_________________________________________________________
$85,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 26, 1996
By and Among
CBL & ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited Partnership, as Borrower,
and
WELLS FARGO BANK, N.A.
as successor in interest to
Wells Fargo Realty Advisors Funding, Incorporated,
NATIONSBANK, N.A. (SOUTH), successor by merger to
NationsBank of Georgia, N.A.,
FIRST BANK NATIONAL ASSOCIATION,
UNION BANK OF SWITZERLAND (NEW YORK BRANCH),
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT TO SECTION 9.6
as Lenders,
and
WELLS FARGO BANK, N.A.,
as successor in interest to
Wells Fargo Realty Advisors Funding, Incorporated,
as Agent
_______________________________________________________
TABLE OF CONTENTS
ARTICLE 1
DEFINITIONS
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . 2
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . 17
1.3 Accounting Terms, Calculation. . . . . . . . . . . . 17
1.4 Terminology. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 2.
THE LOAN
2.1 Commitment to Lend . . . . . . . . . . . . . . . . . 19
2.2 Letters of Credit. . . . . . . . . . . . . . . . . . 19
2.3 Method of Borrowing. . . . . . . . . . . . . . . . . 22
2.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Interest Rate. . . . . . . . . . . . . . . . . . . . 24
2.6 Special Provisions for LIBOR Advances. . . . . . . . 25
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . 27
2.8 Fees . . . . . . . . . . . . . . . . . . . . . . . . 30
2.9 Computation of Interest and Fees . . . . . . . . . . 31
2.10 Option to Replace Lenders. . . . . . . . . . . . . . 31
ARTICLE 3.
BORROWING BASE; ELIGIBLE PROJECTS
3.1 Borrowing Base . . . . . . . . . . . . . . . . . . . 34
3.2 Leases and Major Agreements. . . . . . . . . . . . . 38
3.3 Appraisals . . . . . . . . . . . . . . . . . . . . . 39
3.4 Major Construction . . . . . . . . . . . . . . . . . 40
ARTICLE 4.
CONDITIONS
4.1 Effectiveness. . . . . . . . . . . . . . . . . . . . 40
4.2 Advances . . . . . . . . . . . . . . . . . . . . . . 42
4.3 Conditions Precedent to a Project Becoming An
Eligible Project . . . . . . . . . . . . . . . . . . 43
5.1 Organization and Power . . . . . . . . . . . . . . . 46
5.2 Validity of Loan Instruments . . . . . . . . . . . . 46
5.3 Binding Effect . . . . . . . . . . . . . . . . . . . 47
5.4 Financial Information. . . . . . . . . . . . . . . . 47
5.5 Litigation . . . . . . . . . . . . . . . . . . . . . 47
5.6 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 48
5.7 Hazardous Substances . . . . . . . . . . . . . . . . 48
5.8 Taxes and Other Payments . . . . . . . . . . . . . . 49
5.9 Not an Investment Company. . . . . . . . . . . . . . 50
5.10 Information. . . . . . . . . . . . . . . . . . . . . 50
5.11 Insurance. . . . . . . . . . . . . . . . . . . . . . 50
5.12 Liens. . . . . . . . . . . . . . . . . . . . . . . . 50
5.13 Title to the Projects. . . . . . . . . . . . . . . . 51
5.14 Governmental Requirements. . . . . . . . . . . . . . 51
5.15 ERISA; Plan Assets . . . . . . . . . . . . . . . . . 51
ARTICLE 6.
COVENANTS
6.1 Reporting Requirements . . . . . . . . . . . . . . . 51
6.2 Payment and Performance. . . . . . . . . . . . . . 54
6.3 Maintenance of Property; Insurance . . . . . . . . . 54
6.4 Business; Existence. . . . . . . . . . . . . . . . . 55
6.5 Payment of Impositions . . . . . . . . . . . . . . . 55
6.6 Compliance with Legal Requirements . . . . . . . . . 55
6.7 Inspection of Property, Books and Records. . . . . . 56
6.8 Indebtedness . . . . . . . . . . . . . . . . . . . . 56
6.9 Consolidations, Mergers and Sales of Assets. . . . . 56
6.10 Use of Proceeds. . . . . . . . . . . . . . . . . . . 56
6.11 Investment Concentration . . . . . . . . . . . . . . 57
6.12 Total Obligations to Gross Asset Value . . . . . . . 58
6.13 Minimum Net Worth. . . . . . . . . . . . . . . . . . 58
6.14 Interest Coverage Ratio. . . . . . . . . . . . . . . 58
6.15 Debt Coverage Ratio. . . . . . . . . . . . . . . . . 58
6.16 ERISA. . . . . . . . . . . . . . . . . . . . . . . . 58
6.17 Liens. . . . . . . . . . . . . . . . . . . . . . . . 58
6.18 Restricted Payments. . . . . . . . . . . . . . . . . 59
ARTICLE 7.
DEFAULTS
7.1 Events of Default. . . . . . . . . . . . . . . . . . 59
7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . 63
7.3 Actions in Respect of the Letters of Credit Upon
Default. . . . . . . . . . . . . . . . . . . . . . . 63
7.4 Curing Defaults Under Collateral Documents . . . . . 63
7.5 Permitted Deficiency . . . . . . . . . . . . . . . . 64
ARTICLE 8.
THE AGENT
8.1 Appointment and Authorization. . . . . . . . . . . . 65
8.2 Agent and Affiliates . . . . . . . . . . . . . . . . 65
8.3 Action by Agent. . . . . . . . . . . . . . . . . . . 66
8.4 Consultation with Experts. . . . . . . . . . . . . . 66
8.5 Reliance by Agent. . . . . . . . . . . . . . . . . . 66
8.6 Defaults . . . . . . . . . . . . . . . . . . . . . . 67
8.7 Indemnification. . . . . . . . . . . . . . . . . . . 67
8.8 Credit Decision. . . . . . . . . . . . . . . . . . . 67
8.9 Failure to Act . . . . . . . . . . . . . . . . . . . 67
8.10 Resignation or Removal of Agent; Co-Agent. . . . . . 68
8.11 Consent and Approvals. . . . . . . . . . . . . . . . 69
8.12 Agency Provisions Relating to Collateral . . . . . . 71
8.13 Defaulting Lenders . . . . . . . . . . . . . . . . . 74
8.14 Borrower Not a Beneficiary . . . . . . . . . . . . . 76
ARTICLE 9.
MISCELLANEOUS
9.1 Notices. . . . . . . . . . . . . . . . . . . . . . . 76
9.2 No Waiver. . . . . . . . . . . . . . . . . . . . . . 77
9.3 Expenses; Documentary Taxes; Indemnification . . . . 77
9.4 Waiver of Set-Offs; Sharing of Set-Offs. . . . . . . 78
9.5 Amendments and Waivers . . . . . . . . . . . . . . . 79
9.6 Successors and Assigns . . . . . . . . . . . . . . . 80
9.7 Capital Adequacy . . . . . . . . . . . . . . . . . . 82
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . 83
9.9 Notice of Final Agreement. . . . . . . . . . . . . . 83
9.10 Invalid Provisions . . . . . . . . . . . . . . . . . 83
9.11 Maximum Rate . . . . . . . . . . . . . . . . . . . . 83
9.12 Limitation Upon Liability. . . . . . . . . . . . . . 84
9.15 Conflict of Terms. . . . . . . . . . . . . . . . . . 85
9.16 Governing Law; Submission to Jurisdiction. . . . . . 85
9.17 Waiver of Right to Trial by Jury . . . . . . . . . . 86
9.18 Amendment and Restatement. . . . . . . . . . . . . . 86
Schedule 3.1 List of Projects
Schedule 5.5 Litigation
Schedule 5.6 ERISA Plans
Schedule 5.11 Insurance
Exhibit A Notes
Exhibit B Notice of Borrowing
Exhibit C Rate Selection Notice
Exhibit D Form of Mortgage
Exhibit E Form of Environmental Indemnity Agreement
Exhibit F Form of Closing Certificate
Exhibit G Form of Guaranty
Exhibit H Form of Assignment
Exhibit I Form of Extension Request
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement")
is made and entered into as of this 26th day of September, 1996,
by and between CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware
limited partnership (hereinafter referred to as the "Borrower"),
WELLS FARGO BANK, N.A., a national banking association, as
successor in interest to Wells Fargo Realty Advisors Funding,
Incorporated, a Colorado corporation, NATIONSBANK, N.A. (SOUTH),
successor by merger to NationsBank of Georgia, N.A., a national
banking association, FIRST BANK NATIONAL ASSOCIATION, a national
banking association, and UNION BANK OF SWITZERLAND (NEW YORK
BRANCH) (hereinafter referred to individually as a "Lender" and
collectively as the "Lenders") and WELLS FARGO BANK, N.A., a
national banking association, as successor in interest to Wells
Fargo Realty Advisors Funding, Incorporated, a Colorado
corporation, as agent for the benefit of each of the Lenders (in
such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Borrower, Wells Fargo Realty Advisors Funding,
Incorporated, NationsBank of Georgia, N.A., and First Bank
National Association (collectively, the "Original Lenders") and
Agent entered into that certain Credit Agreement dated as of July
28, 1994 (the "Credit Agreement"), pursuant to which the Original
Lenders agreed to extend to Borrower a credit facility (the
"Credit Facility") in the aggregate principal amount of up to
Seventy-Five Million Dollars ($75,000,000.00) at any one time
outstanding; and
WHEREAS, Borrower, Original Lenders, Union Bank of
Switzerland (New York Branch) ("UBS") and Agent entered into that
certain First Amendment to Credit Agreement dated as of May 5,
1995 (the "First Amendment") to, among other matters, add UBS as
a "Lender" and increase the aggregate principal amount of the
Credit Facility to up to Eighty-Five Million Dollars
($85,000,000.00) at any one time outstanding; and
WHEREAS, Borrower, Lenders and Agent entered into that
certain Second Amendment to Credit Agreement dated as of July 5,
1995 (the "Second Amendment"); and
WHEREAS, Borrower, Lenders and Agent entered into that
certain Third Amendment to Credit Agreement dated as of May 23,
1996 (the "Third Amendment"); and
WHEREAS, Borrower, Lenders and Agent entered into that
certain Fourth Amendment to Credit Agreement dated as of July 26,
1996 (the "Fourth Amendment") (the Credit Agreement, the First
Amendment, the Second Amendment, the Third Amendment and the
Fourth Amendment being collectively referred to herein as the
"Original Credit Agreement"); and
WHEREAS, Borrower, Lenders and Agent desire to modify, amend
and restate the Original Credit Agreement in the manner and for
the purposes set forth herein.
NOW, THEREFORE, in consideration of the premises and the
mutual obligations and covenants hereinafter contained, the
parties hereto hereby agree as follows:
ARTICLE 1.
DEFINITIONS
SECTION 1.1 DEFINITIONS. When used herein, the following
terms shall have the following meanings:
"Adjusted Asset Value" means, as of a given date, (a) EBITDA
for Borrower's fiscal quarter most recently ended multiplied by
(b) 4 and divided by (c) the Capitalization Rate. For purposes
of determining Adjusted Asset Value, EBITDA shall be adjusted by
the Agent in its reasonable discretion to take into account
acquisitions and dispositions of property by Borrower and shall
exclude any EBITDA from property not owned by Borrower for the
entire fiscal quarter most recently ended or upon which
construction was in progress at the end of the fiscal quarter
most recently ended.
"Advance" shall have the eaning given such term in Section
2.1 hereof. An Advance may be either a LIBOR Advance or a Base
Rate Advance.
