AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") amends
and restates in its entirety that certain Loan Agreement dated to be
effective February 24, 1997 between the parties hereto and is made to be
effective as of the 29 day of July, 1997, by and between CBL & ASSOCIATES
LIMITED PARTNERSHIP, a Delaware limited partnership, whose address is One
Park Place, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the
"Borrower"), and LAKESHORE/SEBRING LIMITED PARTNERSHIP, a Florida limited
partnership, whose address is the same as the Borrower's described above
("Lakeshore"), and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national
banking association organized and existing under the statutes of the
United States of America, with offices 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, 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 Eighty Million Dollars
($80,000,000.00) 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, formerly Society National Bank, Compass Bank and
AmSouth Bank, all as participants in the Loan have also agreed to make
certain portions of such loan and advances on the terms and conditions
herein set forth.
This Loan Agreement is currently being amended to increase the
revolving credit loan and to modify certain covenants.
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
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meanings to be applicable equally to both the singular and plural forms
of such terms) unless the context otherwise requires:
"Adjusted Loan Amount" means the combined Net Operating Income from
the properties described in the CBL Mortgage as of each July 1, January
1, April 1 and October 1, as the case may be, based upon the then
immediately preceding twelve (12) month period, divided by 1.25 with the
resulting figure being further divided by the applicable mortgage
constant of .1159.
"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.
"Agent" means ▇▇▇▇▇ Fargo Realty Advisors Funding, Incorporated, a
Colorado corporation as agent pursuant to the Credit Agreement dated July
28, 1994 between Borrower and Agent.
"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 Two
Million Five Hundred Thousand and NO/100 Dollars ($22,500,000.00).
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"Base Rate" means the base commercial rate of interest established
from time to time by Bank. The currently existing Base Rate is eight and
one quarter percent (8.25%) per annum.
"Borrowing Base" is the limitation on the aggregate Revolving Credit
Loan indebtedness which may be outstanding at any time during the term
of this Agreement. The Borrowing Base will be calculated each July 1,
January 1, April 1 and October 1. The Borrowing Base will be an amount
not to exceed the Borrower's Adjusted Loan Amount.
"Business Day" means a banking business day of the Bank.
"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.
"Capitalized Value" shall mean an amount, calculated as of any date,
equal to the quotient of (a) the sum of (i) Borrower's Funds From
Operations during the most recent quarter end, annualized plus (ii) the
Interest Expense used in calculating Borrower's Funds From Operations
pursuant to clause (i) above, and (b) nine percent (.09).
"CBL Holdings" means CBL Holdings I, Inc., a Delaware corporation
and the sole general partner of Borrower.
"CBL Management, Inc." means CBL & Associates Management, Inc., a
Delaware corporation.
"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, Coolsprings Crossing Limited
Partnership, East Towne Crossing Limited Partnership, Valley Crossing
Associates Limited Partnership, Walnut Square Associates Limited
Partnership, Lakeshore/Sebring Limited Partnership [Including the
Lakeshore Mortgage (New) and the Lakeshore Mortgage (Old)] and/or
Vicksburg Mall Associates, Ltd. and/or any other entity related to or
owned by Borrower and/or CBL & Associates Properties, Inc. and/or CBL
Holdings I, Inc. in favor of Bank covering their interest in the
properties described in Exhibit "A," attached hereto and made a part
hereof, referred to in Section 4.1(e) hereof.
"CBL Properties, Inc." means CBL & Associates Properties, Inc., a
Delaware corporation and a qualified public REIT and formerly until
MAY 21, 1997 the sole general partner of Borrower.
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"Closing Date" means the date set out in the first paragraph of this
Loan Agreement.
"Combined" means, as to any calculation hereunder, that such
calculation shall be made on a combined basis for Borrower, CBL Holdings,
CBL Properties, Inc. and CBL Management, Inc., with each such calculation
being made, (a) in respect of Borrower, on a consolidated basis for
Borrower and its Subsidiaries, (b) in respect of CBL Holdings, on a
consolidated basis for CBL Holdings and its Subsidiaries, (c) in respect
of CBL Properties, Inc., on a consolidated basis for CBL Properties, Inc.
and its Subsidiaries, and (d) in respect of CBL Management, Inc., on a
consolidated basis for CBL Management, Inc. and its Subsidiaries.
"Contingent Obligations" means, for any Person, any material
commitment, undertaking, Guarantee or material obligation constituting
a continuing liability under GAAP, but only to the extent the same are
required to be reflected on such Persons' audited financial statements.
"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 between the Borrower, ▇▇▇▇▇ Fargo Realty
Advisors Funding, Incorporated and others.
"Debt Coverage Ratio" shall mean, as of any date the same is
calculated, the ratio of (a) EBITDA for the fiscal quarter ending on or
most recently ended prior to such date to (b) Debt Service during such
fiscal quarter, in each case calculated on a Combined basis in accordance
with GAAP.
"Debt Service" means, with respect to Borrower, CBL Properties,
Inc., and their respective Subsidiaries for any period, the sum of (a)
Interest Expense of Borrower, CBL Properties, Inc. and their respective
Subsidiaries for such period, plus (b) regularly scheduled principal
payments on Indebtedness of Borrower, CBL Properties, Inc. and their
respective Subsidiaries during such period other than (x) in respect of
any period following the Termination Date, the scheduled principal
payments of the Term Out Amount made after the Termination Date, the
scheduled principal payments of the Term Out Amount made after the
Termination Date and (y) any regularly scheduled principal payment
payable on any Indebtedness which prepays such Indebtedness in full, to
the extent the amount of such final scheduled principal payment is
greater than the scheduled principal payment immediately preceding such
final scheduled principal payment, determined in each case on a Combined
basis in accordance with GAAP. For purposes of this definition, a
voluntary prepayment of Indebtedness shall not constitute a regularly
scheduled principal payment even if, under the terms of the agreement
governing such Indebtedness, the notice of prepayment has the effect of
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causing the amount of the prepayment to become due and payable on the
date set for such notice of such prepayment.
