or instrument to which it is a party beyond
the expiration of any applicable notice and cure period, which default if not
cured would materially and substantially affect the financial condition,
property or operations of the Borrower or any Related Entity. For the purposes
of this Paragraph 5.8, monetary defaults specifically excepted under the
provisions of Paragraph 8.2 (which excludes non-recourse debt) below shall not
be deemed material defaults.
5.9 Patents and Trademarks. Borrower and all Related Entities possess all
necessary patents, trademarks, trade names, copyrights, and licenses necessary
to the conduct of its businesses.
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5.10 ERISA. To the best of Borrower's, Lakeshore's and Lakes Mall's
knowledge and belief, Borrower, Lakeshore, Lakes Mall and all Related Entities
are in compliance with all applicable provisions of the Employees Retirement
Income Security Act of 1974 ("ERISA") and all other laws, state or federal,
applicable to any employees' retirement plan maintained or established by it.
5.11 Hazardous Substances. To the best knowledge of Borrower, Lakeshore and
Lakes Mall, no Hazardous Substances are unlawfully located on or have been
unlawfully stored, processed or disposed of on or unlawfully released or
discharged (including ground water contamination) from any property owned by
Borrower, Lakeshore, Lakes Mall and/or any Related Entity which is encumbered by
the CBL Mortgage and no above or underground storage tanks exist unlawfully on
such property. No private or governmental lien or judicial or administrative
notice or action related to Hazardous Substances or other environmental matters
has been filed against any property which, if adversely determined, would
materially adversely affect the business, operations or the financial condition
of Borrower, Lakeshore, Lakes Mall and/or any Related Entity except as set forth
in Exhibit "F" attached hereto.
5.12 Ownership of Borrower. As of the date hereof, CBL Holdings I owns an
approximate 1.648% general partner interest in the Borrower and CBL Holdings II
owns a 53.358% limited partner interest in the Borrower. As of the date hereof,
Parent does not own a direct interest in Borrower; however, it owns 100% of the
stock of CBL Holdings I and CBL Holdings II. As of the date hereof, Parent and
its affiliates, officers and key employees own an approximate 15.68% limited
partner interest in the Borrower. As of the date hereof, CBL & Associates
Management, Inc. owns no interest in the Borrower. As of the date hereof,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Group, Inc. owns an approximate 21.41% limited partner
interest in the Borrower and other investors own an approximate 8.93% limited
partner interest in the Borrower The Borrower has no other general partners. As
of the date hereof the Borrower and its Affiliates own 100% of the partnership
interests in Walnut Square Associates Limited Partnership, Lakeshore, Towne Mall
and Vicksburg Mall Associates, Ltd. and 90% of the limited liability company
interests of Lakes Mall.
5.13 Outstanding Balance on Lakeshore Note. As of the date hereof, the
outstanding unpaid principal balance of the Lakeshore Note is $20,400,000.00 and
the undisbursed amount of the Lakeshore Note is $-0- and no defenses or offsets
exist against the holder of the Lakeshore Note or otherwise.
5.14 Outstanding Balance on Lakes Mall Note. As of the date hereof, the
outstanding unpaid principal balance of the Lakes Mall Note is $12,535,000.00
and the undisbursed amount of the Lakes Mall Note is $25,565,000.00 and no
defenses or offsets exist against the holder of the Lakes Mall Note or
otherwise.
5.15 Outstanding Balance on $15,000,000 Note. As of the date hereof, the
outstanding unpaid principal balance of the $15,000,000.00 Note is
$10,600,000.00 and the undisbursed amount of the $15,000,000.00 Note is
$4,400,000.00 and no defenses or offsets exist against the holder of the
$15,000,000.00 Note or otherwise.
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5.16 Outstanding Balance on $26,500,000 Note. As of the date hereof, the
outstanding unpaid principal balance of the $26,500,000.00 Note is $7,211,000.00
and the undisbursed amount of the $26,500,000.00 Note is $19,289,000.00 and no
defenses or offsets exist against the holder of the $26,500,000.00 Note or
otherwise.
5.17 Anti-Terrorism. Neither Parent, Borrower nor any of their Subsidiaries
nor any Related Entity is or has been designated, or is owned or controlled by,
a "suspected terrorist" as defined in Executive Order 13224, which prohibits
transactions with terrorists and terrorist organizations.
SECTION 6: AFFIRMATIVE COVENANTS OF BORROWER, LAKESHORE AND LAKES MALL
Borrower, Lakeshore and Lakes Mall covenant and agree that from the date
hereof and until payment in full of the principal of and interest on
indebtednesses evidenced by the Notes, unless the Bank shall otherwise consent
in writing, such consent to be at the discretion of the Bank, Borrower,
Lakeshore and Lakes Mall will and will cause all Related Entities to:
6.1 Business and Existence. Perform all things necessary to preserve and
keep in full force and effect its existence, rights and franchises, comply with
all laws applicable to it and continue to conduct and operate its business in a
sound and prudent manner.
6.2 Maintain Property. Maintain, preserve, and protect all leases,
franchises, and trade names and preserve all of its properties used or useful in
the conduct of its business in a sound and prudent manner, keep the same in good
repair, working order and condition, ordinary wear and tear excepted, and from
time to time make, or cause to be made, all needed and proper repairs, renewals,
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly conducted at all times.
6.3 Insurance.
(a) With respect to all of the Property which serves as collateral for the
Loan, at all times maintain in some company or companies (having a Best's rating
of A:XI or better) approved by Bank:
(i) Comprehensive public liability insurance covering claims for
bodily injury, death, and property damage, with minimum limits
satisfactory to the Bank, but in any event not less than those amounts
customarily maintained by companies in the same or substantially
similar business;
(ii) Business interruption insurance and/or loss of rents insurance in
a minimum amount specified by Bank, with loss payable clause in favor
of Bank;
(iii) Hazard insurance insuring all the Property which serves as
collateral for the Loan against loss by fire (with extended coverage)
and against such other hazards and perils (including but not limited
to loss by windstorm, hail, explosion, riot, aircraft, smoke,
vandalism, malicious mischief and vehicle damage) as Bank, in its sole
discretion, shall from time to time require, all such insurance to be
issued in such form, with such deductible provision, and for such
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amount as shall be satisfactory to Bank, with loss payable clause in
favor of Bank. The Bank is hereby authorized and empowered, at its
option, to adjust or compromise any loss under any such insurance
policies and to collect and receive the proceeds from any such policy
or policies as provided in the CBL Mortgage; and
(iv) Such other insurance as the Bank may, from time to time,
reasonably require by notice in writing to the Borrower, Lakeshore
and/or Lakes Mall.