"Affiliate" shall mean, 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.
"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.
"Appraisal" means, in respect of any Project or proposed
Project, a M.A.I. appraisal commissioned by and addressed to
Agent (acceptable to Agent, in Agent's reasonable judgment, as to
form, substance and appraisal date), prepared by a professional
appraiser acceptable to Agent, in Agent's reasonable judgment,
having at least the minimum qualifications required under
applicable regulations governing Agent, including FIRREA, and
determining the "as is" market value of such Project or proposed
Project as between a willing buyer and a willing seller.
"Appraised Value" means, as to any Project or proposed
Project, the "as is" market value of such Project as reflected in
the then most recent Appraisal of such Project as the same may
have been adjusted by Agent based upon its internal review of
such Appraisal which is based on criteria and factors then
generally used and considered by Agent in determining the value
of similar projects, which review shall be conducted prior to
acceptance of such Appraisal by Agent and in any event within
thirty (30) days after receipt by Agent of such Appraisal. In
the event that an Appraisal of a Project is performed after the
occurrence of either (a) a casualty affecting such Project or
(b) a condemnation of a portion of such Project which results in
a loss of less than 10% of the acreage of the Project and of no
portion of the principal structures, but prior to complete
restoration of the same, the Appraised Value shall, to the extent
permitted by applicable regulations, be made on an "as-restored"
basis.
"Approved Percentage" means with respect to the Appraised
Value of any Project, a percentage not to exceed sixty five
percent (65%), as determined by Agent and disclosed to Borrower
prior to admission of such Project into the Borrowing Base. With
respect to the Appraised Value of the Property listed in Schedule
3.1 attached hereto, the Approved Percentage is sixty five
percent (65%).
"Base Rate" shall mean an interest rate per annum,
fluctuating daily, equal to the higher of (a) the rate announced
by Agent from time to time at its principal office in San
Francisco, California as its prime rate in effect on such day, or
(b) the Federal Funds Rate in effect on such day plus 0.5%. The
Base Rate is not necessarily intended to be the lowest rate of
interest charged by Agent or any Lender in connection with
extensions of credit. Each change in Base Rate shall result in a
corresponding change in the interest rate hereunder with respect
to a Base Rate Advance and such change shall be effective on the
effective date of such change in the Base Rate.
"Base Rate Advance" means any Advance hereunder with respect
to which the interest rate is calculated by reference to the Base
Rate.
"Borrowing Base" has the meaning set forth in Section 3.1(b)
hereof.
"Business Day" means any day on which all major departments
of Agent are open for business at its downtown headquarters in
San Francisco, California.
"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.
"Capitalization Rate" means nine and one-quarter percent
(9.25%).
"CBL Management, Inc." means CBL & Associates Management,
Inc., a Delaware corporation.
"CBL Properties, Inc." means CBL & Associates Properties,
Inc., a Delaware corporation, and a qualified public REIT and
sole general partner of Borrower.
"Collateral" means the real and personal property comprising
each Eligible Project securing payment of the Loan pursuant to
the Collateral Documents.
"Collateral Documents" means the Mortgages, assignments,
security agreements, financing statements, subordination,
attornment and non-disturbance agreements, tenant estoppel
letters, title insurance policies and other loan and collateral
documents creating, evidencing, perfecting insuring or relating
to the Liens and security interests in the Collateral.
"Combined" means, as to any calculation hereunder, that such
calculation shall be made on a combined basis for Borrower, 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 Properties, Inc., on a consolidated basis for CBL
Properties, Inc. and its Subsidiaries, and (c) in respect of CBL
Management, Inc., on a consolidated basis for CBL Management,
Inc. and its Subsidiaries.
"Commitment" means, in respect of each Lender, the
obligation of such Lender to make Advances to Borrower, subject
to the terms and conditions hereof, up to an aggregate principal
amount not to exceed at any one time outstanding the amount set
forth opposite such Lender's name on the signature pages hereto
or as set forth in any amendment to this Agreement, subject to
adjustment, in the case of any Lender, from time to time by
assignment pursuant to Section 9.6 hereof or decrease by Borrower
pursuant to Section 2.1 hereof, and "Commitments" shall mean the
Commitment of all the Lenders in an aggregate principal amount
not to exceed at any one time outstanding Eighty-Five Million
Dollars ($85,000,000).
"Consequential Loss" means, for any Lender with respect to
(a) Borrower's payment of all or any portion of the then-outstanding
principal amount of a LIBOR Advance on a day other than the last
day of the Interest Period applicable thereto or (b) any of the
circumstances specified in Section 2.3(c) upon which a Consequential
Loss may be incurred, any loss, cost or expense incurred by such
Lender as a result of the timing of such payment or Advance or in
the redepositing, redeploying or reinvesting the principal amount
so paid or affected by the timing of such Advance or the circumstances
described in Section 2.3(c) including the sum of (i) the interest
which, but for the payment or timing of the Advance, such Lender
would have earned in respect of such principal amount, reduced, if
such Lender is able to redeposit, redeploy, or reinvest such principal
amount by the interest earned by such Lender as a result of so
redepositing, redeploying or reinvesting such principal amount,
plus (ii) any expense or penalty incurred by such Lender on
redepositing, redeploying or reinvesting such principal amount.
"Contingent Obligations" means, for any Person, any material
commitment, undertaking, Guarantee or other material obligation
constituting a contingent liability under GAAP, but only to the
extent the same are required to be reflected on such Person's
audited financial statements.
"Conversion Date" has the meaning set forth in Section
2.3(c) hereof.
"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 Term Loan Conversion Date,
the scheduled principal payments on the Term Loan and (y) any
regularly scheduled principal payment payable on any Indebtedness
which repays 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 causing the amount of the
prepayment to become due and payable on the date set for such
notice for such prepayment.
"Default" means any condition or event which, with the
giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"Defaulting Lender" means any Lender which fails or refuses
to perform its obligations under this Agreement within the time
period specified for performance of such obligation or, if no
time frame is specified, if such failure or refusal continues for
a period of five (5) days after notice from Agent.
"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 (federal and state) 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" means the date this Agreement becomes
effective in accordance with Section 4.1 hereof.
"Eligible Project" means a Project which the Agent and the
Lenders have agreed, in their reasonable discretion, to include
in the Borrowing Base.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
0ordinances, rules, judgments, orders, decrees, plans,
injunctions, permits, concession, grants, franchises, licenses,
agreements and other governmental restrictions relating to the
environment, the effect of the environment on human health or to
emissions, discharges or releases of pollutants, contaminants,
Hazardous Substances or wastes into the environment including,
without limitation, ambient air, surface water, ground water, or
land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, Hazardous Substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules and regulations
from time to time promulgated thereunder.
"ERISA Affiliate" means each trade or business (whether or
not incorporated) which, together with Borrower, is treated as a
single employer under Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code.
"ERISA Plan" means any employee benefit plan subject to
Title I of ERISA.
"Event of Default" has the meaning set forth in Section 7.1
hereof.
"Federal Funds Rate" means, on any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%)
equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such
rate on such transactions on the next preceding Business Day as
so published on the next succeeding Business Day, and (ii) if no
such rate is published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted
to Agent on such day of such transactions as determined by Agent.
"FIRREA" means the Financial Institution Recovery, Reform
and Enforcement Act of 1989, as amended from time to time.
"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, excluding gain (loss) from debt restructuring and sale of
p0roperties, plus (b) depreciation and amortization of real estate
assets, plus (minus) (c) to the extent not included in clause (a)
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, in accordance
with the last sentence of Section 1.3(a) hereof, are to be used
in making the calculations for purposes of determining compliance
with this Agreement.
"Governmental Authority" means, in respect any Person, any
government (or any political subdivision or jurisdiction thereof)
, court, bureau, agency or other governmental authority having
jurisdiction over such Person or any Affiliate of such Person or
any of its or their business, operations or properties.
"Gross Asset Value" means, at a given time, the sum of (a)
Adjusted Asset Value at such time, plus (b) all of Borrower's
cash and cash equivalents at the end of the fiscal quarter most
recently ended, plus (c) the current book value of all real
property of Borrower upon which construction was in progress at
the end of the fiscal quarter most recently ended, plus (d) the
purchase price paid by Borrower for any real property purchased
by Borrower during the fiscal quarter most recently ended.
"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 loss 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 any pollutant,
contaminant, hazardous, toxic or dangerous waste, substance or
material, or any other substance or material regulated or
controlled pursuant to any Environmental Law, including, without
limiting the generality of the foregoing, asbestos, PCBs,
petroleum products (including crude oil, natural gas, natural gas
liquids, liquified natural gas or synthetic gas) or any other
substance defined as a "hazardous substance," "extremely
hazardous waste," "restricted hazardous waste," "hazardous
material," "hazardous chemical," "hazardous waste," "regulated
substance," "toxic chemical," "toxic substance" or other similar
term in any Environmental Law.
"Impositions" shall mean (i) all real estate and personal
property taxes, charges, assessments, excises and levies and any
interest, costs or penalties with respect thereto, general and
sp0ecial, ordinary and extraordinary, foreseen and unforeseen, of
any kind and nature whatsoever, which at any time prior to or
after the execution hereof may be assessed, levied or imposed
upon the Collateral or the ownership, use, occupancy or enjoyment
thereof, or any portion thereof, or the sidewalks, streets or
alleyways adjacent thereto; (ii) any charges, fees, license
payments or other sums payable for any easement, license or
agreement maintained for the benefit of the Collateral; and (iii)
water, gas, sewer, electricity, telephone and other utility
charges and fees that are or may become a Lien against the
Collateral.
"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
oth0er 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 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 arising in
the ordinary course of business; or (vi) as a lessee arising
under a lease that is 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).
"Indemnitee" has the meaning set forth in Section 9.3(c)
hereof.
0
"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)
ll 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, of any other
Person for which such Person is wholly or partially liable
(whether by Guarantee, pursuant to Applicable Law or otherwise)
b0ut excluding (i) interest on Reserved Construction Loan and (ii)
swap or other interest hedging breakage costs, all as determined
in conformity with GAAP and (iii) all Interest to a Project.
"Interest Period" means, with respect to a LIBOR Advance, a
period commencing:
(c) on the borrowing date of such LIBOR Advance made
pursuant to Section 2.3(a) of this Agreement; or
(d) on the Conversion Date pertaining to such LIBOR
Advance, if such LIBOR Advance is made pursuant to
a conversion as described in Section 2.3(c)
hereof; or
(e) on the last day of the preceding Interest Period
0 in the case of a rollover to a successive Interest
Period;
and ending 1, 2, 3, 6 or 12 months thereafter, as Borrower shall
elect in accordance with Section 2.3(c) of this Agreement;
provided, that:
(i) any Interest Period that would
otherwise end on a day which is not a LIBOR
Business Day shall be extended to the next
succeeding LIBOR Business Day, unless such LIBOR
Business Day falls in another calendar month in
which case such Interest Period shall end on the
next preceding LIBOR Business Day;
(ii) any Interest Period that begins on the
0 last LIBOR Business Day of a calendar month (or on
a day for which there is no numerically
corresponding day in the calendar month or at the
end of such Interest Period) shall, subject to
Clause (i) above, end on the last LIBOR Business
Day of a calendar month;
(iii) if the Interest Period for any LIBOR
Advance would otherwise end after the final
maturity date of the Loan, then such Interest
Period shall end on the final maturity date of the
Loan; and
(iv) if Borrower elects an Interest Period of 12
months with respect to any LIBOR Advance, and any
Lender determines that either deposits in United States
Dollars (in the applicable amounts) are not being
offered to it in the interbank eurodollar market for
such Interest Period or that quotes of the LIBOR Rate
are not available for such Interest Period, then Agent
shall give notice thereof to Borrower, and Borrower
shall be deemed to have elected an Interest Period of 6
months.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"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.