"EBITDA" means, for any period, the sum of (i) Net Income of
Borrower, CBL Properties, Inc. and their respective Subsidiaries for such
period (excluding equity in net earnings (or loss) of their
Unconsolidated Affiliates), plus (ii) depreciation and amortization
expense and other non-cash charges of Borrower, CBL Properties, Inc. and
their respective Subsidiaries for such period, plus (iii) interest
expense of Borrower, CBL Properties, Inc. and their respective
Subsidiaries for such period, plus (iv) income tax expense in respect of
such period, plus (v) cash dividends and distributions actually received
by Borrower, CBL Properties, Inc. and their respective Subsidiaries
during such period from Unconsolidated Affiliates, plus (vi)
extraordinary losses (and any unusual losses arising in or outside the
ordinary course of business of Borrower, CBL Properties, Inc. and their
respective Subsidiaries not included in extraordinary losses determined
in accordance with GAAP that have been reflected in the determination of
Net Income) for such period, minus (vii) extraordinary gains of Borrower,
CBL Properties, Inc. and their respective Subsidiaries (and any unusual
gains arising in or outside the ordinary course of business of Borrower,
CBL Properties, Inc. or such respective Subsidiaries not included in
extraordinary gains determined in accordance with GAAP that have been
reflected in the determination of Net Income) for such period, determined
in each case on a Combined basis in accordance with GAAP.
"Effective Date," which definition is used and only applies within
Section 7.9 hereof, means the date the Credit Agreement between the
Borrower and ▇▇▇▇▇ Fargo Realty Advisors Funding Incorporated 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.
"Event of Default" has the meaning assigned to that phrase in
Section 8.
"Funds from Operations" means, as to any period, an amount equal to
(a) income (loss) from operations of Borrower, CBL Properties, Inc. and
their respective Subsidiaries for such period, plus (b) depreciation and
amortization, plus (minus) (c) to the extent not included in clause (a)
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above, gain (loss) on the sales of outparcels made in the ordinary course
of business, and after adjustments for Unconsolidated Affiliates,
determined in each case on a Combined basis in accordance with GAAP.
Adjustments for Unconsolidated Affiliates will be calculated to reflect
funds from operations on the same basis.
"GAAP" shall mean generally accepted accounting principles applied
on a basis consistent with those which are to be used in making the
calculations for purposes of determining compliance with this Agreement.
All calculations made for the purposes of determining compliance with
this Agreement shall (except as may be otherwise expressly provided
herein) be made by application of generally accepted accounting
principles applied on a basis consistent with those used in preparation
of the annual and quarterly financial statements of CBL Properties, Inc.
furnished to the Securities and Exchange Commission.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay
(or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise), or (ii) entered into for the purpose
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against
losses in respect thereof (in whole or in part), provided that the term
"Guarantee" shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb has
a corresponding meaning.
"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.
"Indebtedness" shall mean, as applied to any Person at any time,
without duplication (a) all indebtedness, obligations or other
liabilities of such Person (i) for borrowed money or evidenced by debt
securities, debentures, acceptances, notes or other similar instruments,
and any accrued interest, fees and charges relating thereto; (ii) with
respect to letters of credit issued for such Person's account; (iii)
under agreements for the prospective purchase or repurchase assets other
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than obligations arising under unexercised option agreements; (iv) to
make future investments in any Person; (v) to pay the deferred purchase
price of property or services previously purchased or rendered, except
unsecured trade accounts payable and accrued expenses required to be
capitalized in accordance with GAAP; (b) all indebtedness, obligations
or other liabilities of such Person or others secured by a Lien on any
asset of such Person, whether or not such Person is otherwise obligated
on such indebtedness, obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of any foreign exchange contract
or any interest rate swap, cap or collar agreement or similar
arrangement, net of liabilities owed to such Person by the counterparties
thereon; (d) all shares of Capital Stock or equivalent ownership interest
subject (upon the occurrence of any contingency or otherwise) to
mandatory redemption prior to the date the Loan is scheduled to be repaid
in full; (e) obligations of others to the extent Guaranteed by such
Person or to the extent such Person is otherwise liable on a recourse
basis; and (f) such Person's pro rata share of non-recourse Indebtedness
of a partnership in which such Person is a partner (it being understood
that the remaining portion of such non-recourse partnership Indebtedness
shall not constitute Indebtedness of such Person).
"Interest Coverage Ratio" means, as of any date the same is
calculated, the ratio of (a) EBITDA for the fiscal quarter ending on or
most recently ended prior to such date to (b) Interest Expense for such
fiscal quarter, determined in each case on a Combined basis in accordance
with GAAP.
"Interest Expense" means, for any Person for any period, total
interest expense on Indebtedness of such Person, whether paid or accrued,
but without duplication (including the interest component of capital
leases), including, without limitation, (a) all commissions, discounts
and other fees and charges owed with respect to letters of credit, and
(b) one hundred percent (100%) of any interest expense, whether paid or
accrued, or any other Person for which such Person is wholly or partially
liable (whether by Guarantee, pursuant to Applicable Law or otherwise)
but excluding (i) interest on Reserved Construction Loan and (ii) swap
or other interest hedging breakage costs, all as determined in conformity
with GAAP.
"Investment" in any Person shall mean any investment, whether by
means of share purchase, loan, advance, extension of credit, capital
contribution or otherwise, in or to such Person, the Guarantee of any
Indebtedness of such Person, or the subordination of any claim against
such Person to other Indebtedness of such Person.
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"Lakeshore Note" means the promissory note from Lakeshore in the
original principal sum of $ 34,600,000.00 payable to the order of Agent,
later assigned by Agent 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 Agent later assigned
by Agent to Shopping Center Finance Corp. and subsequently assigned of
even date herewith to the Bank, as amended from time to time.
"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" means any interest in Property securing an obligation owed
to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on the common law, statute or contract, and
including but not limited to the security interest or lien arising from
a deed of trust, mortgage, encumbrance, pledge, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes, and
including but not limited to reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases,
and other title exceptions and encumbrances affecting Property.
"Loan" means the Revolving Credit Loan from the Bank to the
Borrower, including the Lakeshore Note which was purchased by the Bank.
"Loan Agreement" means this Loan Agreement between the Borrower,
Lakeshore and the Bank, and any modifications, amendments, or
replacements thereof, in whole or in part.
"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.
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"Net Income" means, with respect to Borrower, CBL Properties, Inc.,
and their respective Subsidiaries for any period, net earnings (or loss)
after deducting therefrom all operating expenses, income taxes and
reserves and net earnings (or loss) attributable to minority interests
in Subsidiaries for the period in question, determined in each case on
a Combined basis in accordance with GAAP. Without limiting the
generality of the foregoing, earnings (or losses) from the sale of
outparcels in the ordinary course of business shall be included in
determining Net Income.