(b) All required insurance policies shall provide for not less than thirty
(30) days' prior written notice to the Bank of any cancellation, termination, or
material amendment thereto; and in all such liability insurance policies, Bank
shall be named as an additional insured. Each such policy shall, in addition,
provide that there shall be no recourse against the Bank for payment of premiums
or other amounts with respect thereto. Hazard insurance policies shall contain
the agreement of the insurer that any loss thereunder shall be payable to the
Bank notwithstanding any action, inaction or breach of representation or
warranty by the Borrower or any Related Entity. The Borrower, Lakeshore and
Lakes Mall will deliver to Bank original or duplicate policies of such
insurance, or satisfactory certificates of insurance, and, as often as Bank may
reasonably request, a report of a reputable insurance broker with respect to
such insurance. Any insurance proceeds received by Bank shall be applied upon
the indebtednesses, liabilities, and obligations of the Borrower, Lakeshore or
Lakes Mall to the Bank (whether matured or unmatured) or, at Bank's option,
released to the Borrower, Lakeshore or Lakes Mall, as the case might be.
6.4 Obligations, Taxes and Liens. Pay all of its indebtednesses and
obligations in accordance with normal terms and practices of its business and
pay and discharge or cause to be paid and discharged all taxes, assessments, and
governmental charges or levies imposed upon it or upon any of its income and
profits, or upon any of its properties, real, personal or mixed, or upon any
part thereof, before the same shall become in default, as well as all lawful
claims for labor, materials, and supplies which otherwise, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided,
however, that the Borrower and Related Entities shall not be required to pay and
discharge or to cause to be paid and discharged any such indebtedness,
obligation, tax, assessment, trade payable, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings
satisfactory to Bank, and Bank shall be furnished, if Bank shall so request,
bond or other security protecting it against loss in the event that such contest
should be adversely determined. In addition, Borrower, Lakeshore and Lakes Mall
shall immediately pay, upon the request of the Bank, all mortgage and/or
intangible taxes and/or penalties payable to government officials with respect
to any CBL Mortgage and/or the Notes or, if Bank has elected to pay same,
Borrower, Lakeshore and Lakes Mall shall immediately reimburse Bank therefor
upon the request of the Bank; provided, however Borrower, Lakeshore and Lakes
Mall shall not be required to pay so long as Borrower, Lakeshore, Lakes Mall or
any Related Entity is contesting the tax and/or penalties in good faith and
through continuous and appropriate proceedings but Borrower, Lakeshore and Lakes
Mall shall be required to reimburse to the extent Bank has made any payment.
6.5 Financial Reports and Other Data. Furnish to the Bank as soon as
available: (a) and in any event within ninety (90) days after the end of each
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fiscal year of Borrower, an unqualified audit as of the close of such fiscal
year of Borrower, including a consolidated balance sheet and consolidated
statements of operations and consolidated statements of cash flows together with
the unqualified audit report and opinion of Deloitte & Touche, LP, Certified
Public Accountant, or other independent Certified Public Accountant which is
widely recognized and of good national repute or which is otherwise acceptable
to the Bank, showing the financial condition of Borrower at the close of such
year and the results of operations during such year; and, (b) within forty-five
(45) days after the end of each fiscal quarter, (i) consolidated financial
statements similar to those described above for Borrower and for Parent, not
audited but certified by the Chief Executive Officer or the Chief Financial
Officer or Controller or a Senior Vice President of Borrower and Parent, as the
case may be, such balance sheets to be as of the end of such quarter and such
consolidated statements of operations and consolidated statements of cash flows
to be for the period from the beginning of said year to the end of such quarter,
in each case subject only to audit and year-end adjustment and the preparation
of required footnotes; (ii) a Non-Default Certificate in the form prescribed on
Exhibit "E" attached hereto and made a part hereof; and (iii) a Borrowing Base
Certificate; and, (c) within forty-five (45) days after the end of each fiscal
quarter, rent rolls and operating statements related to the properties described
in the CBL Mortgage; and, (d) simultaneously with the inclusion of Net Operating
Income (loss) from Newly Acquired Property in any financial calculation provided
for in this Loan Agreement, certification, in a form acceptable to Bank, of the
purchase price for such Newly Acquired Property and a current rent roll and a
current income and expense statement, similar to those described above, not
audited but certified by the Chief Financial Officer or Controller of Borrower
and Parent, as the case may be, such rent roll and statement of income and
expense to be for the twelve (12) month period, if available, used in any such
calculation and/or to also be for the period from the beginning of said year to
the end of such quarter, as the case may be.
6.6 Additional Information. Furnish such other information regarding the
operations, business affairs and financial condition of the Borrower and all
Related Entities as Bank may reasonably request, including but not limited to
written confirmation of requests for loan advances, true and exact copies of its
books of account and tax returns, and all information furnished to the owners of
its partnership interests, or any governmental authority, and permit the copying
of the same, and Bank agrees that such information shall be maintained in strict
confidence unless it is publicly available and except that it may be disclosed
to any participants in the Loan and their counsel and Bank's counsel. Provided,
however, the Borrower, Lakeshore and Lakes Mall shall not be required to divulge
the terms of other financing arrangements with other lending institutions if and
to the extent Borrower, Lakeshore and/or Lakes Mall is prohibited by contractual
agreement with such lending institutions from disclosing such information with
the exception that Borrower, Lakeshore and Lakes Mall shall promptly notify Bank
in writing of all defaults, if any, which exist beyond any applicable cure
periods and the nature thereof, which occur in connection with such financing
arrangements and which defaults or defaults would constitute an Event of Default
hereunder. Borrower, Lakeshore and Lakes Mall shall not enter into any such
contractual arrangement whereby the Borrower or Lakeshore or Lakes Mall is
prohibited from disclosing such financial arrangements, without providing Bank
with written notice of the nature of such prohibitions. In addition, Borrower,
Lakeshore and Lakes Mall shall not enter into any such arrangement while any
Event of Default hereunder exists beyond any applicable cure periods.
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6.7 Right of Inspection. Permit any person designated by the Bank, at the
Bank's expense, to visit and inspect any of the properties, books and financial
reports of the Borrower and all Related Entities and to discuss its affairs,
finances and accounts with its principal officers, at all such reasonable times
and as often as a Bank may reasonably request provided that such inspection
shall not unreasonably interfere with the operation and conduct of Borrower's or
any Related Entity's properties and business affairs and provided further that
such person shall disclose such information only to the Bank, the Bank's
appraisers and examiners as required by banking laws, rules and regulations.
6.8 Environmental Laws. Maintain at all times all property described in the
CBL Mortgage in compliance with all applicable Environmental Laws, and
immediately notify the Bank of any notice, action, lien or other similar action
alleging either the location of any Hazardous Substances or the violation of any
Environmental Laws with respect to any of such properties.
6.9 Notice of Adverse Change in Assets. At the time of Borrower's,
Lakeshore's and/or Lake Mall's first knowledge or notice, immediately notify the
Bank of any information that may adversely affect in any material manner the
properties of the Borrower and/or any Related Entity which are subject to any
CBL Mortgage.
6.10 Appraisals. Upon the Bank's request, but no more frequently than once
per every eighteen (18) month period, allow appraisers employed by the Bank to
make updated reappraisals of the property or properties described in the CBL
Mortgage, at the Borrower's expense.
6.11 Agreements regarding Lakeshore Note and Lakeshore Mortgage. So long as
no Event of Default then exists or with notice or lapse of time would exist,
upon the request of the Borrower, but in the Bank's discretion, the Bank shall
sell to the Borrower and/or the Borrower's designated subsidiary, the Lakeshore
Note and/or the Lakeshore Mortgage for the balance due under the Lakeshore Note
plus accrued interest. Any such sale would be without recourse, representation
and warranty.