"Issuing Bank" means Agent or an affiliate of Agent, as the
issuer of Letters of Credit hereunder.
"Lease" means any lease, sublease, license, concession or
other agreement (written or verbal, now or hereafter in effect)
to which Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership is a party and which grant a possessory interest
in and to, or the right to use, all or any part of an Eligible
Project, save and except any lease or sublease pursuant to which
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership is granted a possessory interest in the land
underlying such Eligible Project.
"Legal Requirements" shall mean (i) any and all present and
future judicial decisions, statutes, rulings, rules, regulations,
permits, certificates or ordinances of any Governmental Authority
in any way applicable to Borrower, any Wholly Owned Subsidiary of
Borrower or any Subpartnership owning an Eligible Project, or the
Collateral, including, without limiting the generality of the
foregoing, the ownership, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction thereof;
(ii) any and all covenants, conditions and restrictions contained
in any deed or other form of conveyance or in any other
instrument of any nature that relate in any way or are applicable
to the Collateral or the ownership, use or occupancy thereof;
(iii) Borrower's and each such Wholly Owned Subsidiary's and
Subpartnership's presently or subsequently effective Articles of
Partnership, Limited Partnership, Joint Venture, Trust or other
form of business association agreement; (iv) any Major Agreements
and Major Leases; and (v) any lease or other contract pursuant to
which Borrower is granted a possessory interest in any land.
"Lending Office" means Agent's office located 420 Montgomery
Street, 6th Floor, San Francisco, California 94163, or such other
office as Agent may hereafter designate as its Lending Office by
notice to Borrower and Lenders.
"Letter of Credit Obligations" means, collectively, (a) all
reimbursement and other obligations of Borrower in respect of
Letters of Credit, (b) all amounts paid by Agent to the Issuing
Bank in respect of Letters of Credit and (c) all amount paid by
the Lenders to the Agent and/or the Issuing Bank in respect of
Letters of Credit.
"Letters of Credit" means the letters of credit made in
connection with the Loan issued by the Issuing Bank for the
account of Borrower in an aggregate face amount not to exceed
$10,000,000.00 outstanding at any one time, as they may be drawn
on, advanced, replaced, or modified from time to time.
"LIBOR Advance" means any Advance hereunder with respect to
which the interest rate is calculated by reference to the LIBOR
Rate for a particular Interest Period.
"LIBOR Business Day" means a Business Day on which dealings
in United States Dollars are carried out in the London interbank
market.
"LIBOR Rate" means, with respect to any Interest Period, the
rate per annum which is equal to the quotient of the average rate
per annum (determined solely by the Agent and rounded upwards, if
necessary, to the next higher 1/16 of 1%) at which deposits in
United States Dollars are offered to Wells Fargo Bank by brokers
in the London interbank market as of 11:00 a.m. (London time) two
(2) LIBOR Business Days prior to the first day of such Interest
Period, in an amount equal to LIBOR Advance so requested and for
a period equal to such Interest Period. Each determination of
the LIBOR Rate by Agent shall, in absence of manifest error, be
conclusive and binding.
"LIBOR Reserve Requirement" means the daily average during
the Interest Period of the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves
and taking into account any transitional adjustments or other
schedule changes in reserve requirements during the Interest
Period) which is imposed under Regulation D against "Eurocurrency
liabilities" as defined in Regulation D. Each determination by
Agent of the LIBOR Reserve Requirement shall, in the absence of
manifest error, be conclusive and binding.
"Lien" means any deed to secure debt, mortgage, deed of
trust or similar security instruments (including any Mortgage),
pledge, hypothecation, assignment, deposit arrangement, lien,
charge, claim, security interest, easement or encumbrance, or
preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without
limitation, any title retention agreement, any financing lease
having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing
statement perfecting a security interest under the Uniform
Commercial Code or comparable law of any jurisdiction).
"Loan" means the aggregate principal amount of outstanding
Advances made by Lenders pursuant to Article 2 hereof. From and
after the Term Loan Conversion Date, the term "Loan" shall mean
and refer to the Term Loan.
"Loan Documents" means this Agreement, the Notes and the
Collateral Documents.
"Major Agreements" means, at any time, (a) each operating,
cross-easement, restrictions or similar agreement encumbering or
affecting an Eligible Project and any adjoining property material
to the use and operation of such Project; (b) each management
agreement with respect to an Eligible Project; and (c) any other
agreement, such as engineers' contracts, utility contracts,
maintenance agreements and service contracts, which in any way
relates to the use, occupancy, operation, maintenance, enjoyment
or ownership of an Eligible Project, the breach or loss of which
would have a material adverse effect on such Project.
"Major Lease", with respect to any Eligible Project, shall
mean any lease of 50,000 or more leasable square feet, in the
case of any Project which is a regional mall or 20,000 or more
leasable square feet, in the case of any Project which is a strip
center, or (ii) collectively, the leases of space in the Projects
by one or more tenants which are affiliates or operate under
separate leases of space within the Projects if the aggregate
leasable square footage leased by such affiliates is 50,000 or
more leasable square feet, in the case of any Project which is a
regional mall or 20,000 or more leasable square feet, in the case
of any Project which is a strip center.
"Majority Lenders" shall mean, at any time, Lenders holding
at least sixty-six and two-thirds percent (66 %) of the aggregate
principal amount of the Commitment or, if the Commitment has been
terminated, Lenders holding at least sixty-six and two-thirds
percent (66 %) of the aggregate outstanding principal amount of
the Loan; provided however, in determining such percentage at any
given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares of Lenders shall
be redetermined, for voting purposes only, to exclude the Pro
Rata Shares of such Defaulting Lenders.
"Maximum Rate" means the highest nonusurious rate of
interest (if any) permitted from day to day by applicable law.
"Mortgage" shall mean a mortgage, deed of trust, deed to
secure debt or similar security instrument made or to be made by
a Person owning real estate or an interest in real estate
granting a Lien on such real estate or interest in real estate as
security for the payment of Indebtedness.
"Net 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 Project for the period
in question, but without duplication (a) any cash rentals,
proceeds, expense reimbursements or income earned by such Project
(but excluding security or other deposits, late fees, early lease
termination or other penalties, and other charges deemed by Agent
to be of a non-recurring nature and excluding rent dedicated to
the repayment of Indebtedness secured by a Lien permitted by
Section 6.17(b) hereof) during such period; less (b) all cash
costs and expenses that Borrower incurred during such period, as
a result of, or in connection with, the development, operation,
or leasing of such Project (but excluding principal and interest
payments during such period); plus (less) (c) gains (losses) from
the sale of outparcels made in the ordinary course of business;
less (d) to the extent exceeding the amounts for the applicable
costs and expenses incurred by Borrower pursuant (e) above,
appropriate accruals for items such as taxes, insurance, or other
expenses reasonably determined by Agent, in each case determined
in accordance with GAAP.
"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) cumulative
depreciation and amortization after June 30, 1996, minus (d) all
intangible assets, determined on a Combined basis in accordance
with GAAP.
"Non-ERISA Plan" means any Plan subject to Section 4975 of
the Internal Revenue Code.
"Non Pro Rata Advance" means an Advance with respect to
which less than all Lenders have funded their respective Pro Rata
Shares of such Advance and the failure of the non-funding Lender
or Lenders to fund its or their respective Pro Rata Shares of
such Advance constitutes a breach of this Agreement. For
purposes of this definition, the Pro Rate Shares of the Lenders
will be calculated without regard to the proviso contained in the
definition of "Pro Rata Share".
"Notes" means the amended and restated promissory notes
executed by Borrower, substantially in the form of Exhibit A
hereto, payable to each of the Lenders in an amount equal to such
Lender's Commitment, as the same may be amended, supplemented,
modified, or restated from time to time, evidencing the
obligation of Borrower to repay the Loan, and all renewals,
modifications and extensions thereof, and "Note" means any one of
the Notes.
"Notice of Borrowing" means a notice substantially in the
form of Exhibit B attached hereto.
"Obligations" means the Loan, the Letter of Credit
Obligations and any and all other Indebtedness, liabilities and
obligations of Borrower to the Lenders, or any of them, or to any
Indemnitee, of every kind and nature (including, without
limitation, interest charges, expenses, attorneys' fees and other
sums chargeable to Borrower by Lenders and future advances made
to or for the benefit of Borrower), arising under this Agreement
or under any of the other Loan Documents, whether direct or
indirect, absolute or contingent, primary or secondary, due or to
become due, now existing or hereafter acquired.
"Permanent Loan Estimate" means, as of any date and with
respect to any Project included in the Borrowing Base, an amount
equal to the quotient of (a) an amount equal to the aggregate Net
Operating Income of such Project for the immediately preceding
twelve (12) month period divided by (b) the product of (i) 1.25
and (ii) the percent of a principal amount of a loan required to
be paid each year in order to repay the principal amount of such
loan in full based on a twenty-five (25) year amortization, and
to pay the amount of interest due at each installment, utilizing
a rate of interest equal to 1.5% in excess of the average of the
rates published during the four fiscal quarters ending on or most
recently prior to such date in the United States Federal Reserve
Statistical Release (H.15) for 10-year Treasury Constant
Maturities, in equal monthly installments of principal and
interest.
"Permitted Liens" means (i) pledges or deposits made to
secure payment of worker's compensation (or to participate in any
fund in connection with worker's compensation insurance),
unemployment insurance, pensions or social security programs,
(ii) encumbrances consisting of zoning restrictions, easements,
or other restrictions on the use of real property, provided that
such items do not materially impair the use of such property for
the purposes intended and none of which is violated in any
material respect by existing or proposed structures or land use,
(iii) the following to the extent no Lien has been filed in any
applicable jurisdiction or agreed to: (A) Liens for taxes not yet
due and payable; and (B) Liens imposed by mandatory provisions of
law such as for materialmen's, mechanic's, warehousemen's and
other like Liens arising in the ordinary course of business,
securing payment of Indebtedness whose payment is not yet due,
(iv) Liens for taxes, assessments and governmental charges or
assessments that are being contested in good faith by appropriate
proceedings diligently conducted, and for which reserves or other
adequate security acceptable to Agent have been provided, (v) to
the extent expressly approved in writing by Agent, Liens on
Projects where Borrower and Agent are insured against such Liens
by title insurance acceptable to the Lenders, (vi) Liens securing
assessments or charges payable to a property owner association or
similar entity, which assessments are not yet due and payable, or
(vii) other Liens expressly permitted by the terms of the
Mortgages granted by Borrower or its Affiliates in favor of the
Agent.
"Person" means an individual, a corporation, a partnership,
a limited liability company, an association, a trust or any other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan
which is covered by Title IV of ERISA or subject to the minimum
funding standards under Section 412 of the Internal Revenue Code.
"Projects" 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.
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (a) such Lender's Commitment by
(b) the aggregate Commitments of all Lenders, or, if the
Commitments shall have been terminated, the percentage obtained
by dividing (x) the aggregate unpaid principal amount of such
Lender's Note or Notes by (y) the aggregate unpaid principal
amount of all Lenders' Notes; provided however, in determining
such percentage at any given time, all then existing Defaulting
Lenders will be disregarded and excluded and the Pro Rata Shares
of Lenders shall be redetermined to exclude the Pro Rata Shares
of such Defaulting Lenders.