"Net Operating Income" means, for any Property for the period in
question (a) any cash rentals, expense or cost reimbursements, or other
income or gain earned by Borrower with respect to such Property, less (b)
all cash expenses (excluding items capitalized under GAAP) incurred by
Borrower during such period in connection with the operation or leasing
of such Property.
"Net Worth" means, with respect to Borrower, CBL Properties, Inc.
and their Subsidiaries as of any date, the sum of (a) the total
shareholders' equity of CBL Properties, Inc., plus (b) the value of all
minority interests in Borrower, plus (c) depreciation and amortization
since December 31, 1993, minus (d) all intangible assets, determined on
a Combined basis in accordance with GAAP.
"Note" means the Revolving Credit Note or Notes executed by the
Borrower to the Bank in the original principal sums of Ten Million Six
Hundred Thousand Dollars ($10,600,000.00) (the "$10,600,000.00 Note") and
Forty Nine Million Dollars ($49,000,000.00), dated of even date herewith,
and the Lakeshore 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.
"Participant" means KeyBank National Association, Compass Bank,
AmSouth Bank, their 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 which shall be equal to Twenty Two
Million Five Hundred Thousand and NO/100 Dollars ($22,500,000.00).
"Participant's Proportionate Share (KeyBank)" means KeyBank's (or
any successor to such bank's interest in the Loan) undivided
participating interest in the Loan which shall be equal to Twenty Two
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Million Five Hundred Thousand and NO/100 Dollars ($22,500,000.00).
"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 which shall be equal to Twelve Million
Five Hundred Thousand Dollars ($12,500,000.00).
"Participants' Proportionate Share" means Participant's
Proportionate Share (KeyBank), Participant's Proportionate Share
(Compass), and Participant's Proportionate Share (AmSouth).
"Participation Agreement" means that certain Participation Agreement
entered into of even date herewith among Bank, KeyBank National
Association, Compass Bank, AmSouth Bank and/or any other participants in
the Loan, as amended from time to time.
"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;
(b) 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;
(c) 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;
(d) 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;
(e) such other liens and encumbrances to which Bank shall consent
in writing; and
(f) leases, licenses, rental agreements or other agreements for use
and occupancy of the subject property.
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof.
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"Project" or "Projects," which definition is used and only applies
within Section 7.9 hereof, means the real estate projects owned by
Borrower, a Wholly Owned Subsidiary of Borrower, a Subpartnership or, to
the extent approved by the Supermajority Lenders, any other Person and
"Project" shall mean any one of the Projects. The capitalized terms used
in this definition shall have the same meaning as provided in the Credit
Agreement.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.
"Reserved Construction Loan" shall mean a construction loan extended
to Borrower or a Subsidiary of Borrower for the construction of a project
in respect of which: (a) neither any monetary or material non-monetary
default nor any event of default exists; (b) interest on such loan has
been budgeted to accrue at a rate of not less than the Base Rate plus two
percent (2%) at the time the interest reserve account is established; (c)
the amount of such budgeted interest has been (i) included in the
principal amount of such loan and (ii) segregated into an interest
reserve account (which shall include any arrangement whereby loan
proceeds equal to such budgeted interest are reserved and only disbursed
to make interest payments in respect of such loan); (d) absent an event
of default or a monetary or material non-monetary default, such interest
can be paid out of such interest reserve account only for the purpose of
making interest payments on such loan; (e) the amount held in such
interest reserve account in respect of such loan, together with the net
income if any, from such project projected by the Agent in its reasonable
judgment, will be sufficient, as reasonably determined by the Agent from
time to time, to pay all Interest Expense on such loan until the date
that the EBITDA of the project being financed by such loan is anticipated
to be sufficient to pay all Interest Expense on such loan; and (f)
Borrower has delivered all certificates required by Section 6 hereof.
"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 and
Lakeshore's indebtedness to the Bank pursuant to Section 2 of this Loan
Agreement.
"Revolving Credit Note" means the Notes as described in Section 2.3
hereof and the Lakeshore Note.
"Subsidiary" shall mean, as to any Person, any other Person, more
than fifty percent (50%) of the outstanding shares of Capital Stock,
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partnership interest or other ownership interest, having ordinary voting
power to elect a majority of the board of directors or similar governing
body of such other Person (irrespective of whether or not at the time
stock or other ownership interests of any other class or classes of such
other Person shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned
or controlled by such Person or by one or more "Subsidiaries" of such
Person, and whose financial reports are prepared on a consolidated basis
with such Person. "Wholly Owned Subsidiary" shall mean any such Person
of which all of the shares of Capital Stock or ownership interests (other
than, in the case of a corporation, directors' qualifying shares) are so
owned or controlled. For purposes of this Agreement CBL Management, Inc.
shall be deemed to be a Subsidiary of Borrower.
"Termination Date of Revolving Credit Loan" shall mean the earlier
of (a) June 1, 1999, 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.
"Term Out Amount" means the then outstanding principal balance of
the Loan due and owing the Bank under the Note, if the Bank elects not
to extend the existing Maturity Date and the Borrower elects to cap the
line of credit as provided in the Note.
"Total Obligations" means, as of any date, the sum (without
duplication) of (a) the Indebtedness of Borrower, CBL Properties, Inc.
and their respective Subsidiaries (other than Indebtedness described in
clauses (a)(iii) and (a)(iv) of the definition thereof); plus (b) the
aggregate amount of Contingent Obligations of Borrower, CBL Properties,
Inc. and their respective Subsidiaries in respect of Indebtedness (other
than Indebtedness described in clauses (a)(iii) and (a)(iv) of the
definition thereof); plus (c) Borrower's, CBL Properties, Inc's or their
respective Subsidiaries' proportionate share of Indebtedness (other than
Indebtedness described in clauses (a)(iii) and (a)(iv) of the definition
thereof) of any Unconsolidated Affiliate, whether or not Borrower, CBL
Properties, Inc. or such Subsidiary is obligated on such Indebtedness;
plus (d) all other amounts which would be classified as a liability on
the consolidated balance sheets of Borrower or CBL Properties, Inc.,
determined in each case on a Combined basis in accordance with GAAP.