6.12 Agreements regarding Lakes Mall Note and Lakes Mall Mortgage. So long
as no Event of Default then exists or with notice or lapse of time would exist,
upon the request of the Borrower, but in the Bank's discretion, the Bank shall
sell to the Borrower and/or the Borrower's designated subsidiary, the Lakes Mall
Note and/or the Lakes Mall Mortgage for the balance due under the Lakes Mall
Note plus accrued interest. Any such sale would be without recourse,
representation and warranty.
6.13 Notice of Event of Default. As soon as practicable, and in any event
within two (2) Business Days after a senior officer of Borrower or any
Subsidiary becomes aware of the existence of any condition or event which
constitutes a default or Event of Default, the Borrower shall provide telephonic
notice to the Bank specifying the nature and period of existence thereof, and,
no more than two (2) Business Days after such telephonic notice, written notice
again specifying the nature and period of existence thereof and specifying what
action Borrower is taking or proposes to take with respect thereto.
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6.14 REIT. Parent shall at all times maintain its status as a "real estate
investment trust" under the Internal Revenue Code.
SECTION 7: NEGATIVE COVENANTS OF BORROWER, LAKESHORE AND LAKES MALL
Borrower, Lakeshore and Lakes Mall covenant and agree that at all times
from and after the Closing Date, unless the Bank shall otherwise consent in
writing, such consent to be at the discretion of the Bank, Borrower, Lakeshore
and Lakes Mall will not, and will not allow any Related Entity, to either
directly or indirectly:
7.1 Minimum Tangible Net Worth. Permit Tangible Net Worth at any time to be
less than (i) $1,140,494,000.00 plus (ii) 50% of the Net Proceeds of all Equity
Issuances effected at any time after the Agreement Date by the Parent, Borrower
or any Subsidiaries to any Person other than the Parent or any of its
Subsidiaries.
7.2 Ratio of Total Liabilities to Gross Asset Value. Permit the ratio of
(i) Total Liabilities of the Parent, Borrower and its Subsidiaries determined on
a consolidated basis to (ii) Gross Asset Value of the Parent, Borrower and any
Subsidiaries determined on a consolidated basis, to exceed 0.650 to 1.00 at any
time.
7.3 Ratio of EBITDA to Interest Expense. Permit the ratio of (i) EBITDA of
the Parent, Borrower and the Subsidiaries determined on a consolidated basis for
the fiscal quarter most recently ending to (ii) Interest Expense of the Parent
and its Subsidiaries determined on a consolidated basis for such period, to be
less than 1.750 to 1.00.
7.4 Ratio of EBITDA to Debt Service. Permit the ratio of (i) EBITDA of the
Parent, Borrower and the Subsidiaries determined on a consolidated basis for the
fiscal quarter most recently ending to (ii) Debt Service of the Parent, Borrower
and the Subsidiaries determined on a consolidated basis for such period, to be
less than 1.550 to 1.00.
7.5 Indebtedness. Incur, create, assume or permit to exist any indebtedness
or liability, secured by any of the properties described in the CBL Mortgage,
except, with respect to the Borrower only, for indebtedness, which is
subordinate in all respects to the indebtedness evidenced by the Notes which
indebtedness does not exceed Five Hundred Thousand Dollars ($500,000.00) in the
aggregate per property and is used for renovation, repair or improvement of the
property or properties described in the CBL Mortgage.
7.6 Mortgages, Liens, Etc. Create, assume or suffer to exist any mortgage,
pledge, lien, charge or other encumbrance of any nature whatsoever on any of the
properties subject to the CBL Mortgage except:
(a) Liens in favor of the Bank securing payment of the Notes;
(b) Existing liens securing indebtednesses permitted under Section 7.5
above;
(c) Permitted Encumbrances (as defined at Section 1); and
28
(d) Liens securing indebtedness permitted under Section 7.5 above.
7.7 Sale of Assets. Sell, lease, convert, transfer or dispose of all or a
substantial part of its assets for less than book value or for less than fair
market value, or, sell, lease, convert, transfer or dispose of all or a
substantial part of its assets, without the Bank's prior written consent, if
GAAP book value or fair market value exceeds 20% of the GAAP book value of all
of its assets at that time. In other words, the Borrower may sell its assets
without the Bank's consent so long as such sale is not more than 20% of the book
value of all of its assets and only so long as such sale does not cause the
Borrower to be in violation of any covenant in this Loan Agreement.
7.8 Consolidation or Merger; Acquisition of Assets. Enter into any
transaction of merger or consolidation, acquire any other business or
corporation, or acquire all or substantially all of the property or assets of
any other Person unless the Borrower and/or its general partner shall be the
surviving entities or the transaction or acquisition is permitted by and
effected in accordance with the provisions of Section 7.12(b).
7.9 Partnership Distributions and Other Payments. Except as hereinafter
provided, declare or pay, or set apart any funds for the payment of, any
distributions on any partnership, limited liability or corporate interest in
Borrower or any Related Entity or apply any of its funds, properties, or assets
to or set apart any funds, properties or assets for, the purchase or other
retirement of or make any other distribution (whether by reduction of capital or
otherwise) in respect of, any partnership, limited liability or corporate
interest in Borrower or any Related Entity; or without the consent of Bank, pay
any fee or other compensation of any nature to or for the benefit of CBL
Holdings, and/or Parent and/or their affiliates, officers or key employees (the
"Distributees"). Notwithstanding anything stated in the foregoing to the
contrary, as long as no Event of Default then exists or would exist as a result
of the following, (a) Borrower may pay to such Distributees and its other
partners quarterly distributions so long as such distributions do not exceed in
the aggregate 95% of Funds from Operations and (b) Borrower may pay any fee or
other reasonable compensation of any nature to or for the benefit of (i) CBL &
Associates Management, Inc., or (ii) any other Distributee, which payment has
been made in the ordinary course of business and approved by the independent
directors of CBL Holdings. Borrower may make a distribution from Loan proceeds
but only once during any rolling twelve (12) month period and provided Borrower
is not in default hereunder and such distribution will not create a default
hereunder. Notwithstanding anything contained in the foregoing to the contrary,
the restriction on distributions shall not preclude the Parent from making the
minimum distributions (as that term is used in the Internal Revenue Code)
required to maintain REIT status under the Internal Revenue Code.
7.10 Loans to Officers and Employees. Permit or allow loans to officers and
employees of Borrower or any Related Entity or holders of partnership interests
in Borrower to exceed $500,000.00 in any one instance or $2,000,000.00 in the
aggregate, provided that nothing in the foregoing shall be deemed to limit loans
made in the ordinary course of business to CBL & Associates Management, Inc..