"Protective Advance" means all sums expended as determined
by Agent to be necessary to: (a) protect the priority, validity
and enforceability of the Liens on, and security interests in,
any Collateral and the instruments evidencing or securing the
Obligations, or (b) (i) prevent the value of any Collateral from
being materially diminished (assuming the lack of such a payment
within the necessary time frame could potentially cause such
Collateral to lose value), or (ii) protect any of the Collateral
from being materially damaged, impaired, mismanaged or taken,
including, without limitation, any amounts expended in accordance
with Section 9.3 or post-foreclosure ownership, maintenance,
operation or marketing of any Eligible Project.
"Rate Selection Notice" has the meaning set forth in Section
2.3(c) hereof. Each Rate Selection Notice shall be substantially
in the form of Exhibit C attached hereto.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in
effect and shall include any successor or other regulation
relating to reserve requirements applicable to member banks of
the Federal Reserve System.
"REIT" means a real estate investment trust qualified under
the Internal Revenue Code.
"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
6.1(f) thereof.
"Senior Officer" shall mean, with respect to Borrower or CBL
Properties, Inc., the President, any Senior Executive Vice
President, Executive Vice President or Senior Vice President of
CBL Properties, Inc.
"Significant Subsidiary" shall mean any Subsidiary which
either (a) owns any of the Collateral or (b) has assets having an
aggregate book value in excess of $500,000.
"Subpartnership" means any partnership in which Borrower is
the sole general partner or managing general partner, and in
which CBL Properties, Inc. is the sole limited partner or sole
other general partner. For purposes of clarity, each
Subpartnership is a Subsidiary of Borrower.
"Subsidiary" shall mean, as to any Person, any other Person,
more than fifty percent (50%) of the outstanding shares of
Capital Stock, 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.
"Supermajority Lenders" shall mean, at any time, Lenders
holding at least eighty-five percent (85%) of the aggregate
principal amount of the Commitment or, if the Commitment has been
terminated, Lenders holding at least eighty-five percent (85%) of
the aggregate outstanding principal amount of the Loan; provided
however, in determining such percentage at any given time, all
then existing Defaulting Lenders will be disregarded and excluded
and the Pro Rata Shares of Lenders shall be redetermined, for
voting purposes only, to exclude the Pro Rata Shares of such
Defaulting Lenders.
"Term Loan" has the meaning set forth in Section 2.12
hereof.
"Term Loan Conversion Date" has the meaning set forth in
Section 2.12 hereof.
"Term Loan Termination Date" means the date which is three
(3) years after the Term Loan Conversion Date.
"Termination Date" means the earlier to occur of (a)
September 26, 1999, or such later date to which the Termination
Date may be extended by the written agreement of the Borrower,
the Agent and all the Lenders pursuant to Section 2.11 hereof,
(b) the date Lenders' Commitment to fund Advances are terminated
pursuant to Section 7.2 hereof or (c) the date that Lender's
Commitments are reduced to zero by Borrower pursuant to Section
2.1 hereof.
"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.
"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.
"Unused Facility Fee" has the meaning set forth in Section
2.8(a) hereof.
1.2 USE OF DEFINED TERMS. All terms defined in this
Agreement and the Exhibits hereto shall have the same defined
meanings when used in any other Loan Document, unless the context
shall require otherwise.
1.3 ACCOUNTING TERMS, CALCULATION. (A) Except as
otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be
delivered to the Lenders hereunder shall (unless otherwise
disclosed to the Lenders in writing at the time of delivery
thereof in the manner described in subsection (b) below) be
prepared, in accordance with generally accepted accounting
principles applied on a basis consistent with those used in the
preparation of the latest financial statements furnished to the
Lenders hereunder (which, prior to the delivery of the first
financial statements under Section 6.1 hereof, shall mean the
certified financial statements as at June 30, 1996 referred to in
Section 5.4 hereof). All calculations made for the purposes of
determining compliance with this Agreement shall (except as
otherwise expressly provided herein) be made by application of
generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the annual or
quarterly financial statements furnished to the Lenders pursuant
to Section 6.1 hereof most recently prior to or concurrently with
such calculations (or, prior to the delivery of the first
financial statements under Section 6.1 hereof, used in the
preparation of the certified financial statements as at June 30,
1996 referred to in Section 5.4 hereof) unless (I) either (x)
Borrower shall have objected to determining such compliance on
such basis at the time of delivery of such financial statements
or (y) the Majority Lenders shall so object in writing within 30
days after delivery of such financial statements and (ii)
Borrower and the Majority Lenders have not agreed upon amendments
to the provisions of this Agreement to reflect any change in such
basis, in which event such calculations shall be made on a basis
consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have
been made (which, if objection is made in respect of the first
financial statements delivered under Section 6.1 hereof, shall
mean the financial statements referred to in Section 5.4 hereof).
(b) Borrower shall deliver to the Lenders at the same
time as the delivery of any annual or quarterly financial
statement under Section 6.1 hereof (I) a description in
reasonable detail of any material variation between the
application of accounting principles employed in the preparation
of such statement and the application of accounting principles
employed in the preparation of the next preceding annual or
quarterly financial statements as to which no objection has been
made in accordance with the last sentence of subsection (a) above
and (ii) reasonable estimates of the difference between such
statements arising as a consequence thereof.
(c) To enable the ready and consistent determination
of compliance with the covenants set forth in Article 6 hereof,
Borrower will not change the last day of its fiscal year from
December 31 of each year, or the last days of the first three
fiscal quarters in each of its fiscal years from March 31, June
30 and September 30 of each year, respectively, without the prior
written approval of the Majority Lenders.
1.4 TERMINOLOGY. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter
gender, shall include all other genders; the singular shall
include the plural, and the plural shall include the singular.
Titles of Sections in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this Agreement,
and all references in this Agreement to Sections, Subsections,
paragraphs, clauses, subclauses, Exhibits or Schedules shall
refer to the corresponding Section, Subsection, paragraph,
clause, subclause of, Exhibit or Schedule attached to, this
Agreement, unless specific reference is made to the articles,
sections or other subdivisions of, Exhibits or Schedules to,
another document or instrument. All Exhibits and Schedules
attached hereto are by reference made a part hereof. All
references to any instrument, document or agreement shall, unless
the context otherwise requires, refer to such instrument,
document or agreement as the same may be, from time to time,
amended, modified, supplemented, renewed, extended, replaced or
restated. In the event that the Section references contained in
any Mortgage granted to the Agent on an Eligible Project (a
"Project Mortgage") vary from the Section references set forth in
the form of Mortgage attached hereto as Exhibit D (the "Form
Mortgage"), any reference contained in this Agreement to a
specific section of a Mortgage shall, when applied to such
Project Mortgage, be deemed to refer to the section in the
Project Mortgage which most closely corresponds to the text of
specified section in the Form Mortgage.
ARTICLE 1
THE LOAN
SECTION 2.1 COMMITMENT TO LEND. Subject to the terms and
conditions set forth in this Agreement, so long as there exists
no (i) Default under Sections 7.1(a), 7.1(g) or 7.1(h) hereof,
(ii) other Default as to which Agent has given Borrower notice or
(iii) Event of Default, each Lender severally agrees to make
loans (each an "Advance" and collectively the "Advances") to
Borrower from time to time on any Business Day or LIBOR Business
Day, as appropriate, during the period from and including the
Effective Date to, but not including, the Term Loan Conversion
Date (in the event the Loan is converted into the Term Loan) or
the Termination Date (in the event the Loan is not converted into
the Term Loan) in a principal amount not to exceed the lesser of
(a) such Lender's Commitment less such Lender's Pro Rata Share of
the aggregate face amount of outstanding Letters of Credit or (b)
such Lender's Pro Rata Share of the amount equal to (i) the
Borrowing Base less (ii) the aggregate face amount of the
outstanding Letters of Credit. Advances hereunder made at any
one time shall be in an aggregate principal amount of not less
than $200,000.00 or any larger multiple of $25,000.00 (except
that any Base Rate Advance may be in the aggregate amount of the
unused Commitments). Within the foregoing limits, Borrower may
borrow under this Section 2.1, prepay the Advances as provided in
this Agreement, and reborrow at any time prior to the Term Loan
Conversion Date (in the event the Loan is converted into the Term
Loan) or the Termination Date (in the event the Loan is not
converted into the Term Loan) under this Section 2.1. Borrower
shall have the right, upon (3) Business Days' prior written
notice to Agent, to permanently reduce the unutilized portion of
the Commitments; provided that any portion of the reduction shall
be in the minimum amount of $1,000,000.00 or in any integral
multiple thereof.
SECTION 2.2 LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time through the day that
is the earlier to occur of the Term Loan Conversion Date or
thirty (30) days prior to the Termination Date, the Agent shall
cause the Issuing Bank to issue such Letters of Credit for the
account of Borrower as the Borrower may request by a request for
Letter of Credit; provided that (i) upon issuance of such Letters
of Credit, the sum of the aggregate principal amount of all
outstanding Advances plus the aggregate face amount of all
outstanding Letters of Credit shall not exceed the lesser of (A)
the Borrowing Base or (B) then applicable aggregate amount of the
Commitments; (ii) the aggregate face amount of all outstanding
Letters of Credit (including without limitation the requested
Letter of Credit) shall not exceed Ten Million Dollars
($10,000,000); and (iii) unless all the Lenders otherwise consent
in writing, the term of any Letter of Credit shall not extend
beyond the Termination Date and no Letter of Credit shall contain
an automatic extension or renewal clause.
(b) Borrower shall deliver to the Agent a duly executed
request for Letter of Credit not later than 9:00 A.M., Pacific
Time, at least five (5) Business Days prior to the date upon
which the requested Letter of Credit is to be issued. The
Borrower shall further deliver to the Agent and the Issuing Bank
such additional instruments and documents as the Agent and/or the
Issuing Bank may require, in conformity with the then standard
practices of its letter of credit department, in connection with
the issuance of such Letter of Credit.
(c) The Agent shall, if it approves of the content of the
request for Letter of Credit (which approval shall not be
unreasonably withheld) give prompt written notice to the Lenders
upon the approval of the request, and subject to the conditions
set forth in this Agreement, cause the issuance of the Letter of
Credit on or before 5:00 p.m. Pacific Time, on or before the day
five (5) Business Days following receipt of the documents last
due pursuant to Section 2.2(b). Upon issuance of a Letter of
Credit, the Agent shall promptly notify the Lenders of the amount
and terms thereof. The Agent shall provide copies of each Letter
of Credit to the Lenders promptly following issuance thereof and
shall notify the Lenders promptly of all payments,
reimbursements, expirations, negotiations, transfers and other
activity with respect to outstanding Letters of Credit.
(d) Upon the issuance of a Letter of Credit, each Lender
shall be deemed to have purchased a pro rata issuer participation
therein from the Issuing Bank in an amount equal to the Lender's
Pro Rata Share of the face amount of the Letter of Credit.
(e) If and to the extent that any amounts are drawn upon
any Letters of Credit the amount so drawn shall immediately be
paid by Agent to the Issuing Bank, and, from the date of payment
thereof by the Issuing Bank, shall be considered (i) so long as
there exists no Default or Event of Default, an Advance of the
Agent for all purposes hereunder and (ii) if there then exists a
Default or Event of Default, a purchase by the Agent of the
Issuing Bank's right to reimbursement in respect of such Letter
of Credit.