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"Unconsolidated Affiliate" shall mean, in respect of 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.
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.
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 and letter of credit
advances to the Borrower from time to time, from the Closing Date until
the Termination Date of Revolving Credit Loan, in an aggregate principal
amount not to exceed, at any one time outstanding, the lesser of
(a) Eighty Million Dollars ($80,000,000.00) minus the sum, if any,
applicable under the provisions of Section 2.8 hereof; 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 the Note or the Lakeshore Note, 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.
2.3 The Note and Interest. The Revolving Credit Loan shall be
evidenced by two (2) promissory notes of the Borrower and one (1)
promissory note of Lakeshore, each payable to the order of the Bank in
the aggregate principal amount of Eighty Million Dollars
($80,000,000.00), in form substantially the same as the copy of the
Revolving Credit Note and the Lakeshore Note 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
August 1, 1997 provided the Bank has in each instance mailed to the
Borrower a billing notice at least ten (10) days prior thereto setting
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forth the payment amount next due, with the final installment of
interest, together with the entire outstanding principal balance of the
Revolving Credit Loan, being 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 one (1) year LIBOR Rate shall be made by
the Borrower and Lakeshore (but the rate selected by Lakeshore 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 nor Lakeshore may ever select a rate
period which exceeds the Termination Date of the Revolving Credit Loan.
2.4 Commitment Fee/Servicing Fee. On the Closing Date, the
Borrower agrees to pay to the Bank in addition to the commitment fee it
paid in: (a) March of 1994 in the amount of Seventy-Five Thousand Dollars
($75,000.00); (b) November of 1994 in the amount of Fifty Thousand
Dollars ($50,000.00); (c) July of 1995 in the amount of No Dollars
($-0-); (d) March of 1996 in the amount of Eighty Five Thousand and NO/100
Dollars ($85,000.00); and (e) February of 1997 in the amount of One
Hundred Ninety Thousand and no/100 Dollars ($190,000.00), a commitment
fee in the amount of
$-0- in consideration of the Bank's agreement to make additional funds
available to Borrower under the terms and provisions hereof from the
Closing Date until the initial Termination Date of Revolving Credit Loan
specified in Section 1 hereof. In addition to the commitment fee, on
each November 2 hereafter, the Borrower shall pay to the Bank a servicing
fee in the amount of Twenty Four Thousand and NO/100 Dollars ($24,000.00)
for the Bank's services in connection with administering the Loan
participation with Participant. The servicing fee shall belong solely
to the Bank and the Participant shall have no interest therein. Borrower
agrees 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. In the event that Borrower and Bank shall hereafter
mutually agree to extend the term of the Bank's commitment hereunder,
they may also agree at that time as to an additional commitment fee, if
any, to be paid for such further commitment by the Bank, but not to
exceed the maximum permitted by applicable law.
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 hereof including Section 2.8 hereof, without
penalty, borrow, repay and reborrow amounts under the Revolving Credit
Note and the Lakeshore Note, first from the Ten Million Six Hundred
Thousand Dollars ($10,600,000.00) Note, then from the Forty Nine Million
14
Dollars ($49,000,000.00) Note, then from the Lakeshore Note and principal
payments received shall be applied by the Bank to the Revolving Credit
Note and the Lakeshore Note 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.
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 Secondary Financing by CBL Properties, Inc. CBL Properties,
Inc. was formerly the general partner of the Borrower. It is also a real
estate investment trust. In the event CBL Properties, Inc. does any
secondary offering of its securities, it will 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.
2.8 Cap On Loan. Notwithstanding anything contained in this Loan
Agreement to the contrary, if at any time the Bank does not have a
first-in-priority lien on the Florida property (Lakeshore Mall)
pursuant to the Lakeshore Mortgage up to the sum of Thirty One Million Dollars
($31,000,000.00) the Loan shall be capped at Forty Nine Million Dollars
($49,000,000.00).
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 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
15
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 Eighty Million Dollars ($80,000,000.00) 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 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
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.
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 hereunder 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 Note.
(c) The Lakeshore Note.
(d) The CBL Mortgage, the Lakeshore Mortgage together with a title
commitment from a title insurance company acceptable to the Bank,
16
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; provided, however,
with respect to the Florida (Lakeshore Mall) and Mississippi (Pemberton
Mall) properties being added as collateral for the Loan, the Bank, in its
sole discretion may require only a title report and may not require the
issuance of a mortgagee's loan policy.
(e) Current draft financial statements of the Borrower in form
satisfactory to the Bank to be held by the Bank in strict confidence.
(f) Certified copy of Borrower's limited partnership agreement and
certificate of limited partnership, and all amendments thereto and a
certificate of existence for the Borrower.
(g) Certified corporate resolutions of Borrower's general partner,
and certificate(s) of existence for Borrower's general partner from the
state of its incorporation and such other states as Bank shall require,
together with a copy of the charter and bylaws of the Borrower's general
partner.
(h) The opinion of counsel for Borrower and the Borrower's general
partner, that the transactions herein contemplated have been duly
authorized by all requisite corporate and partnership 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.
(i) 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.
(j) Environmental audits of the properties described in the CBL
Mortgage.
(k) Current 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 survey shall contain no set of facts
objectionable to the Bank and shall be accompanied by the Bank's usual
survey certificate.
(l) Copies of the appraisals of the real estate described in
Exhibit "A" attached hereto.
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(m) The Guaranty Agreements of the Borrower guarantying the
Lakeshore Note and of CBL Properties, Inc. guarantying the Loan.
(n) 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 Lakeshore 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. Each of the Warranties and
Representations of the Borrower and Lakeshore, as set out in Section 5
hereof shall remain true and correct in all material respects as of the
date of such Loan advance.
(c) 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.
(d) 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 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 and Lakeshore represent and warrant that:
5.1 Partnership 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
18
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.
5.2 Power and Authority. The execution, delivery and performance
of the Loan Agreement, the Note, the CBL Mortgage and the other loan and
collateral documents executed pursuant thereto by the Borrower and/or
Lakeshore have been duly authorized by all requisite action and, to the
best of Borrower's and Lakeshore's knowledge, will not violate any
provision of law, any order of any court or other agency of government,
the limited partnership agreement of the Borrower or Lakeshore, any
provision of any indenture, agreement or other instrument to which
Borrower and/or Lakeshore is a party, or by which Borrower's and/or
Lakeshore's 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 and/or Lakeshore, except for liens and other
encumbrances provided for and securing the indebtedness covered by this
Loan Agreement.