7.11 Limitations on Actions Against Bank and Participants. Take any action
against:
29
(a) Bank, if any Participant fails or refuses to fund pursuant to the terms
of the Participation Agreement to Bank for the benefit of Borrower, Lakeshore
and/or Lakes Mall, such Participant's Proportionate Share of the amount the Bank
is obligated to advance hereunder and such failure or refusal has not been
caused by Bank's breach of this Loan Agreement or the Participation Agreement;
or
(b) any Participant, if Bank fails or refuses to fund for the account of
Borrower, Lakeshore and/or Lakes Mall any Participant's Proportionate Share of
the amount the Bank is obligated to advance hereunder, to the extent such
Participant's Proportionate Share has been received by Bank; or
(c) any Participant, if such Participant fails or refuses to fund to Bank
for the benefit of Borrower, Lakeshore and/or Lakes Mall, such Participant's
Proportionate Share of the amount the Bank is obligated to advance hereunder and
such failure or refusal is not a breach of the Participation Agreement; or
(d) any Participant, if Bank fails or refuses to fund for the account of
Borrower, Lakeshore and/or Lakes Mall Bank's Proportionate Share. Borrower's,
Lakeshore's and Lake Mall's cause of action under this Loan Agreement, if any,
for failure to fund being directly against the lender which fails or refuses to
fund, and then only if such failure or refusal to fund would constitute a breach
of this Loan Agreement or, with respect to the Participants, the Participation
Agreement.
7.12 Investment Concentration.
(a) Borrower shall not make, and shall not permit any of its Subsidiaries
to make, any Investment in the following items which would cause the value of
such holdings of Borrower and/or Subsidiaries to exceed the following
percentages of Borrower's Tangible Net Worth:
(i) raw land, such that the aggregate book value of all such raw land
(other than: (A) raw land subject to a ground lease under which
Borrower is the landlord and a Person not an Affiliate of Borrower is
the tenant; (B) land on which the development of a Project has
commenced; (C) land subject to a binding contract of sale under which
Borrower or one of its Subsidiaries is the seller, the buyer is not an
Affiliate of Borrower and (D) out-parcels held for lease or sale)
exceeds ten percent (10%) of Tangible Net Worth;
(ii) developed real estate used primarily for non-retail purposes,
such that the aggregate book value of such real estate (other than the
real estate located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ and a small office building located at Richland Mall in
Waco, Texas) exceeds ten percent (10%) of Tangible Net Worth;
(iii) Capital Stock of any Person, such that the aggregate value of
such Capital Stock in Unconsolidated Affiliates other than CBL &
Associates Management, Inc., calculated on the basis of the lower of
cost or market, exceeds ten percent (10%) of Tangible Net Worth;
30
(iv) Mortgages, such that the aggregate principal amount secured by
Mortgages acquired by Borrower after the Effective Date exceeds ten
percent (10%) of Tangible Net Worth, except for mortgages held by
Mortgage Holdings, LLC (on real estate owned by Borrower or any entity
related to Borrower) for the purpose of avoiding mortgage taxes and
title charges and mortgages granted upon the sale of assets as more
particular set out in Borrower's 10k;
(v) Investments made after the date hereof in partnerships, joint
ventures and other non-corporate Persons accounted for on an equity
basis (determined in accordance with GAAP), such that the aggregate
outstanding amount of such Investments (other than Investments in
partnerships in which (A) Borrower is the sole general partner and the
only limited partners are either (i) the Person from whom the real
estate owned by such partnership was purchased, and such Person's
successors and assigns or (ii) a Person operating stores which anchor
the development constructed or to be constructed by such partnership
or (B) Borrower owns not less than ninety percent (90%) of the
partnership interests and has the unilateral right to make all
operational and strategic decisions) exceeds ten percent (10%) of
Tangible Net Worth.
(b) Neither Borrower nor any of its Subsidiaries shall acquire the business
of all or substantially all of the assets or stock of any Person, or any
division of any Person, whether through Investment, purchase of assets, merger
or otherwise; provided that Borrower or its Subsidiaries may make such an
acquisition so long as Borrower has delivered to Bank, not less than thirty (30)
days prior to the date such acquisition is consummated, (i) all information
related to such acquisition as is reasonably requested by the Bank and (ii) a
certificate, signed by the chief financial officer of Borrower, certifying that,
giving effect to such acquisition, there shall not exist any Default or Event of
Default hereunder and setting forth in reasonable detail the calculations
setting forth, on a pro forma basis giving effect such acquisition, Borrower's
compliance with the loan documents which exist between Borrower and Bank.
SECTION 8: EVENTS OF DEFAULT
An "Event of Default" shall exist if any of the following shall occur:
8.1 Payment of Principal, Interest to Bank. The Borrower, Lakeshore and/or
Lakes Mall defaults in the payment as and when due of principal or interest on
any Note or any fees due under this Loan Agreement which default shall continue
for more than ten (10) days following mailing of notice from Bank to Borrower,
Lakeshore and/or Lakes Mall thereof; or the Borrower, Lakeshore and/or Lakes
Mall defaults in the payment when due of any other recourse indebtednesses,
liabilities, or obligations to the Bank beyond the expiration of any applicable
notice and cure period, whether now existing or hereafter created or arising;
direct or indirect, absolute or contingent provided however, there shall be no
notice requirement or cure periods if this Note has matured; or
8.2 Payment of Obligations to Others. The Borrower, Lakeshore, Lakes Mall
or any Related Entity defaults in the payment as and when due of any other
recourse indebtedness or obligation for borrowed money owed to a lender other
than Bank or to Bank unrelated to the Loan, but only if the effect of such
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default causes the holder of any other recourse indebtedness or obligation
(after expiration of any applicable cure period) to accelerate the maturity of
such indebtedness or obligation prior to the stated maturity date of such
indebtedness or obligation; provided however, the Borrower, Lakeshore, Lakes
Mall and the Related Entity will not be considered in default hereunder if: (a)
the monetary payment default is less than One Million Dollars ($1,000,000.00)
and is not a failure to pay a regular monthly, quarterly or other periodic
installment payment of principal and/or interest or interest only, as the case
may be, on the due date [subject to any applicable grace or cure period and
specifically excluding any regularly scheduled balloon payment not paid in full
within sixty (60) days of the actual due date of the balloon payment unless the
lender has issued a notice of default with respect to such balloon payment] or
(b) such default is being contested by the Borrower, Lakeshore, Lakes Mall or
the Related Entity in good faith through appropriate proceedings reasonably
acceptable to Bank; or
8.3 Performance of Obligations to Bank. The Borrower, Lakeshore, Lakes Mall
or any Related Entity defaults with respect to the performance of any
non-monetary obligation incurred in connection with the Loan and such default
continues for more than thirty (30) days following mailing of notice thereof
from Bank to Borrower, Lakeshore, Lakes Mall and/or the Related Entity, as the
case may be, or, if such default is incapable of cure within such thirty (30)
day period, Borrower, Lakeshore, Lakes Mall and/or the Related Entity, as the
case may be, fails to diligently, continuously and in good faith pursue such
cure to completion; or the Borrower, Lakeshore, Lakes Mall and/or the Related
Entity, as the case may be, defaults with respect to the performance of any