(f) Promptly after payment by the Issuing Bank of any
amount drawn upon any Letter of Credit, the Agent shall, without
notice to or the consent of the Borrower, direct the Lenders to
advance to the Agent, their Pro Rata Share of the amount so
drawn. The proceeds of such advances shall be applied by the
Agent to reimburse it for the payment made by it to the Issuing
Bank under the Letter of Credit. All amounts paid by the Lenders
pursuant to this Section 2.2(f) shall be deemed to be (i) so long
as there exists no Default or Event of Default, Base Rate
Advances made pursuant to this Agreement and (ii) if there then
exists a Default or Event of Default, a purchase by each Lender
of a participation in the Letter of Credit Obligations in respect
of such Letter of Credit.
(g) On the occurrence of (i) the Termination Date (in the
event the Loan is not converted into the Term Loan), or (ii) the
Term Loan Termination Date (in the event the Loan is converted
into the Term Loan), prior to the expiration of all Letters of
Credit, the Borrower shall provide to the Agent a standby letter
of credit issued by a bank satisfactory to the Agent, in form and
substance satisfactory to the Agent, in favor of the Agent in a
face amount equal to outstanding Letters of Credit on that date,
or shall make other provisions satisfactory to the Agent for the
full collateralization, by cash or cash equivalent, of such
outstanding Letter of Credit. In the event of failure of the
Borrower to comply with the requirement of this Section 2.2(g),
such portion of the face amount of all outstanding Letters of
Credit as to which the Borrower has failed to comply shall be
deemed to be immediately due and payable.
(h) The issuance of any supplement, modification,
amendment, renewal, or extension to or of any Letter of Credit
shall be treated in all respects the same as issuance of a new
Letter of Credit.
(i) Borrower assumes all risks of the acts or omissions of
any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit. Neither the Issuing
Bank, the Agent, any Lender nor any of their respective officers
or directors shall be liable or responsible for, nor shall
Borrower's obligations hereunder in respect of such Letters of
Credit be impaired as a result of:
(i) any lack of validity or enforceability of any
Letter of Credit or any other agreement or instrument
relating thereto (such Letter of Credit and any other
agreement or instrument relating thereto being,
collectively, the "Letter of Credit Documents");
(i) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in
connection therewith;
(ii) any statement or any other document presented
under a Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time
against any beneficiary or any transferee of a Letter of
Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), the Issuing Bank or any
other Person, whether in connection with the transactions
contemplated by the Letter of Credit Documents or any
unrelated transaction;
(iv) payment by the Issuing Bank against presentation
of documents that do not comply with the terms of a Letter
of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or
(v) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit.
In furtherance and not in limitation of the foregoing, the
Issuing Bank may accept documents that appear on their face to be
in order, without responsibility for further investigation,
regardless of any notice or information to the contrary
SECTION 2.3 Method of Borrowing.
(a) Application for Advance. Borrower shall deliver to
Agent a Notice of Borrowing not later than 10:00 A.M. (Pacific
Standard Time or Pacific Daylight Time, as applicable) at least
one (1) Business Day prior to the date such Advance is to be
made, in the case of a Base Rate Advance, and at least three (3)
LIBOR Business Days prior to the date such Advance is to be made,
in the case of a LIBOR Advance. Prior to delivering a Notice of
Borrowing, Borrower may (without specifying whether the Advance
shall be a Base Rate Advance or a LIBOR Advance) request that
Agent provide Borrower with the most recent LIBOR Rate available
to Agent. Agent shall endeavor to provide such quoted rate to
Borrower and to Lenders on the date of such request.
(b) Funding.
(i) Promptly after receipt of a Notice of Borrowing
under Section 2.3(a), Agent shall send a copy thereof to
each Lender by telex or telecopy, or other similar form of
transmission. Each Lender shall deposit an amount equal to
its Pro Rata Share of the Advance requested by Borrower with
Agent at its Lending Office, in immediately available funds
not later than 10:00 A.M. (Pacific Standard Time or Pacific
Daylight Time, as applicable) on the date such Advance is to
be made. Upon fulfillment of all applicable conditions set
forth herein, Agent shall make available to Borrower at
Agent's Lending Office, not later than 2:00 P.M. (Pacific
Standard Time or Pacific Daylight Time, as the case may be)
on the date of each Advance, the proceeds of such amounts
received by Agent. The failure of any Lender to deposit the
amount described above with Agent shall not relieve any
other Lender of its obligations hereunder to make its Pro
Rata Share of the Advance.
(ii) Unless Agent shall have been notified by any
Lender that such Lender will not make available to Agent
such Lender's Pro Rata Share of a proposed Advance, Agent
may in its discretion assume that such Lender has made such
Advance available to Agent in accordance with this Section
2.3(b) and Agent may, if it chooses, in reliance upon such
assumption, make such Advance available to Borrower. If and
to the extent such Lender shall not so make its Pro Rata
Share of the proposed Advance available to Agent, such
Lender and Borrower severally agree to pay or repay to Agent
within two (2) days after demand the amount of such Advance
together with interest thereon, for each day from the date
such Advance is made available to Borrower until the date
such amount is paid or repaid to Agent at (A) in the case of
Borrower, the interest rate applicable at the time to other
Lenders' Advances made on the date of such Advance, (B) in
the case of such Lender, the Federal Funds Rate. If such
Lender shall pay to Agent such amount, such amounts so
repaid shall constitute such Lender's Advance for purposes
of this Agreement. If such Lender shall fail to pay such
amount to Agent and Borrower repays such amount to Agent,
Borrower shall be entitled to pursue any remedies it might
have against such Lender under this Agreement or at law or
in equity for failure to make such Advance.
(c) Selection of Interest Period. Upon delivering a Notice
of Borrowing under Section 2.3(a) hereof, Borrower shall advise
Agent as to whether the Advance shall be (i) a LIBOR Advance, in
which case Borrower shall specify the applicable Interest Period
therefor, or (ii) a Base Rate Advance. Prior to 2:00 P.M. at
least three (3) LIBOR Business Days prior to the expiration of
each Interest Period with respect to a LIBOR Advance, Borrower
shall give Agent notice (a "Rate Selection Notice"), specifying
whether such Advance shall, on the last day of such Interest
Period, be continued as a LIBOR Advance or converted to a Base
Rate Advance. With respect to any Base Rate Advance, Borrower
shall have the right, on any LIBOR Business Day, as the case may
be ("Conversion Date"), to convert such Base Rate Advance to a
LIBOR Advance, by giving Agent a Rate Selection Notice of such
selection at least three (3) LIBOR Business Days prior to such
Conversion Date. Each Rate Selection Notice shall either be in
writing or by telephone immediately followed by written notice.
If any Rate Selection Notice shall specify that said Advance
shall be a LIBOR Advance, such Rate Selection Notice shall also
specify the length of the succeeding Interest Period selected by
Borrower with respect to such Advance. If a Rate Selection
Notice shall not have been timely received by Agent in respect of
a LIBOR Advance prior to the expiration of the then-relevant
Interest Period for such LIBOR Advance, then Borrower shall be
deemed to have elected to continue such Advance as a LIBOR
Advance, with an Interest Period of thirty (30) days. Promptly
after receipt of a Rate Selection Notice under this Section
2.3(c), Agent shall send a copy thereof to each Lender by telex
or telecopy, or similar form of transmission.
Notwithstanding anything to the contrary contained herein,
(i) no more than four (4) Interest Periods shall be in effect at
any one time with respect to LIBOR Advances; (ii) Borrower shall
have no right to select an Interest Period of longer than one (1)
month if at the time of such LIBOR Advance, the outstanding
principal balance of the Loan exceeds the Borrowing Base or, to
the extent Borrower is then permitted to request LIBOR Advances,
if there exists any Default hereunder; (iii) Borrower shall have
no right to request an Interest Period (A) in the event the Loan
has not been converted into the Term Loan, that extends beyond
the Termination Date, or (B) in the event the Loan has been
converted into the Term Loan, that extends beyond a date on which
a quarterly principal payment on the Term Loan is due unless,
giving effect to such Interest Period, the aggregate amount of
LIBOR Advances having Interest Periods ending after such date is
not greater than the principal amount of the Term Loan scheduled
to be outstanding after such date; and (iv) Borrower shall have
no right to request a LIBOR Advance if (A) there then exists any
(1) Event of Default; (2) Default under Sections 7.1(a), 7.1(g)
or 7.1(h) hereof, (3) other Default as to which Agent has given
Borrower notice, or (B) the interest rate applicable thereto
under Section 2.5 would exceed the Maximum Rate in effect on the
first day of the Interest Period applicable to such LIBOR
Advance.
Each Notice of Borrowing and each Rate Selection Notice
shall be considered delivered only upon actual receipt thereof by
the Agent, shall be irrevocable and binding on Borrower and, in
respect of any LIBOR Advance specified in such Notice of
Borrowing or Rate Selection Notice, Borrower shall indemnify
Agent and each Lender against any Consequential Loss incurred by
Agent and each Lender as a result of (i) any failure to fulfill,
on or before the date specified for such Advance, the conditions
to such Advance set forth herein, or (ii) Borrower's requesting
that an Advance not be made, continued or converted on the date
specified for such Advance in the Notice of Borrowing or Rate
Selection Notice. A certificate of Agent and each Lender
establishing the amount due from Borrower according to the
preceding sentence, together with a description in reasonable
detail of the manner in which such amount has been calculated,
shall be conclusive in the absence of manifest error.
SECTION 2.4 NOTES. Each Lender's Pro Rata Share of the
Loan shall be evidenced by a Note payable to the order of such
Lender in the principal face amount equal to such Lender's
Commitment.
SECTION 2.5 INTEREST RATE.
(a) All Advances. The unpaid principal of each Base Rate
Advance shall bear interest from the date of such Advance to but
not including the date such Advance is either converted pursuant
to Section 2.3(c) or is repaid in full at a rate per annum that
shall from day to day be equal to the lesser of (i) the Base Rate
in effect from day to day, or (ii) the Maximum Rate. The unpaid
principal of each LIBOR Advance shall bear interest from the date
of such Advance to but not including the date such Advance is
either converted pursuant to Section 2.3(c) or is repaid in full
at a rate per annum that shall be equal to the lesser of (i) the
LIBOR Rate for the then applicable Interest Period plus one and
one-half percent (1.50%), or (ii) the Maximum Rate.
(b) Default Rate. Upon the occurrence of an Event of
Default, all principal of, and to the extent permitted by
applicable law, interest on the Obligations shall bear interest
until paid at the lesser of (i) the Base Rate from time to time
in effect plus two percent (2%), or (ii) the Maximum Rate. Such
lesser rate is referred to herein and in the Loan Documents as
the "Default Rate".
(c) Late Fee. Borrower acknowledges that late payment to
Agent will cause Agent and Lenders to incur costs not
contemplated by this Agreement, including, but not limited to,
processing and accounting charges. Accordingly, in the event
Borrower fails to make any payment hereunder within fifteen (15)
days after the date such payment is due and payable, Borrower
shall pay to the Agent, for the benefit of the Lenders, as
liquidated damages for the purpose of defraying the expense
incident to handling such delinquent payment and not as a
penalty, a late charge equal to three percent (3%) of the amount
of such payment, whether such payment is of principal, interest,
fees, expenses or other amounts due hereunder or under the Loan
Documents; provided, however, that in the event that (i) Borrower
has not been invoiced for any payment hereunder (other than
principal payments) within fifteen (15) days after the date such
payment was due, and (ii) Borrower requested in writing such
invoice from Agent not later than ten (10) days after the date
such payment was due, Borrower shall not be required to pay such
late fee unless such payment remains unpaid fifteen (15) days
after Borrower's receipt of such invoice. Borrower and Agent
agree that this late charge represents a reasonable sum
considering all of the circumstances existing on the date hereof
and represents a fair and reasonable estimate of the costs that
Agent and Lenders will incur by reason of late payment. Borrower
and Agent further agree that proof of actual damages would be
costly and inconvenient. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue
installment (except to the extent payment of such late charge is
accompanied by payment of the Obligations in full), and shall not
prevent Agent from exercising any of the other rights available
hereunder or any other Loan Document. Such late charge shall be
paid without prejudice to any other rights of Agent. Payment of
any late charge hereunder may be waived upon the consent of the
Majority Lenders.