5.3 Financial Condition. (a) (i) The audited balance sheet of
Borrower and Lakeshore for the fiscal year ended as of December 31, 1995,
and the related statement of income and changes in financial conditions
for the year then ended, and (ii) the unaudited interim balance sheet of
Borrower and Lakeshore for September 30, 1996 and the related statement
of income and changes in financial conditions 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 Borrower and
Lakeshore 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 Generally Accepted
Accounting Principles applied on a consistent basis maintained through
the period involved.
(b) There has been no substantial adverse change in the business,
properties or condition, financial or otherwise, of Borrower and/or
Lakeshore since September 30, 1996.
(c) (i) The audited balance sheet of CBL Properties, Inc. for the
fiscal year ended as December 31, 1995, the unaudited balance sheet of
CBL Properties, Inc. for the period ended September 30, 1996, and the
related statement of income and changes in financial conditions for the
year ended 1995 and the period ended September 30, 1996, 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
19
fairly present the financial condition of CBL Properties, Inc. 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 Generally Accepted Accounting Principles
applied on a consistent basis maintained through the period involved.
(d) There has been no substantial adverse change in the business,
properties or condition, financial or otherwise, of CBL Properties, Inc.
since September 30, 1996.
(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 Lakeshore 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 and Lakeshore
threatened against or affecting Borrower and/or Lakeshore, or any
properties or rights of Borrower and/or Lakeshore, which, if adversely
determined, would materially adversely affect the financial or any other
condition of Borrower and/or Lakeshore except as set forth in Exhibit "F"
attached hereto.
5.6 Taxes. Borrower and Lakeshore 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 and Lakeshore's
opinions, Borrower and Lakeshore are not a party to any agreement or
instrument or subject to any partnership agreement restrictions adversely
affecting its business, properties or assets, operations or condition
(financial or otherwise) other than this agreement, other bank loan or
property partnership agreements that contain certain restrictive
covenants or other agreements entered into in the ordinary course of
business.
20
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
and/or Lakeshore. 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 Lakeshore possess all
necessary patents, trademarks, trade names, copyrights, and licenses
necessary to the conduct of its businesses.
5.10 ERISA. To the best of Borrower's and Lakeshore's knowledge
and belief, Borrower is 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. 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 and/or Lakeshore 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
and/or Lakeshore except as set forth in Exhibit "F" attached hereto.
5.12 Ownership of Borrower. As of the date hereof, CBL Holdings
owns an approximate ___% general partnership interest in the Borrower.
As of the date hereof, CBL Properties, Inc. owns an approximate 60%
____________ partnership interest in the Borrower. As of the date
hereof, CBL & Associates, Inc. and its affiliates, officers and key
employees owns an approximate 40% limited partnership interest in the
Borrower. As of the date hereof, CBL Management, Inc. owns an
approximate ____% _________________ partnership interest in the Borrower.
The Borrower has no other general partners. As of the date hereof the
Borrower owns 100% of the partnership interests in Lakeshore.
5.13 Outstanding Balance on Lakeshore Note. As of the date hereof,
the outstanding unpaid principal balance of the Lakeshore Note is
21
$18,000,000.00 and the undisbursed amount of the Lakeshore Note is
$2,400,000.00 and no defenses or offsets exist against the holder of the
Lakeshore Note or otherwise.
SECTION 6: AFFIRMATIVE COVENANTS OF BORROWER AND LAKESHORE
Borrower and Lakeshore covenant and agree that from the date hereof
and until payment in full of the principal of and interest on
indebtednesses evidenced by the Note and the Lakeshore Note, unless the
Bank shall otherwise consent in writing, such consent to be at the
discretion of the Bank, Borrower and Lakeshore will:
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 Borrower's and Lakeshore's
property and assets 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 amount as shall be satisfactory to Bank, with loss payable
22
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 and/or to
Lakeshore.
(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 and/or Lakeshore. The Borrower and Lakeshore
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 to the Bank (whether matured or unmatured) or, at Bank's option,
released to the Borrower or Lakeshore, 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
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 and Lakeshore 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 Note or, if Bank has elected to
23
pay same, Borrower shall immediately reimburse Bank therefor upon the
request of the Bank; provided, however Borrower shall not be required to
pay or reimburse so long as Borrower is contesting the tax and/or
penalties in good faith and through continuous and appropriate
proceedings.
6.5 Financial Reports and Other Data. Furnish to the Bank as soon
as available and in any event within ninety (90) days after the end of
each fiscal year of Borrower and Lakeshore, respectively, an unqualified
audit as of the close of such fiscal year of Borrower and Lakeshore,
including a balance sheet and statement of income and surplus of Borrower
and Lakeshore together with the unqualified audit report and opinion of
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Company, 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, within forty-five (45)
days after the end of each fiscal quarter, (i) financial statements
similar to those described above for Borrower and for CBL Properties,
Inc., not audited but certified by the Chief Financial Officer or
Controller of Borrower and CBL Properties, Inc., as the case may be, such
balance sheets to be as of the end of such quarter and such statements
of income and surplus 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; and (ii)
a Non-Default Certificate in the form prescribed on Exhibit "E" Attached
hereto and made a part hereof; and, within thirty (30) days after the end
of each fiscal quarter, rent rolls and operating statements related to
the properties described in the CBL Mortgage.
6.6 Additional Information. Furnish such other information
regarding the operations, business affairs and financial condition of the
Borrower and/or Lakeshore 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 all such information shall be maintained in strict
confidence. Provided, however, the Borrower and Lakeshore shall not be
required to divulge the terms of other financing arrangements with other
lending institutions if and to the extent Borrower and/or Lakeshore is
prohibited by contractual agreement with such lending institutions from
disclosing such information with the exception that Borrower and
Lakeshore 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
24
defaults would constitute an Event of Default hereunder. Borrower and
Lakeshore shall not enter into any such contractual arrangement whereby
the Borrower or Lakeshore is prohibited from disclosing such financial
arrangements, without providing Bank with written notice of the nature
of such prohibitions. In addition, Borrower and Lakeshore shall not
enter into any such arrangement while any Event of Default hereunder
exists beyond any applicable cure periods.