other non-monetary obligation incurred in connection with any recourse
indebtedness for borrowed money owed to the Bank in connection with the Loan and
such default continues for more thirty (30) days following mailing of notice
thereof from Bank to Borrower, Lakeshore, Lakes Mall and/or the Related Entity,
as the case may be, or, if such default is incapable of cure within such thirty
(30) day period, Borrower, Lakeshore, Lakes Mall and/or the Related Entity fails
to diligently, continuously and in good faith pursue such cure to completion; or
8.4 Performance of Obligations to Others. An event of default occurs with
respect to the performance of non-monetary obligations incurred in connection
with any recourse indebtedness for borrowed money owed to a lender other than
Bank, provided the default has not been waived by such lender or the default has
not been cured within the applicable cure period; provided further however, if
such lender's declaration of default is being continuously and diligently
contested by the Borrower, Lakeshore, Lakes Mall and/or the Related Entity, as
the case may be, in good faith through appropriate proceedings reasonably
acceptable to Bank, such default shall not constitute a default hereunder; or
8.5 Representation or Warranty. Any representation or warranty made by the
Borrower, Lakeshore and/or Lakes Mall herein, or in any report, certificate,
financial statement or other writing furnished in connection with or pursuant to
this Loan Agreement shall prove to be false, misleading or incomplete in any
substantial material respect on the date as of which made; or
8.6 Bankruptcy, Etc. The Borrower or Lakeshore or Lakes Mall or CBL
Holdings or Parent or any Related Entity shall make a general assignment of
assets for the benefit of creditors, file a petition in bankruptcy, petition or
apply to any tribunal for the appointment of a custodian, receiver or any
32
trustee for it or a substantial part of its assets, or shall commence on its or
their behalf any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or if there shall have been
filed any such petition or application, or any such proceeding shall have been
commenced against Borrower or Lakeshore or Lakes Mall or CBL Holdings or Parent
or any Related Entity, in which an order for relief is entered against Borrower
or Lakeshore or Lakes Mall or CBL Holdings or Parent which remains undismissed
for a period of ninety (90) days or more; or Borrower or Lakeshore or CBL
Holdings or Parent or any Related Entity by any act or omission shall indicate
its consent to, approval of or acquiescence in any such petition, application or
proceeding or order for relief or the appointment of a custodian, receiver or
any trustee for it or any substantial part of any of its properties, or shall
suffer any such custodianship, receivership or trusteeship to continue
undischarged for a period of ninety (90) days or more; or
8.7 Concealment of Property, Etc. The Borrower, Lakeshore, Lakes Mall, any
Related Entity, or CBL Holdings or Parent shall have concealed, removed, or
permitted to be concealed or removed, any part of its property, with intent to
hinder, delay or defraud its or his creditors or any of them, or made or
suffered a transfer of any of its property which shall constitute a fraudulent
act under any bankruptcy, fraudulent conveyance or similar law; or shall have
made any transfer of its property to or for the benefit of a creditor at a time
when other creditors similarly situated have not been paid; or shall have
suffered or permitted, while insolvent, any creditor to obtain a lien upon any
of its property through legal proceedings or distraint which is not vacated
within thirty (30) days from the date thereof; or
8.8 Management Change. Management of the Borrower shall, for a period of
one hundred eighty (180) consecutive days, cease to be in at least two of the
following persons: (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, (b) ▇▇▇▇ ▇. ▇▇▇, (c) ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, (d) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or (e) ▇▇▇ ▇▇▇▇▇▇, who shall be in an
executive management position with Borrower or who shall be a senior vice
president, executive vice president, senior executive vice president or
president with Borrower's general partner; or
8.9 Change in Ownership. Parent, its affiliates, officers and key
employees, and CBL Holdings shall have through any means reduced their aggregate
partnership interest in Borrower to less than fifteen percent (15%) of the
aggregate of such partnership interests; or
8.10 Loan Documents Terminated or Void. This Loan Agreement, any Note, the
Guaranty, or any instrument securing any Note shall, at any time after their
respective execution and delivery and for any reason, cease to be in full force
and effect or shall be declared to be null and void; or the Borrower, Lakeshore,
Lakes Mall and/or any Related Entity shall deny it has any or further liability
under this Loan Agreement, any Note, , the Guaranty, or under the CBL Mortgage;
or
8.11 Covenants. The Borrower or any Related Entity defaults in the
performance or observance of any other covenant, agreement or undertaking on its
part to be performed or observed, contained herein, in the CBL Mortgage or in
any other instrument or document which now or hereafter evidences or secures all
or any part of the loan indebtedness which default shall continue for more than
thirty (30) days following the mailing of notice from Bank to Borrower,
▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ and/or such Related Entity, as the case may be; provided
however, and notwithstanding anything contained in this Loan Agreement, in the
CBL Mortgage or in any other instrument or document which now or hereafter
evidences or secures all or any part of the loan indebtedness, failure to comply
with a financial covenant shall not be an Event of Default unless such failure
continues for ninety (90) days after the earlier of (i) the date any senior
officer of the Borrower or any Related Entity has actual knowledge of such
failure; or (ii) the date notice of such failure has been given to the Borrower
by the Bank; or
8.12 Breach of Section 7.12 of this Loan Agreement. The Borrower, Lakeshore
and/or Lakes Mall shall fail to observe or perform its obligations to the Bank,
and/or any Participant under Section 7.12 of this Loan Agreement; or
8.13 Placement of Liens on Property. The Borrower or any Related Entity
shall, without the prior written consent of the Bank and except as permitted by
Section 7.5 and 7.6 hereof, create, place or permit to be created or placed, or
through any act or failure to act, acquiesce in the placing of, or allow to
remain, any mortgage, deed of trust, pledge, lien (statutory, constitutional or
contractual), or security interest, encumbrance or charge on, or conditional
sale or other title retention agreement, regardless of whether same are
expressly subordinate to the liens of the CBL Mortgage, with respect to the
property described in any CBL Mortgage.
8.14 Remedy. Upon the occurrence of any Event of Default, as specified
herein, the Bank shall, at its option, be relieved of any obligation to make
further Revolving Credit Advances under this Loan Agreement; and the Bank may at
its option charge interest on the outstanding indebtedness at the Default Rate;
and the Bank may, at its option, thereupon declare the entire unpaid principal
balances of the Notes, all interest accrued and unpaid thereon and all other
amounts payable under this Loan Agreement to be immediately due and payable for
all purposes, and may exercise all rights and remedies available to it under the
CBL Mortgage, any other instrument or document which secures any Note, or
available at law or in equity. All such rights and remedies are cumulative and
nonexclusive, and may be exercised by the Bank concurrently or sequentially, in
such order as the Bank may choose.
SECTION 9: MISCELLANEOUS
9.1 Amendments. The provisions of this Loan Agreement, any Note, the CBL
Mortgage or any instrument or document executed pursuant hereto or securing the
indebtednesses may be amended or modified only by an instrument in writing
signed by the parties hereto and thereto.