(d) Recapture Rate. If the applicable interest rate ever
exceeds the Maximum Rate thereby causing the interest charged on
the Obligations to be limited to the Maximum Rate, then, to the
extent permitted by Applicable Law, any subsequent reductions in
the applicable interest rate shall not reduce the rate of
interest charged hereunder below the Maximum Rate until the total
amount of interest accrued on the Obligations equals the amount
of interest that would have accrued thereon if the applicable
contract rate had at all times been in effect.
SECTION 2.6 SPECIAL PROVISIONS FOR LIBOR ADVANCES.
(a) Inadequacy of LIBOR Pricing. If with respect to an
Interest Period for any LIBOR Advance, Agent reasonably
determines that, by reason of circumstances occurring subsequent
to the date hereof affecting the interbank eurodollar market
generally, either deposits in United States Dollars (in the
applicable amounts) are not being offered to Wells Fargo Bank in
the interbank eurodollar market for such Interest Period or that
quotes of the LIBOR Rate are not generally available, then Agent
shall forthwith give notice thereof to Borrower and Lenders,
whereupon until Agent notifies Borrower that the circumstances
giving rise to such suspension no longer exist, (A) the
obligation of Lenders to make LIBOR Advances shall be suspended,
and (B) Borrower shall either (x) repay in full the then-outstanding
principal amount of the LIBOR Advances, together with
accrued interest thereon on the last day of the then-current
Interest Period applicable to such LIBOR Advances, or (y) convert
such LIBOR Advances to Base Rate Advances in accordance with
Section 2.3(c) of this Agreement on the last day of the then-current
Interest Period applicable to each such LIBOR Advance.
(b) Illegality of LIBOR Advances. If, after the date of
this Agreement, the adoption of any applicable law, rule or
regulation, or any change therein, or any change in the
interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender with any request or directive (whether or not having the
force of law) of any such authority, central bank or comparable
agency shall make it unlawful or impossible for any Lender to
make, maintain or fund its LIBOR Advances, such Lender shall
forthwith give notice thereof to Agent and Borrower. Before
giving any notice pursuant to this Section 2.6(b) such Lender
shall designate a different LIBOR lending office if such
designation will avoid the need for giving such notice and will
not be otherwise disadvantageous to such Lender (as determined in
good faith by such Lender). Upon receipt of such notice,
Borrower shall either (i) repay in full the then outstanding
principal amount of any of such Lender's LIBOR Advances, together
with accrued interest thereon, or (ii) convert such Lender's
LIBOR Advances to Base Rate Advances, on either (A) the last day
of the then-current Interest Period applicable to such LIBOR
Advance if such Lender may lawfully continue to maintain and fund
such LIBOR Advance to such day or (B) immediately if such Lender
may not lawfully continue to fund and maintain such LIBOR Advance
to such day.
(c) Increased Costs. If, after the date hereof, any
Governmental Authority, central bank or other comparable
authority, shall at any time impose, modify or deem applicable
any reserve (including, without limitation, the LIBOR Reserve
Requirement and any other reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit or
similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender, or shall impose on
any Lender (or its eurodollar lending office) or the interbank
eurodollar market any other condition affecting its LIBOR
Advances, such Lender's Note, its obligation to make LIBOR
Advances or its obligations to issue, maintain or participate in
Letters of Credit; and the result of any of the foregoing is to
increase the cost to such Lender of making or maintaining its
LIBOR Advances or of agreeing to issue or of issuing, maintaining
or participating in Letters of Credit, or to reduce the amount of
any sum received or receivable by such Lender under this
Agreement, or under such Lender's Note, by an amount deemed by
such Lender to be material, then, within five (5) days after
demand by such Lender, Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for
such increased cost or reduction with respect to such Lender's
Note, its obligation to make or maintain LIBOR Advances or its
obligations to issue, maintain or participate in Letters of
Credit. Such Lender will use good faith and reasonable efforts
to designate a different lending office for such Lender's LIBOR
Advances if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole
opinion of such Lender, be disadvantageous to such Lender. A
certificate of such Lender claiming compensation under this
Section 2.6(c) and setting forth in reasonable detail the
calculation of the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error.
If such Lender demands compensation under this Section 2.6(c) in
respect of its LIBOR Advances, then Borrower may at any time,
upon at least five (5) Business Days' prior notice to such
Lender, either (i) repay in full such Lender's then outstanding
LIBOR Advances, together with accrued interest thereon to the
date of prepayment or (ii) convert such Lender's LIBOR Advances
to Base Rate Advances in accordance with the provisions of this
Agreement; provided, however, that Borrower shall be liable for
any Consequential Loss arising pursuant to such actions, unless
the requirement or condition giving rise to the incurred costs is
not generally applicable to lenders similar to the affected
Lender, but rather is applicable solely to such Lender.
(d) Effect on Base Rate Advances. If notice has been given
pursuant to Section 2.6(a) or Section 2.6(b) requiring LIBOR
Advances of a Lender to be repaid or converted, then unless and
until Agent notifies Borrower that the circumstances giving rise
to such repayment no longer apply, all Advances shall be Base
Rate Advances. If Agent notifies Borrower that the circumstances
giving rise to such repayment no longer apply, Borrower may
thereafter select Advances from such Lender to be LIBOR Advances
in accordance with Section 2.3(c) of this Agreement.
(e) Payments Not At End of Interest Period. If Borrower
makes any payment of principal with respect to any LIBOR Advance
on any day other than the last day of an Interest Period
applicable to such LIBOR Advance (other than any such payment
required by Section 2.6(b)(ii)(B) hereof), then Borrower shall
reimburse Lenders on demand the Consequential Loss incurred by
Lenders as a result of the timing of such payment. A certificate
of any Lender setting forth in reasonable detail the basis for
the determination of the amount of Consequential Loss shall be
delivered to Borrower by Agent and shall, in the absence of
manifest error, be conclusive and binding. Any conversion of a
LIBOR Advance to a Base Rate Advance on any day other than the
last day of the Interest Period for such LIBOR Advance shall be
deemed a payment for purposes of this Section 2.6(e).
(f) Each Lender shall notify Borrower and the Agent of any
event occurring after the date of this Agreement entitling such
Lender to compensation under Section 2.6(c) within 45 days after
such Lender obtains actual knowledge thereof; provided that if
any Lender fails to give such notice to Borrower within 45 days
after it obtains actual knowledge of such an event, such Lender
shall, with respect to compensation payable pursuant to such
subsection (c) in respect of any costs resulting from such event,
only be entitled to payment under subsection (c) for costs
incurred from and after the date 45 days prior to the date that
such Lender gives such notice.
SECTION 2.7 PAYMENTS.
(a) Payment of Interest. Interest on the unpaid principal
amount of each Advance shall be payable monthly as it accrues on
the first day of each month, commencing with the first such day
occurring after the date of the Initial Advance, and thereafter
until the Loan is paid in full.
(b) Payment of Principal of Loan. Subject to Section 2.12,
the Loan shall be due and payable in full on the Termination
Date.
(c) Payment of Principal of Term Loan. Borrower shall
repay the principal balance of the Term Loan in twelve equal
consecutive quarterly installments, with the first installment
due on the first day of the month immediately following the date
which is ninety (90) days after the Term Loan Conversion Date,
the second through eleventh installments due on the first day of
the month every three (3) months thereafter, and the final
installment due on the Term Loan Termination Date.
(d) Optional Prepayments. Borrower may, upon at least one
(1) Business Day's notice to Agent, prepay the Loan in whole at
any time, or from time to time in part in an amount equal to
$100,000.00 or any greater amount which would reduce the
outstanding principal balance of the Loan to a multiple of
$100,000.00, by paying the principal amount to be prepaid
together with accrued interest thereon to the date of prepayment;
provided, however, that if Borrower shall prepay the principal of
any LIBOR Advance on any date other than the last day of the
Interest Period applicable thereto, Borrower shall simultaneously
therewith make the payments required by Section 2.6(e) hereof;
provided further, however, that Borrower shall not make any
prepayment which would reduce the outstanding principal balance
of the Loan to zero unless Borrower concurrently reduces the
Commitments to zero pursuant to Section 2.1. Any such prepayment
made on the Term Loan on or after the Term Loan Conversion Date
shall be applied to the principal installments of the Loan in the
inverse order of their maturity.
(e) Mandatory Prepayments.
(i) In the event the sum of the outstanding principal
balance of the Advances made by any Lender plus such Lender's Pro
Rata Share of the aggregate face amount of the outstanding
Letters of Credit exceeds such Lender's Commitment, Borrower
shall, within two (2) days after demand therefor, pay to Agent
for the benefit of such Lender, the amount by which such Advances
and the Lender's Pro Rata Share of the outstanding Letters of
Credit exceeds such lender's Commitment.
(ii) In the event the sum of the outstanding principal
balance of the Loan plus the aggregate face amount of the
outstanding Letters of Credit exceeds the Borrowing Base at any
time other than by reason of a reduction of the Borrowing Base
pursuant to Section 3.1(b)(ii), Borrower shall, within thirty
(30) days after such date, deliver to each Lender a plan
acceptable to the Lenders for bringing the Loan within the
Borrowing Base within ninety (90) days after the acceptance of
such plan through the payment of such excess, the admission of
additional Projects into the Borrowing Base, or through other
means acceptable to Lenders in their sole discretion. Lenders
agree that they will review and respond to such proposed plan in
a reasonably prompt manner. In the event either (A) Borrower
fails to deliver an acceptable plan to the Lenders within said
thirty (30) days or (B) the Loan continues to exceed the
Borrowing Base for ninety (90) days following delivery of an
acceptable plan (or, if the Lenders, in their discretion, consent
to a period longer than 90 days as a part of any such plan,
beyond the end of such longer period), Borrower shall prepay the
amount of the Loan in excess of the Borrowing Base, together with
accrued interest thereon (collectively, the "Overadvance
Amount"), as follows:
(1) on such thirtieth (30th) day, ninetieth (90th) day
or the last day of such longer period as the Lenders, in
their discretion, have approved, as the case may be, (the
"Applicable Date"), Borrower shall prepay an amount equal to
the lesser of the Overadvance Amount and the outstanding
principal amount of Base Rate Advances;
(2) to the extent that the outstanding principal
amount of Base Rate Advances are less than the Overadvance
Amount, on the last day of each Interest Period to expiring
after the Applicable Date, Borrower shall prepay an amount
equal to the lesser of the amount of the LIBOR Advance to
which such Interest Period relates and the unpaid portion of
the Overadvance Amount; and
(3) on thirtieth (30th) day after the Applicable Date,
Borrower shall prepay the remaining portion of the
Overadvance Amount.
(iii) Failure by Borrower to have complied with the
foregoing in a timely manner shall constitute an Event of Default
without further notice or grace period hereunder. No further
Advances, or release of all or any portion of any Eligible
Project, shall be permitted so long as such excess borrowing
condition shall continue to exist. Nothing in this Section
2.7(e) shall excuse Borrower's compliance with all terms,
conditions, covenants and other obligations imposed upon it under
the Loan Documents during the period of such excess borrowing,
nor in any manner condition or impair Agent's or Lenders' rights
thereunder in respect of any such breach thereof.