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 Lakeshore 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 and/or Lakeshore'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 of Borrower's
and Lakeshore's 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
and/or Lakeshore'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/pr Lakeshore which are subject to the CBL
Mortgage.
6.10 Minimum Net Worth. Borrower shall not permit Net Worth at any
time to be less than an amount equal to $410,000,000.00 plus ninety
percent (90%) of the net proceeds or value (whether cash, property or
otherwise) received by CBL Properties, Inc. or Borrower from any issuance
after the effective date of this Loan Agreement of any shares of Capital
Stock of CBL Properties, Inc., any operating partnership units of
Borrower or any shares of Capital Stock or other equity interest in any
Subsidiary of Borrower.
6.11 Total Obligations to Capitalized Value. Maintain at all times
beginning on the Closing Date, a ratio of Total Obligations to
Capitalized Value of not more than .60 to 1.00.
6.12 Appraisals. Deliver to the Bank upon the Bank's request but,
for each property, no more frequently than once per every eighteen (18)
month period, reappraisals of the property or properties described in the
CBL Mortgage.
25
6.13 Interest Coverage Ratio. Borrower shall not permit, as of the
last day of any fiscal quarter, the Interest Coverage Ratio to be less
than 2.00 to 1.00.
6.14 Debt Coverage Ratio. Borrower shall not permit, as of the
last day of any fiscal quarter of Borrower, the Debt Coverage Ratio to
be less than 1.75 to 1.00.
6.15 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 (the "Lakeshore Principal
Balance") plus accrued interest.
SECTION 7: NEGATIVE COVENANTS OF BORROWER AND LAKESHORE
Borrower and Lakeshore 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 and
Lakeshore will not, either directly or indirectly:
7.1 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 Note, which indebtedness does not exceed Two Hundred
Fifty Thousand Dollars ($250,000.00) in the aggregate per property and
is used for renovation of the property or properties described in the CBL
Mortgage.
7.2 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 Note and/or
the Lakeshore Note;
(b) Existing liens securing indebtednesses permitted under
Section 7.1 above;
(c) Permitted Encumbrances (as defined at Section 1); and
(d) Liens securing indebtedness permitted under Section 7.1 above.
26
7.3 Sale of Assets. Sell, lease, convert, transfer or dispose
(other than in the normal course of business) of all or a substantial
part of its assets for less than book value or fair market consideration
without the Bank's prior written consent; provided, however, while the
Revolving Credit Loan is outstanding, the Borrower and Lakeshore may not
sell in a single transaction or related series of transactions properties
whose GAAP base value exceeds twenty percent (20%) of the GAAP book value
of the Borrower's assets, without the Bank's approval or review. All
transfers, whether or not the Bank's approval shall be required as set
forth above, shall be reported to the Bank.
7.4 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.
7.5 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 interest in Borrower
and/or Lakeshore, 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
partnership capital or otherwise) in respect of, any partnership interest
in Borrower and/or Lakeshore; or without the consent of Bank, pay any fee
or other compensation of any nature to or for the benefit of CBL &
Associates, Inc., CBL Holdings, and/or CBL Properties, Inc. and/or their
affiliates, officers or key employees (the "Distributees").
Notwithstanding anything stated in the foregoing to the contrary, (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 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.
7.6 Loans to Officers and Employees. Permit or allow loans to
officers and employees of Borrower 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 Properties
Management, Inc.
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7.7 Limitations on Floating Rate Indebtedness. Incur, assume or
suffer to exist any outstanding indebtedness bearing interest at a
variable rate that fluctuates during the scheduled life of such
indebtedness (other than indebtedness under Reserved Construction Loans,
as that term is defined hereinafter) in an aggregate principal amount in
excess of $175,000,000.00 at any one time outstanding unless Borrower has
obtained an interest rate swap, cap or collar agreement or similar
arrangement with a recognized investment grade financial institution
which prevents the all-in effective interest rate payable by Borrower
with respect to the principal amount of such indebtedness in excess of
$175,000,000.00 (including base rate, applicable margin and reserve and
similar costs) from increasing above the rate set forth below with
respect to such indebtedness:
Principal Amount in
Excess of $175,000,000.00 Interest Rate
Less than or equal
to $50,000,000.00 8.5%
Greater than
$50,000,000.00 and
less than or equal
to $100,000,000.00 8.0%
Greater than
$100,000,000.00 and
less than or equal
to $150,000,000.00 7.5%
Greater than
$150,000,000.00 7.0%
For purposes of this Loan Agreement, "Reserved Construction
Loan" shall mean a construction loan extended to Borrower or Lakeshore
or to a subsidiary of Borrower for the construction of a project in
respect to which (a) neither any monetary or material non-monetary
default nor any event of default exists; (b) interest on such loan has
been budgeted to accrue at a rate of not less than the Base Rate plus two
percent (2%) at the time the interest reserve account is established; (c)
the amount of such budgeted interest has been (i) included in the
principal amount of such loan and (ii) segregated into an interest
reserve account (which shall include any arrangement whereby loan
proceeds equal to such budgeted interest are reserved and only disbursed
to make interest payments with respect to such loan); (d) absent an event
of default or a monetary or material non-monetary default, such interest
can be paid out of such interest reserve account only for the purpose of
making interest payments on such loan; (e) the amount held in such
28
interest reserve account with respect to such loan, together with the net
income, if any, from such project projected by the Bank in its reasonable
judgment, will be sufficient, as reasonably determined by the Bank from
time to time, to pay all interest expense on such loan until the date
that the earnings before income, taxes, depreciation and amortization of
the project being financed by such loan is anticipated to be sufficient
to pay all interest expense on such loan; and (f) Borrower has delivered
all certificates required by this Loan Agreement.
7.8 Limitations on Actions Against Bank and Participants. Take any
action against:
(a) Bank, if any Participant fails or refuses to fund for the
account of Borrower and/or Lakeshore or to Bank for the benefit of
Borrower and/or Lakeshore, such Participant's respective Proportionate
Share and such failure or refusal has not been caused by Bank's breach
of this Loan Agreement; or
(b) any Participant, if Bank fails or refuses to fund for the
account of Borrower and/or Lakeshore any Participant's Proportionate
Share, to the extent such Participant's Proportionate Share has been
received by Bank; or
(c) any Participant, if Bank fails or refuses to fund for the
account of Borrower and/or Lakeshore Bank's Proportionate Share and such
failure has not been caused by such Participant's breach of this Loan
Agreement or the Participation Agreement. Borrower's and Lakeshore'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.