9.2 Notices. All notices and other communications provided for hereunder
shall be in writing and shall be mailed, certified mail, return receipt
requested, or delivered, if to the Borrower, Lakeshore and/or Lakes Mall, to it
at c/o CBL & Associates Properties, Inc., CBL Center, Suite 500, ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President, with a
copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇.; if to the Bank, to it at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; or as to any such
person at such other address as shall be designated by such person in a written
notice to the other parties hereto complying as to delivery with the terms of
this Section 9.2. All such notices and other communications shall be effective
(i) if mailed, when received or three (3) Business Days after mailing, whichever
34
is earlier; or (ii) if delivered, upon delivery and receipt of an executed
acknowledgment of receipt by the party to whom delivery is made. Notwithstanding
the foregoing, the Bank shall not be required to send a copy of any notice or
communication to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. but the Bank will use good faith efforts
to copy ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇. on any such notices or communications via regular
mail, fax or email.
9.3 No Waiver, Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Waiver of any
right, power, or privilege hereunder or under any instrument or document now or
hereafter securing the indebtedness evidenced hereby or under any guaranty at
any time given with respect thereto is a waiver only as to the specified item.
The rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.
9.4 Indemnification. Borrower, Lakeshore and Lakes Mall agree to indemnify
Bank from and against any and all claims, losses and liabilities, including,
without limitation, reasonable attorneys' fees, growing out of or resulting from
this Loan Agreement (including, without limitation, enforcement of this Loan
Agreement), except claims, losses or liabilities resulting solely and directly
from Bank's gross negligence or willful misconduct or from Bank's violation of
applicable banking rules and regulations. The indemnification provided for in
this Section shall survive the payment in full of the loan. The Borrower agrees
to indemnify the Bank and the Participants and to hold the Bank and the
Participants harmless from any loss or expense that such Bank or the
Participants may sustain or incur as a consequence of a default by the Borrower
in making any prepayment of or conversion from an advance bearing interest at
the LIBOR Rate after the Borrower has given a notice thereof in accordance with
the provisions of this Loan Agreement.
9.5 Survival of Agreements. All agreements, representations and warranties
made herein shall survive the delivery of the Note. This Loan Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns, except that the Borrower, Lakeshore and the
Lakes Mall shall not have the right to assign its rights hereunder or any
interest therein.
9.6 Governing Law. This Loan Agreement shall be governed and construed in
accordance with the laws of the State of Tennessee; except (a) that the
provisions hereof which relate to the payment of interest shall be governed by
(i) the laws of the United States or, (ii) the laws of the State of Tennessee,
whichever permits the Bank to charge the higher rate, as more particularly set
out in the Note, and (b) to the extent that the Liens in favor of the Bank, the
perfection thereof, and the rights and remedies of the Bank with respect
thereto, shall, under mandatory provisions of law, be governed by the laws of a
state other than Tennessee.
9.7 Execution in Counterparts. This Loan Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.
35
9.8 Terminology; Section Headings. All personal pronouns used in this Loan
Agreement whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice
versa. Section headings are for convenience only and neither limit nor amplify
the provisions of this Loan Agreement.
9.9 Enforceability of Agreement. Should any one or more of the provisions
of this Loan Agreement be determined to be illegal or unenforceable, all other
provisions, nevertheless, shall remain effective and binding on the parties
hereto.
9.10 Interest Limitations.
(a) The Loan and the Notes evidencing the Loan, including any renewals or
extensions thereof, may provide for the payment of any interest rate (i)
permissible at the time the contract to make the Loan is executed, (ii)
permissible at the time the Loan is made or any advance thereunder is made, or
(iii) permissible at the time of any renewal or extension of the loan or any
Note.
(b) It is the intention of the Bank, the Borrower, Lakeshore and the Lakes
Mall to comply strictly with applicable usury laws; and, accordingly, in no
event and upon no contingency shall the Bank ever be entitled to receive,
collect, or apply as interest any interest, fees, charges or other payments
equivalent to interest, in excess of the maximum rate which the Bank may
lawfully charge under applicable statutes and laws from time to time in effect;
and in the event that the holder of the Note ever receives, collects, or applies
as interest any such excess, such amount which, but for this provision, would be
excessive interest, shall be applied to the reduction of the principal amount of
the indebtedness thereby evidenced; and if the principal amount of the
indebtedness evidenced thereby, and all lawful interest thereon, is paid in
full, any remaining excess shall forthwith be paid to the Borrower, Lakeshore
and/or Lakes Mall or other party lawfully entitled thereto. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the highest rate which Bank may lawfully charge under applicable law
from time to time in effect, the Borrower, Lakeshore and/or Lakes Mall and the
Bank shall, to the maximum extent permitted under applicable law, characterize
any non-principal payment as a reasonable loan charge, rather than as interest.
Any provision hereof, or of any other agreement between the Bank and the
Borrower, Lakeshore and/or Lakes Mall, that operates to bind, obligate, or
compel the Borrower to pay interest in excess of such maximum rate shall be
construed to require the payment of the maximum rate only. The provisions of
this paragraph shall be given precedence over any other provision contained
herein or in any other agreement between the Bank and the Borrower, Lakeshore
and/or Lakes Mall that is in conflict with the provisions of this paragraph.
The Notes shall be governed and construed according to the statutes and
laws of the State of Tennessee from time to time in effect, except to the extent
that Section 85 of Title 12 of the United States Code (or other applicable
federal statue) may permit the charging of a higher rate of interest than
applicable state law, in which event such applicable federal statute, as amended
and supplemented from time to time shall govern and control the maximum rate of
interest permitted to be charged hereunder; it being intended that, as to the
maximum rate of interest which may be charged, received, and collected
hereunder, those applicable statutes and laws, whether state or federal, from
time to time in effect, which permit the charging of a higher rate of interest,
36
shall govern and control; provided, always, however, that in no event and under
no circumstances shall the Borrower, Lakeshore and/or Lakes Mall be liable for
the payment of interest in excess of the maximum rate permitted by such
applicable law, from time to time in effect.
9.11 Non-Control. In no event shall the Bank's rights hereunder be deemed
to indicate that the Bank is in control of the business, management or
properties of the Borrower, Lakeshore, Lakes Mall and/or any Related Entity or
has power over the daily management functions and operating decisions made by
the Borrower, Lakeshore, Lakes Mall and/or any Related Entity.
9.12 Loan Review; Extensions of Termination Date; Continuing Security.
(a) The specific Termination Date of Revolving Credit Loan mentioned in
Article One may be extended for additional periods of one (1) year. On each June
1 hereafter, so long as the Loan remains unpaid, Bank shall review the
performance of the Loan. If the Bank deems performance of the Loan acceptable,
it will renew the Loan for one (1) year from the then existing Termination Date
of Revolving Credit Loan. If the Bank renews the Loan at anytime or from time to
time prior to June 1, 2007, the Bank and the Borrower, Lakeshore and Lakes Mall
agree the Loan shall be renewed with covenants as contained in Sections 7.2, 7.3
and 7.4 of this Loan Agreement or such other covenants, terms and conditions as
may be mutually agreed upon by Borrower, Lakeshore and Lakes Mall Bank and Bank.