(f) General Provisions as to Payments. Borrower shall make
each payment of principal of, and interest on, the Loan or fees
payable hereunder, not later than 11:00 A.M. (Pacific Standard
Time or Pacific Daylight Time, as the case may be) on the date
when due, without offset, deduction or counterclaim, in Federal
or other funds immediately available, at Agent's Lending Office.
Whenever any payment of principal of, or interest on, the Loan or
fees (if any) shall be due on a day which is not a Business Day,
the date for payment thereof shall be extended to the next
succeeding Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(g) Application of Recoveries. Except to the extent
otherwise provided in Section 8.13 hereof, all payments made and
actually received by the Agent in respect of the Loan (from any
person or source including, without limitation, proceeds of title
insurance policies with respect to any Eligible Project) shall be
applied in the following order of priority:
(i) to the reimbursement of any reasonable costs
incurred by the Agent to administer, enforce, collect or deal
with the Loan (including payments made pursuant to Section 8.11
or Section 8.12 hereof) (or to reimbursement of the Lenders to
the extent such costs have been paid by the Lenders) (based on
Pro Rata Shares thereof);
(ii) to the repayment of any Protective Advances (to
the extent not paid pursuant to clause (i) above) (based on Pro
Rata Shares thereof);
(iii) to the payment of all interest (including
default interest) due and payable on the Notes (based on Pro Rata
Shares thereof);
(iv) to the payment of fees payable under the Loan
Documents (based on Pro Rata Shares thereof); and
(v) to the payment of principal of the Notes (based
on Pro Rata Shares thereof).
Agent shall wire transfer to each Lender, at such Lender's
bank account as designated by such Lender to Agent in writing,
its Pro Rata Share of any payments (to the extent payable to
Lender pursuant to this Section 2.7(g)) within one (1) Business
Day of Agent's receipt of such payment. Agent shall pay to the
Lenders interest thereon, at the Federal Funds Rate, from the
Business Day following receipt of such funds by Agent until such
funds are paid in immediately available funds to the Lender. The
Agent shall in any event not be bound to inquire into or
determine the validity, scope or priority of any interest or
entitlement of any Lender and may suspend all payments and seek
appropriate relief (including, without limitation, instructions
from the Majority Lenders or all Lenders, as applicable, or an
action in the nature of interpleader) in the event of any doubt
or dispute as to any apportionment or distribution contemplated
hereby. In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any apportionment
or distribution of payments made by it in good faith pursuant to
this Section, and if any such apportionment or distribution is
subsequently determined to have been made in error, the sole
recourse of any person to whom payment was due, but not made,
shall be to recover from the recipients of such payments any
payment in excess of the amount to which they are determined to
have been entitled.
(h) Excess Payments. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of its interest in
the Loan in excess of its Pro Rata Share in the Loan, then such
Lender shall forward such excess payment to Agent and Agent shall
distribute such excess payment to each Lender Pro Rata Shares
thereof; provided, however, that if all or any portion of such
excess payment is thereafter recovered by the Borrower or other
party entitled thereto through legal action or otherwise, each
Lender shall reimburse the party returning such excess payment in
an amount equal to such Lender's Pro Rata Share of the excess
payment.
SECTION 2.8 FEES.
(a) Unused Fee. Borrower agrees to pay to the Agent, for
the benefit of the Lenders an Unused Facility Fee for each
calendar quarter, or portion thereof, during which any of the
Commitments are in effect, during the period commencing on the
date hereof and continuing to but not including the Term Loan
Conversion Date (in the event the Loan is converted into the Term
Loan) or the Termination Date (in the event the Loan is not
converted into the Term Loan), equal to the average daily unused
portion of the Commitments during such quarter times one-eighth
percent ( %) per annum; provided, however, that if the average
daily unused portion of the Commitments is greater than fifty
percent (50%) of the Commitment, during any quarter (or portion
thereof for which such fee is computed), such Unused Facility Fee
shall be equal to the sum of (i) fifty percent (50%) of the
Commitments times one-eighth percent (1/8%) per annum, plus (ii)
the amount by which the average daily unused portion of the
Commitments exceeds fifty percent (50%) of the Commitments, times
one-quarter percent (1/4%) per annum. Such Unused Facility Fee on
the unused portion of the Commitments shall be payable quarterly
in arrears on the first day of each December, March, June and
September, commencing on December 1, 1996, and continuing
regularly thereafter so long as the Commitment is in effect, and
shall also be payable on the Term Loan Conversion Date or the
Termination Date, as applicable. By way of illustration, the
Unused Facility Fee for the calendar quarter ending on September
30 shall be due and payable on December 1. Borrower acknowledges
that the Unused Facility Fees payable hereunder are bona fide
commitment fees and are intended as reasonable compensation to
Lenders for committing to make funds available to Borrower as
described herein and for no other purposes. For purposes of this
Section 2.8(a), the unused portion of the Commitments shall mean
the amount by which the aggregate amount of the Commitments
exceeds the sum of (x) the aggregate principal amount of the
outstanding Advances plus (y) the aggregate face amount of the
outstanding Letters of Credit.
(b) Extension Fee. If, pursuant to Section 2.11, Lenders
grant an extension of the Termination Date, Borrower agrees to
pay to Agent, for the benefit of the Lenders, an extension fee
equal to fifteen one-hundredths percent (0.15%) of the aggregate
amount of the Commitments at such time. Such fee shall be
payable on the date on which Lenders grant such extension.
(c) Term Loan Conversion Fee. If, pursuant to Section
2.12, the outstanding balance of the Loan is converted into the
Term Loan, Borrower agrees to pay to Agent, for the benefit of
the Lenders, an annual conversion fee, payable on each of the
first anniversary and the second anniversary of the Term Loan
Conversion Date, equal to fifteen one-hundredths percent (0.15%)
of the principal balance of the Term Loan outstanding on each
such date (taking into account any principal payment made on such
dates).
(d) Other Fees. Borrower shall pay Agent such fees as are
provided for in the fee agreement between Agent and Borrower, as
set forth in that certain letter dated September 26, 1996 from
Agent to Borrower.
(e) Letter of Credit Fees. As additional consideration for
the issuance of any Letters of Credit pursuant to Section 2.2
hereof, Borrower agrees to pay to the Agent, for the account of
the Lenders in accordance with their respective Pro Rata Shares,
a letter of credit fee, in addition to the processing,
administrative and similar fees normally charged by and payable
to the Issuing Bank in connection with the issuance of Letters of
Credit and any other sums due pursuant to Article 3 hereof, equal
to one and one-half percent (1 1/2%) per annum of the average daily
aggregate undrawn amount of the Letters of Credit, payable
quarterly on the last day of each fiscal quarter of Borrower and
on the Termination Date.
SECTION 2.9 COMPUTATION OF INTEREST AND FEES. Fees and
interest on the Loan and the Letters of Credit shall be computed
on the basis of a year of 360 days and paid for the actual number
of days elapsed (including the first day but excluding the last
day).
SECTION 2.10 OPTION TO REPLACE LENDERS. If any Lender,
other than Agent, shall:
(a) become a Defaulting Lender;
(b) has either (i) declined to approve as Eligible
Projects three or more Projects which the Agent and each of
the remaining Lenders have approved as Eligible Projects or
(ii) approved three or more Projects as Eligible Project on
the condition that the Approved Percentage for each such
Project is at least fifteen percent (15%) below the average
Approved Percentage approved by the each of the remaining
Lenders for such Project;
(c) become subject to the provisions of Section
2.6(b);
(d) make any demand for payment or reimbursement
pursuant to Section 2.6(c) or Section 9.7 hereof; or
(e) has declined to approve an Extension Request and
each of the remaining Lenders have approved such Extension
Request.
then, in any of the foregoing cases, provided that (x) there does
not then exist any Default or Event of Default and (y) in the
case of the circumstances described in clauses (c) and (d), the
circumstances resulting in such demand for payment or
reimbursement under Section 2.6(c) or Section 9.7 or the
applicability of Section 2.6(b) are not applicable to all
Lenders, the Borrower may either (i) designate another financial
institution (such financial institution being herein called a
"Replacement Lender") acceptable to the Agent (which acceptance
will not be unreasonably withheld) and which is not an Affiliate
of the Borrower, to assume such Lender's Commitment hereunder and
to purchase the Loan of such Lender and such Lender's rights
under this Agreement and the Note held by such Lender, all
without recourse to or representation or warranty (except as to
title of such Lender's portion of the Loan and as to the
authority of such Lender to transfer the same) by, or expense to,
such Lender, for a purchase price equal to the outstanding
principal amount of the Loan payable to such Lender plus any
accrued but unpaid interest on such Loan and accrued but unpaid
fees owing to such Lender plus any amounts payable to such Lender
under Section 2.6(c) or Section 9.7, if any, hereof, and upon
such assumption, purchase and substitution, and subject to the
execution and delivery to the Agent by the Replacement Lender of
documentation reasonably satisfactory to the Agent (pursuant to
which such Replacement Lender shall assume the obligations of
such original Lender under this Agreement), the Replacement
Lender shall succeed to the rights and obligations of such Lender
hereunder or (ii) pay to the Agent, as cash collateral, an amount
equal to such Lender's Pro Rata Share of the outstanding Letters
of Credit and pay to such Lender the outstanding principal amount
of the Advances payable to such Lender plus any accrued but
unpaid interest on such Advances and accrued but unpaid fees
owing to such Lender plus any amounts payable to such Lender
under Section 2.6(c) or Section 9.7 hereof. In the event that
the Borrower exercises its rights under the preceding sentence,
the Lender against which such rights were exercised shall no
longer be a party hereto or have any rights or obligations
hereunder. The remedies of Borrower under this Section 2.10
shall be cumulative of any other remedies Borrower may have
against a Defaulting Lender under this Agreement or at law or in
equity.
SECTION 2.11 EXTENSION OF TERMINATION DATE. Borrower
may request Agent and Lenders to extend the current Termination
Date by successive one-year intervals by executing and delivering
to Agent at least ninety (90) days but no more than one hundred
twenty (120) days prior to the date which is one (1) year prior
to the current Termination Date, a written request in the form of
Exhibit I (an "Extension Request"). Agent shall forward to each
Lender a copy of each Extension Request delivered to Agent
promptly upon receipt thereof. Borrower understands that this
Section 2.11 has been included in this Agreement for Borrower's
convenience in requesting an extension and acknowledges that none
of Lenders nor Agent has promised (either expressly or
impliedly), nor has any obligation or commitment whatsoever, to
extend the Termination Date at any time. If all Lenders shall
have notified Agent on or prior to the date which is forty-five
(45) days prior to the date which is one (1) year prior to the
current Termination Date that they accept such Extension Request,
the Termination Date shall be extended for one (1) year. If one
and only one Lender shall not have notified Agent on or prior to
the date which is forty-five (45) days prior to the date one year
prior to the Termination Date that it accepts such Extension
Request, the Termination Date shall not be extended unless
Borrower proceeds pursuant to Section 2.10, in which event the
Termination Date shall be extended as to all Lenders which have
accepted such Extension Request. If two or more Lenders shall
not have notified Agent on or prior to the date which is forty-five
(45) days prior to the date one year prior to the Termination Date
that they accept such Extension Request, the Termination Date shall
not be extended. Agent shall promptly notify Borrower whether the
Extension Request has been accepted or rejected.