7.9 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 to exceed the following percentages of Borrower's 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 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
Net Worth;
(ii) developed real estate used primarily for non-retail
purposes, such that the aggregate book value of such real estate (other
29
than the real estate located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇)
exceeds ten percent (10%) of Net Worth;
(iii) Capital Stock of any Person, such that the aggregate
value of such Capital Stock in Unconsolidated Affiliates other than CBL
Management, Inc., calculated on the basis of the lower of cost or market,
exceeds ten percent (10%) of Net Worth;
(iv) Mortgages, such that the aggregate principal amount
secured by Mortgages acquired by Borrower after the Effective Date
exceeds ten percent (10%) of Net Worth;
(v) Investments made after the date hereof in partnerships,
joint ventures and other non-corporate Persons accounted for 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 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 Agent, 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 Agent 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 Sections 6.8, 6.11, 6.12,
6.13, 6.14, 6.15, 6.17 or 6.18 of the loan documents which exist between
Borrower and Agent.
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 and/or
Lakeshore defaults in the payment as and when due of principal or
30
interest on any Note or the Lakeshore 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 and/or Lakeshore
thereof; or the Borrower and/or Lakeshore 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; or
8.2 Payment of Obligations to Others. The Borrower and/or
Lakeshore defaults in the payment as and when due of any other
indebtedness or obligation but only if: (a) such indebtedness or
obligation is with recourse to the Borrower and/or Lakeshore; and (b) the
effect of such default is to accelerate the maturity of such indebtedness
or obligation, or the effect of such default is to permit the holder
thereof to cause such indebtedness or obligation to become due prior to
its stated maturity; and (c) the default is not cured within the
applicable cure period, if any, or subsequently waived by the lender to
whom payment is owed. Provided, however, even if such indebtedness or
obligation is with recourse to the Borrower and/or Lakeshore, the
Borrower and Lakeshore will not be considered in default hereunder if the
default is either: (a) a monetary default which does not exceed One
Million Dollars ($1,000,000.00) and is not a failure to pay a normal
monthly, quarterly or other periodic principal or interest installment
due; or, (b) is being contested by the Borrower and/or Lakeshore in good
faith through appropriate proceedings acceptable to Bank; or
8.3 Performance of Obligations to Bank. The Borrower and/or
Lakeshore defaults with respect to the performance of any non-monetary
obligation incurred in connection with the Loan other than its
obligations under Section 7.8 hereof and such default continues for more
thirty (30) days following mailing of notice thereof from Bank to
Borrower and/or Lakeshore, or, if such default is incapable of cure
within such thirty (30) day period, Borrower and/or Lakeshore fails to
diligently, continuously and in good faith pursue such cure to
completion; or the Borrower and/or Lakeshore 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 an
such default continues for more thirty (30) days following mailing of
notice thereof from Bank to Borrower and/or Lakeshore, as the case may
be, or, if such default is incapable of cure within such thirty (30) day
period, Borrower and/or Lakeshore 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
31
incurred in connection with any recourse indebtedness for borrowed money
owed to a lender other than Bank, if the default even if subsequently
waived by the Lender is considered a material default by the Bank and if
the default is not cured within the applicable cure period provided by
the lender to whom such performance is owed; provided, however, if the
indebtedness is in an amount less that $1,000,000.00, or if the lender's
declaration of default is being continuously and diligently contested by
the Borrower and/or Lakeshore in good faith through appropriate
proceedings, such default shall not constitute a default hereunder; or
8.5 Representation or Warranty. Any representation or warranty
made by the Borrower and/or Lakeshore 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 CBL Holdings or
CBL Properties, Inc. 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
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 CBL
Holdings or CBL Properties, Inc., in which an order for relief is entered
against Borrower or CBL Properties, Inc. or which remains undismissed for
a period of ninety (90) days or more; or Borrower or Lakeshore or CBL
Holdings or CBL Properties, Inc. 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 Borrower or Lakeshore or CBL Holdings or CBL Properties, Inc.
shall generally not pay its debts as such debts become due; or
8.7 Concealment of Property, Etc. The Borrower or Lakeshore or CBL
Holdings or CBL Properties, Inc. 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
32
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 one of the following persons: (a) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, (b) ▇▇▇▇
▇. ▇▇▇, (c) ▇▇▇ ▇▇▇▇▇▇, or (d) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, 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. CBL & Associates, Inc., its affiliates,
officers and key employees shall have, through sale or transfer, reduced
their aggregate partnership interest in Borrower (which, for this
purpose, shall include a proportionate share of CBL Holdings' and CBL
Properties, Inc.'s partnership interest in Borrower equal to their
proportionate shareholding in CBL Holdings and CBL Properties, Inc.) to
less than 50% of such partnership interests owned by them on November 7,
1993. Provided, however, if the change in ownership occurs as a result
of actions taken by Borrower in compliance with Section 2.7 of this Loan
Agreement, no such change of ownership shall result in an Event of
Default hereunder; or
8.10 Loan Documents Terminated or Void. This Loan Agreement, the
Note, or any instrument securing the 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 and/or Lakeshore shall deny it has any or further liability
under this Loan Agreement or the Note, respectively; or
8.11 Covenants. The Borrower or Lakeshore or any grantor under any
CBL Mortgage defaults in the performance or observance of any covenant,
agreement or undertaking on its part to be performed or observed,
contained herein, in the Security Agreement, 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 Lakeshore and/or such grantor under any CBL Mortgage
thereof; or
8.12 Breach of Section 7.8 of this Loan Agreement. The Borrower
and/or Lakeshore shall fail to observe or perform its obligations to the
33
Bank, and/or any Participant under Section 7.8 of this Loan Agreement;
8.13 Placement of Liens on Property. The Borrower or any other
grantor of a CBL Mortgage shall, without the prior written consent of the
Bank, 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 the Lakeshore Mortgage or any
other 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
Agreement; and the Bank may at its option record the Lakeshore Mortgage
(New); and the Bank may, at its option, thereupon declare the entire
unpaid principal balances of the Note of Borrower and the Lakeshore Note,
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 the Note
and/or the Lakeshore 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, the Note
or the Lakeshore Note 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.