If Bank deems performance of the Loan not acceptable, Bank shall not be
obligated to extend the Termination Date of Revolving Credit Loan; however, the
Borrower, Lakeshore and Lakes Mall shall then have the right to repay the Loan
pursuant to the repayment provisions contained in the Notes. Assessment of
performance and the decision whether to extend the Termination Date of Revolving
Credit Loan shall be solely within Bank's discretion. The Bank will not deem the
performance of the Loan acceptable unless and until the Borrower provides to the
Bank, among other things, updated title commitments with respect to all
properties covered by any CBL Mortgage, which title commitments must be in form
and substance acceptable to the Bank and must contain no exceptions unacceptable
to the Bank. Bank shall notify Borrower of the results of its review of the Loan
no later than eleven (11) months prior to the then effective Termination Date of
the Revolving Credit Loan. If Bank elects not to renew the Loan, Bank shall not
perform or cause to be performed, except at Bank's expense unless an Event of
Default has occurred, any inspections, appraisals, surveys or similar items
between: (a) the date notice thereof is given Borrower or the Termination Date,
whichever first occurs, and (b) the date the Notes are repaid as provided
herein. Anything contained in the foregoing to the contrary notwithstanding,
upon any such extension, the Borrower, Lakeshore and Lakes Mall agree to pay to
the Bank (in addition to the commitment fees it has previously paid under this
Loan Agreement) an extension fee of Two Hundred Thousand and NO/100 Dollars
($200,000.00).
(b) Upon the specific Termination Date of Revolving Credit Loan so fixed in
Article One, or in the event of the extension of this Loan Agreement to a
subsequent Termination Date (when no effective extension is in force), the
Revolving Credit Loan and all other extensions of credit (unless sooner declared
to be due and payable by the Bank pursuant to the provisions hereof), and
subject to Borrower's election as set forth in subparagraph (a) above, shall
become due and payable for all purposes. Until all such indebtednesses,
37
liabilities and obligations secured by the CBL Mortgage are satisfied in full,
such termination shall not affect the security interest granted to Bank pursuant
to the CBL Mortgage, nor the duties, covenants, and obligations of the Borrower
therein and in this Loan Agreement; and all of such duties, covenants and
obligations shall remain in full force and effect until the Revolving Credit
Loan and all obligations under this Loan Agreement have been fully paid and
satisfied in all respects.
9.13 Fees and Expenses. The Borrower, Lakeshore and Lakes Mall agree to
pay, or reimburse the Bank for, the reasonable actual third party out-of-pocket
expenses, including counsel fees and fees of any accountants, inspectors or
other similar experts, as deemed necessary by the Bank, incurred by the Bank in
connection with the development, preparation, execution, amendment, recording,
(excluding the salary and expenses of Bank's employees and Bank's normal and
usual overhead expenses) or enforcement of, or the preservation of any rights
under this Loan Agreement, the Notes and any instrument or document now or
hereafter securing the and Revolving Credit Loan indebtednesses.
9.14 Time of Essence. Time is of the essence of this Loan Agreement, the
Notes and the other instruments and documents executed and delivered in
connection herewith.
9.15 Compromises, Releases, Etc. Bank is hereby authorized from time to
time, without notice to anyone, to make any sales, pledges, surrenders,
compromises, settlements, releases, indulgences, alterations, substitutions,
exchanges, changes in, modifications, or other dispositions including, without
limitation, cancellations, of all or any part of the Loan indebtedness, or of
any contract or instrument evidencing any thereof, or of any security or
collateral therefor, and/or to take any security for or guaranties upon any of
said indebtedness; and the liability of any guarantor, if any, shall not be in
any manner affected, diminished, or impaired thereby, or by any lack of
diligence, failure, neglect, or omission on the part of Bank to make any demand
or protest, or give any notice of dishonor or default, or to realize upon or
protect any of said indebtedness or any collateral or security therefor. Bank
shall have the right to apply such payments and credits first to the payment of
all its expenses, including costs and reasonable attorneys' fees, then to
interest due under the Note and then to principal due under the Note. Bank shall
be under no obligation, at any time, to first resort to, make demand on, file a
claim against, or exhaust its remedies against the Borrower, Lakeshore and/or
Lakes Mall, or its property or estate, or to resort to or exhaust its remedies
against any collateral, security, property, liens, or other rights whatsoever.
Upon the occurrence of an Event of Default, it is expressly agreed that Bank may
at any time make demand for payment on, or bring suit against, the Borrower,
Lakeshore and/or Lakes Mall and any guarantor, jointly or severally and may
compromise with any of them for such sums or on such terms as it may see fit,
and without notice or consent, the same being hereby expressly waived.
9.16 Joinder of Parent. Parent joins herein for the purpose of
acknowledging and consenting to the terms and provisions hereof.
9.17 Bank's Consent. Except as otherwise expressly provided herein, in any
instance hereunder where Bank's approval or consent is required or the exercise
of its judgment is required, the granting or denial of such approval or consent
and the exercise of such judgment shall be within the sole but reasonable
discretion of Bank, and Bank shall not, for any reason or to any extent, be
38
required to grant such approval or consent or exercise such judgment provided
that the Bank shall proceed at all times in good faith and in a commercially
reasonable manner.
9.18 Venue of Actions. As an integral part of the consideration for the
making of the loan, it is expressly understood and agreed that no suit or action
shall be commenced by the Borrower, Lakeshore, Lakes Mall, Related Entities, CBL
Holdings, Parent, by any guarantor, or by any successor, personal representative
or assignee of any of them, with respect to the loan contemplated hereby, or
with respect to this Loan Agreement or any other document or instrument which
now or hereafter evidences or secures all or any part of the loan indebtedness,
other than in a state court of competent jurisdiction in and for the County of
the State in which the principal place of business of the Bank is situated, or
in the United States District Court for the District in which the principal
place of business of the Bank is situated, and not elsewhere. Nothing in this
paragraph contained shall prohibit Bank from instituting suit in any court of
competent jurisdiction for the enforcement of its rights hereunder or in any
other document or instrument which evidences or secures the loan indebtedness.
9.19 Waiver of Right to Trial By Jury. EACH PARTY TO THIS LOAN AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION (a) ARISING UNDER THIS LOAN AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS LOAN AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS LOAN AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
9.20 Conflict. In the event of any conflict between the provisions hereof
and any other loan document during the continuance of this Loan Agreement
(including but not limited to any other documents received by the Bank via
assignment in connection with the Lakeshore Mall and the Lakes Mall), the
provisions of this Loan Agreement shall control.
9.21 Participation Agreement. The Borrower, Lakeshore and Lakes Mall
acknowledge that the Participation Agreement exists and that the Bank is
obligated, subject to the terms and conditions hereof, to fund One Hundred
Million Dollars ($100,000,000.00) to the Borrower but that of that amount ,
Compass Bank, AmSouth Bank, Branch Banking and Trust Company and Manufacturers
and Traders Trust Company are obligated, subject to the terms and conditions of
the Participation Agreement, to fund as follows: Compass is to fund Fifteen
Million and NO/100 Dollars ($15,000,000.00), AmSouth Bank is to fund Twenty Five
39
Million and NO/100 Dollars ($25,000,000.00), Branch Banking and Trust Company is
to fund Fifteen Million and NO/100 Dollars ($15,000,000.00) and Manufacturers
and Traders Trust Company to fund Twenty Million and NO/100 Dollars
($20,000,000.00).