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 and/or Lakeshore, to
it at c/o CBL & Associates Properties, Inc., One Park Place, ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President; 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 business days after
34
mailing, whichever is earlier; or (ii) if delivered, upon delivery and
receipt of an executed acknowledgment of receipt by the party to whom
delivery is made.
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 and Lakeshore 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 Agreement (including, without limitation,
enforcement of this 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.
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 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
35
deemed to be an original and all of which taken together shall constitute
but one and the same instrument.
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 Note 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 the Note.
(b) It is the intention of the Bank and the Borrower 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, 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 and/or Lakeshore 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
and/or Lakeshore, 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 and/or
36
Lakeshore that is in conflict with the provisions of this paragraph.
The Note and the Lakeshore Note 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, shall govern and control; provided, always, however, that
in no event and under no circumstances shall the Borrower and/or
Lakeshore 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 and/or Lakeshore or has power
over the daily management functions and operating decisions made by the
Borrower and/or Lakeshore.
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 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 shall then have the right to repay the Loan
pursuant to the repayment provisions contained in the Note. 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
37
at Bank's expense, 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 Note is
repaid as provided herein.
(b) Upon the specific Termination Date of Revolving Credit Loan so
fixed in Article One, or in the event of the extension of this 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, 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
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 agrees 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 Note, 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,
38
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 and/or Lakeshore, 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 and/or Lakeshore 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 CBL Properties, Inc. CBL Properties, Inc. joins
herein for the purpose of acknowledging and consenting to the terms and
provisions of Section 2.7 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 discretion of Bank, and Bank shall not, for any
reason or to any extent, be 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. Bank may
consult with counsel, and the written advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
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, CBL
Holdings, CBL Properties, Inc., 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
40
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
AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THIS 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 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 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
Agreement (including but not limited to the Construction Loan Agreement
and any other documents received by the Bank via assignment in connection
with the Lakeshore Mall), the provisions of this Agreement shall control.
9.21 Participation Agreement. The Borrower and Lakeshore
acknowledge that the Participation Agreement exists and that the Bank is
obligated, subject to the terms and conditions hereof, to fund Eighty
Million Dollars ($80,000,000.00) to the Borrower but that of that amount
KeyBank National Association, formerly Society National Bank and AmSouth
Bank are obligated, subject to the terms and conditions of the
Participation Agreement, to fund Twenty Two Million Five Hundred Thousand
Dollars ($22,500,000.00) each to the Bank and Compass Bank is obligated,
subject to the terms and conditions of the Participation Agreement, to
fund Twelve Million Five Hundred Thousand and NO/100 Dollars
($12,500,000.00) to the Bank.
40
(Signatures on Next Page)
IN WITNESS WHEREOF, the Borrower, Lakeshore, the Bank, CBL Holdings
and CBL Properties, Inc. have caused this Agreement to be executed by
their duly authorized officers and/or partner, all as of the day and year
first above written.
CBL & ASSOCIATES LIMITED PARTNERSHIP
BY: CBL HOLDINGS I, INC.,
Its Sole General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇
----------------------
By: ▇▇▇▇ ▇. ▇▇▇
----------------------
Title: Executive Vice President
----------------------
BORROWER
LAKESHORE/SEBRING LIMITED PARTNERSHIP
BY: CBL & ASSOCIATES LIMITED PARTNERSHIP,
It's sole General Partner
BY: CBL HOLDINGS I, INC.,
Its sole General Partner
/s/ ▇▇▇▇ ▇. ▇▇▇
----------------------
By: ▇▇▇▇ ▇. ▇▇▇
----------------------
Title: Executive Vice President
----------------------
LAKESHORE
CBL & ASSOCIATES PROPERTIES, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇
----------------------
By: ▇▇▇▇ ▇. ▇▇▇
----------------------
Title: Executive Vice President
----------------------
GUARANTOR
CBL HOLDINGS I, INC.
/s/ ▇▇▇▇ ▇. ▇▇▇
----------------------
By: ▇▇▇▇ ▇. ▇▇▇
----------------------
Title: Executive Vice President
----------------------
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By:________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice
President
BANK
41
EXHIBIT "A"
Real property known as:
Coolsprings Crossing located in Franklin, TN
Valley Crossing located in Hickory, NC
East Towne Crossing located in Knoxville, TN
▇▇▇▇ Ribaut Square located in Beaufort, SC
Garden City Plaza, Garden City, Kansas
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Ladies Island, Beaufort, South Carolina
▇▇▇▇▇▇▇ Square, Big Rapids, Michigan
Walnut Square Mall, Dalton, Georgia
Lakeshore Mall, Sebring, Florida
Pemberton Mall, Vicksburg, Mississippi
all as more particularly described in the individual deeds of trust
and/or mortgages applicable to the above described properties.
42
EXHIBIT "B"
PERMITTED ENCUMBRANCES
1. As described in the Mortgages.
43
EXHIBIT "C"
REVOLVING CREDIT NOTES AND LAKESHORE NOTE
44
EXHIBIT "D"
CHECKLIST FOR CLOSING
45
EXHIBIT "E"
NON-DEFAULT CERTIFICATE
46
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
48
None.
JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT
KEYBANK NATIONAL ASSOCIATION as "Participant" under the terms
of that certain Amended and Restated Loan Agreement (the "Loan
Agreement") dated effective as of July 29, 1997, between and among First
Tennessee Bank National Association, CBL & Associates Limited Partnership
and Lakeshore/Sebring Limited Partnership, 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 July 29, 1997.
KEYBANK NATIONAL ASSOCIATION
/s/ ▇▇▇ ▇. ▇▇▇▇
By:________________________________
Vice President
Title:___________________________
49
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 July 29, 1997, between and among First Tennessee Bank
National Association, CBL & Associates Limited Partnership and
Lakeshore/Sebring Limited Partnership, 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 July 29, 1997.
COMPASS BANK
/s/ C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
By:________________________________
C. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
50
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 July 29, 1997, between and among First Tennessee Bank
National Association, CBL & Associates Limited Partnership and
Lakeshore/Sebring Limited Partnership, 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 July 29, 1997.
AMSOUTH BANK
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By:________________________________
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
51