(Signatures on Next Page)
40
IN WITNESS WHEREOF, the Borrower, Lakeshore, Lakes Mall, the Bank, CBL
Holdings and Parent have caused this Loan Agreement to be executed by their duly
authorized officers, managers and/or partners, all as of the day and year first
above written.
CBL & ASSOCIATES LIMITED PARTNERSHIP
BY: CBL HOLDINGS I, INC.,
Its Sole General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------
Title: ▇▇▇▇ ▇. ▇▇▇
----------------------------------
Vice Chairmand and Chief
Financial Officer
BORROWER
LAKESHORE/SEBRING LIMITED PARTNERSHIP
BY: CBL & ASSOCIATES LIMITED
PARTNERSHIP, It's sole General Partner
BY: CBL HOLDINGS I, INC.,
Its sole General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇
-------------------------------------
Title: ▇▇▇▇ ▇. ▇▇▇
----------------------------------
Vice Chairmand and Chief
Financial Officer
LAKESHORE
THE LAKES MALL, LLC
By: CBL & Associates Limited Partnership,
Its Managing Member
By: CBL Holdings I, Inc., its General
Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇
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Title: ▇▇▇▇ ▇. ▇▇▇
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Vice Chairmand and Chief
Financial Officer
LAKES MALL
CBL & ASSOCIATES PROPERTIES, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇
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Title: ▇▇▇▇ ▇. ▇▇▇
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Vice Chairmand and Chief
Financial Officer
PARENT/GUARANTOR
40
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice President
41
EXHIBIT "A"
Real property known as:
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Lakeshore Mall, Sebring, Florida
Pemberton Mall, Vicksburg, Mississippi
The Lakes Mall, Fruitport, Michigan
Towne Mall, Middleton, Ohio
all as more particularly described in the individual deeds of trust, deeds to
secure debt and/or mortgages applicable to the above described properties.
1
EXHIBIT "B"
PERMITTED ENCUMBRANCES
1. As described in the Mortgages.
1
EXHIBIT "C"
NOTES
1
EXHIBIT "D"
CHECKLIST FOR CLOSING
1
EXHIBIT "E"
NON-DEFAULT CERTIFICATE
For Fiscal Year Ended _______________, 20__.
For Fiscal Quarter Ended _______________, 20__.
The undersigned, a duly authorized officer of CBL & Associates Limited
Partnership, a Delaware limited partnership [referred to as "Borrower" in that
certain Amended and Restated Loan Agreement (the "Loan Agreement") dated as of
March 9, 2005 between Borrower, Lakeshore, Lakes Mall and First Tennessee Bank
National Association ("Bank")], certifies to said Bank, in accordance with the
terms and provisions of said Loan Agreement, as follows:
1. All of the representations and warranties set forth in the Loan Agreement are
and remain true and correct on and as of the date of this Certificate with the
same effect as though such representations and warranties had been made on and
as of this date except as otherwise previously disclosed to the Bank in writing.
2. As of the date hereof, neither Borrower, Lakeshore nor Lakes Mall has
knowledge of any Event of Default, as specified in Section 8 of the Loan
Agreement, nor any event which, upon notice, lapse of time or both, would
constitute an Event of Default, has occurred or is continuing.
3. As of the date hereof, Borrower is in full compliance with all financial
covenants contained in the Loan Agreement, and the following are true, accurate
and complete:
(a) The Tangible Net Worth (as defined in the Loan Agreement) is
$__________________________ as of ________________, 20___.
(b) The Total Liabilities to Gross Asset Value is _____ to _____
as of _____________________, 20__.
(c) The ratio of EBITDA to Debt Service Debt is ____ to ____ as
of ______________, 20__.
(d) The ratio of EBITDA to Interest Expense is ____ to ____ as
of _____________________, 20_____.
DATED this ______ day of ______________________, 20____.
CBL & ASSOCIATES LIMITED PARTNERSHIP
BY: CBL HOLDINGS I, INC.,
Its Sole General Partner
By:
-------------------------------------
Title:
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1
EXHIBIT "F"
LITIGATION
Disclosure Pursuant to Paragraph 5.5
See Exhibit "F-1" attached for description of all litigation.
ENVIRONMENTAL MATTERS
Disclosure pursuant to Paragraph 5.11
None.
1
JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT
COMPASS BANK as "Participant" under the terms of that certain Amended
and Restated Loan Agreement (the "Loan Agreement") dated effective as of March
9, 2005, between and among First Tennessee Bank National Association, CBL &
Associates Limited Partnership, Lakeshore/Sebring Limited Partnership and The
Lakes Mall, LLC, in consideration of the mutual agreements of the parties
thereto and of the undersigned therein contained, hereby joins as a party to
said Loan Agreement and agrees to perform all obligations to be performed on its
part thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended
and Restated Loan Agreement to be executed by its duly authorized officer
effective as of March 9, 2005.
COMPASS BANK
By: /s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President
1
JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT
AMSOUTH BANK as "Participant" under the terms of that certain Amended
and Restated Loan Agreement (the "Loan Agreement") dated effective as of March
9, 2005 between and among First Tennessee Bank National Association, CBL &
Associates Limited Partnership, Lakeshore/Sebring Limited Partnership and The
Lakes Mall, LLC, in consideration of the mutual agreements of the parties
thereto and of the undersigned therein contained, hereby joins as a party to
said Loan Agreement and agrees to perform all obligations to be performed on its
part thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended
and Restated Loan Agreement to be executed by its duly authorized officer
effective as of March 9, 2005.
AMSOUTH BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President
1
JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT
BRANCH BANKING AND TRUST COMPANY as "Participant" under the terms of
that certain Amended and Restated Loan Agreement (the "Loan Agreement") dated
effective as of March 9, 2005, between and among First Tennessee Bank National
Association, CBL & Associates Limited Partnership, Lakeshore/Sebring Limited
Partnership and The Lakes Mall, LLC, in consideration of the mutual agreements
of the parties thereto and of the undersigned therein contained, hereby joins as
a party to said Loan Agreement and agrees to perform all obligations to be
performed on its part thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended
and Restated Loan Agreement to be executed by its duly authorized officer
effective as of March 9, 2005.
BRANCH BANKING AND TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
1
JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT
MANUFACTURERS AND TRADERS TRUST COMPANY as "Participant" under the
terms of that certain Amended and Restated Loan Agreement (the "Loan Agreement")
dated effective as of March 9, 2005, between and among First Tennessee Bank
National Association, CBL & Associates Limited Partnership, Lakeshore/Sebring
Limited Partnership and The Lakes Mall, LLC, in consideration of the mutual
agreements of the parties thereto and of the undersigned therein contained,
hereby joins as a party to said Loan Agreement and agrees to perform all
obligations to be performed on its part thereunder.
IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended
and Restated Loan Agreement to be executed by its duly authorized officer
effective as of March 9, 2005.
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. Deck
-----------------------------------
▇▇▇▇▇▇ ▇. Deck, Vice President
1