SECTION 2.12 TERM LOAN CONVERSION. Subject to the terms
and conditions of this Agreement, if any Extension Request of
Borrower shall be denied, Borrower may then elect to convert the
aggregate principal amount of the Loan then outstanding into a
term loan owing to Lenders (the "Term Loan") provided (a)
Borrower has given Agent notice of Borrower's intention to so
convert the Loan not less than thirty (30) days following receipt
by Borrower of notice from Agent that Borrower's Extension
Request has been rejected, and (b) the conditions set forth in
Section 4.4 have been satisfied as of the date one year prior to
the current Termination Date. Any such conversion shall become
effective on the date which is one (1) year prior to the
Termination Date (the "Term Loan Conversion Date"). Upon the
effectiveness of the conversion of the outstanding principal
balance of Loan into the Term Loan as contemplated by this
Section, Borrower shall have no right to request or borrow, and
no Lender shall have any obligation to make, any Advance. If the
Loan is not converted to the Term Loan, the Loan shall be due and
payable in full on the Termination Date.
ARTICLE 3.
BORROWING BASE; ELIGIBLE PROJECTS
SECTION 3.1 Borrowing Base.
(a) Admission of Projects into the Borrowing Base.
(i) As of the date hereof, the Lenders have admitted
into the Borrowing Base as Eligible Projects the Projects
listed on Schedule 3.1 attached hereto, with the amount of
the Borrowing Base attributable thereto as is set forth in
respect of each such Project on Schedule 3.1.
(ii) If Borrower desires that Lenders admit a Project
into the Borrowing Base, Borrower shall notify Agent thereof
in writing. No Project will be evaluated by Lenders for
potential inclusion into the Borrowing Base unless it is a
domestic operating regional retail shopping mall or retail
strip shopping center, and unless and until Borrower
delivers to Agent and each Lender the following, in form and
substance acceptable to Agent:
(A) A current operating statement for such
Project audited or certified by Borrower as being true
and correct in all material respects and prepared in
accordance with GAAP and a comparative sales report for
the current period and for the previous two (2) fiscal
years or, if such Project has been in operation only
for a lesser period, such lesser period; and
(B) A current rent roll for such Project,
certified by Borrower as being true and correct in all
material respects and a operating and occupancy history
of such Project for the previous three (3) fiscal years
or, if such Project has been in operation only for a
lesser period, such lesser period, in form satisfactory
to Agent, and certified by Borrower and the management
agent of such Project to be true and correct.
(iii) Within ten (10) days after the Agent and the
Lenders have received the foregoing documents and
information, each Lender shall notify the Agent whether or
not such Lender is willing to consider such Project and the
Agent shall notify the Borrower as to whether the Agent and
the Lenders are prepared to consider such Project for
inclusion in the Borrowing Base; provided, however, that
failure to give such notice within such period shall not
constitute approval to consider such Project as an Eligible
Project. If the Lenders agree to so consider such Project,
Agent will promptly notify Borrower and obtain an Appraisal
of such Project in order to determine the Appraised Value
thereof. Upon request of Borrower, Agent shall notify
Borrower of the reasons, to the Agent's knowledge, for any
Lender's rejection of a Project as an Eligible Project. No
Project will be further evaluated by Lenders for potential
inclusion into the Borrowing Base unless and until Borrower
delivers to the Agent and each Lender the following, in form
and substance acceptable to Agent and/or the Majority
Lenders:
(A) A copy of the most recent ALTA Owner's Policy
of Title Insurance covering such Project showing the
identity of the fee titleholder thereto and all matters
of record;
(B) Copies of all documents of record reflected
in Schedule B of the Owner's Policy of Title Insurance
and a copy of the most recent real estate tax bill and
notice of assessment;
(C) A survey of such Project certified by a
surveyor licensed in the applicable jurisdiction to
have been prepared in accordance with the then
effective Minimum Standard Detail Requirements for
ALTA/ACSM Land Title Surveys;
(D) A "Phase I" environmental assessment of such
Project not more than twelve (12) months old;
(E) A certificate from a licensed engineer or
other professional satisfactory to Agent that such
Project is not located in a Special Flood Hazard Area
as defined by the Federal Insurance Administration;
(F) Copies of (I) all Major Leases, (II) all
Major Agreements, (III) the form or forms of tenant
lease used at such Project, and (IV) all material
maintenance or service agreements affecting such
Project;
(G) In the case of a Project which was owned by
Borrower or any Wholly Owned Subsidiary of Borrower or
Subpartnership on the Effective Date, a summary,
prepared by a Senior Officer or appropriate vice
president of the CBL Properties, Inc., of any
engineering, mechanical, structural or maintenance
studies performed with respect to such Project or, in
the case of any other Project, copies of any
engineering, mechanical, structural or maintenance
studies performed (if not previously performed, such
studies shall be required by Agent on behalf of
Lenders) with respect to such Project;
(H) Evidence that such Project complies with
applicable zoning and land use laws;
(I) A schedule of all personal property,
including intangible personal property owned by
Borrower or any Wholly Owned Subsidiary of Borrower or
Subpartnership and used in connection with the
maintenance or operation of such Project; and
(J) Such other information reasonably requested
by Agent in order to evaluate the Project for potential
inclusion in the Borrowing Base.
(iv) Within thirty (30) days after the delivery to the
Lenders of all information and other documents required
hereby or requested by the Agent relating to the Project
proposed by Borrower as an Eligible Project (including, but
not limited to, an Appraisal in respect of such Project),
each Lender shall notify the Agent whether such Lender
approves such Project as an Eligible Project and the Agent
shall provide Borrower with written notice of whether the
Supermajority Lenders have approved a Project as an Eligible
Project and, if so approved, the Approved Percentage
applicable to such Project; provided, however, that failure
to give such notice within such period shall not constitute
approval of such Project as an Eligible Project; provided,
further, that is such Project is not approved as an Eligible
Project, the Agent shall, upon the request of Borrower,
notify Borrower as to Agent's understanding of why such
Project was not approved as an Eligible Project;
(v) Upon acceptance by Supermajority Lenders and
execution and delivery of documents and completion of all
other closing requirements imposed by Agent, which shall
include the Collateral Documents and other items described
in Section 4.3 and such other items or documents as may be
appropriate under the circumstances, including updates of
the documents described in Section 3.1(a)(ii) and Section
3.1(a)(iii)(C),(D) (if then more than twelve (12) months
old), (F) and (I), such Project shall become an Eligible
Project admitted into the Borrowing Base.
(vi) The Lenders may, in their sole discretion, notify
Borrower that a Project that is not otherwise an Eligible
Property, may be included in the Borrowing Base, provided
that Agent or the Lenders may require additional terms and
conditions (including a lower Approved Percentage or a
different method of calculating the Permanent Loan Estimate)
to be evidenced in writing as a supplement to this Agreement
in order for such Project to be an Eligible Project and to
be admitted into the Borrowing Base.
(vii) If the Appraised Value of a Project is adjusted
from that set forth in the Appraisal relating to such
Project as a result of Agent's internal review, Agent shall
advise the Borrower and, upon request of Borrower, provide a
reasonably detailed report describing the nature and amount
of such adjustments; provided, however, that failure to
provide such a report shall not affect the Appraised Value
of a Project;
(viii) Pursuant to Section 9.3 hereof, Borrower shall
pay to Agent all reasonable third-party out-of-pocket
expenses (which shall be deemed to include, if outside
counsel is not used by the Agent, the allocated cost of
in-house counsel of Agent) of Agent incurred in connection
with Agent's review of requests for a Project to be admitted
into the Borrowing Base.
(ix) If it shall be unlawful for Agent to require
Borrower to pay any taxes with respect to a Project or the
Collateral Documents covering a Project, then the Agent may,
in its sole discretion, refuse to submit such Project to the
Lenders for consideration whether such Project shall be an
Eligible Project and be admitted into the Borrowing Base,
or, if such Project has been admitted into the Borrowing
Base, then the Agent or the Lenders may, in its or their
sole discretion, elect to remove such Project from the
Borrowing Base.
(b) Borrowing Base. The Borrowing Base for the Projects
shall be, as of any date, equal to (i) the lesser of (A) the sum
of the Approved Percentage of the Appraised Value of each of the
Eligible Projects or (B) the aggregate Permanent Loan Estimates
for the Eligible Projects less (ii) reserves established pursuant
to Section 7.5 hereof. In all events, the Borrowing Base is
subject to reduction in the manner set forth in this Agreement
including, without limitation, Section 6.3 and Section 7.4
hereof.
(c) Computation of Net Operating Income. Borrower shall
deliver to Agent quarterly computations of Net Operating Income
for each Eligible Project with the Borrowing Base information
required pursuant to Section 6.1(d) herein. Agent shall notify
Borrower in writing of any additional adjustments to Net
Operating Income required by Agent and corresponding adjustments
to the Borrowing Base (if any).
(d) Release of Eligible Projects. Upon repayment and
satisfaction in full of all Obligations and the termination of
all Commitments and this Agreement, Agent will release the
Collateral Documents with respect to each of the Eligible
Projects. From time to time Borrower may request, upon not less
than thirty (30) days prior written notice, that an Eligible
Project or portion thereof be released from the Liens created by
the Collateral Documents applicable thereto, which release
("Property Release") shall be delivered by Agent if all of the
following conditions are satisfied as of the date of such
Property Release:
(i) after giving effect to such Property Release, any
of Post Oak Mall, Georgia Square Mall or any regional mall
which may be included in the Borrowing Base and is
determined by the Majority Lenders to be of equivalent
financial strength to any of the foregoing malls, will
remain as an Eligible Project in the Borrowing Base;
(ii) no Default or Event of Default has occurred and is
then continuing or will occur after giving effect to such
Property Release and the reduction in the Borrowing Base by
reason of the release of all or a portion of such Eligible
Project;
(iii) the Termination Date has not occurred by
reason of the events described in clauses (b) or (c) of the
definition thereof;
(iv) Borrower shall have delivered to Agent a Borrowing
Base Certificate reflecting the Borrowing Base after giving
effect to such Property Release;
(v) Borrower shall have delivered to Agent all
documents and instruments reasonably requested by Agent
including, without limitation, the following:
(A) a survey of the portion of the Eligible
Project to be released;
(B) the quitclaim deed or other instrument to be
used to effect such release; and
(C) an endorsement to the mortgagee title
insurance policy in effect with respect to
the affected Eligible Project.
(vi) Agent shall have determined that the outstanding
principal balance of the Loans will not exceed the Borrowing
Base after giving effect to such Property Release and any
prepayment to be and/or the acceptance of any prepayment to
be made and/or the acceptance of any Project as an
additional or replacement Eligible Project in the Borrowing
Base to be given concurrently with such Property Release;
and
(vii) with respect to a Property Release relating
to a portion of an Eligible Project, (A) the value of such
Property is $1,000,000.00 or less and (ii) after giving
effect to the proposed Property Release, the aggregate value
of all Property Releases made in respect of such Eligible
Property is $5,000,000.00 or less.
If following any such Property Release, the Wholly-Owned
Subsidiary or Subpartnership owning the Project so released does
not have any ownership interest in any of the remaining
Collateral, the Agent and the Lenders shall, at Borrower's
request, release such Wholly-Owned Subsidiary or Subpartnership
from any guaranty of the Obligations executed by it.
SECTION 3.2 LEASES AND MAJOR AGREEMENTS.
(a) Borrower shall, or shall cause any Wholly Owned
Subsidiary of Borrower or Subpartnership Owning the applicable
Eligible Project to, (i) submit any and all proposed Major
Agreements and Major Leases to Agent for approval prior to the
execution thereof, which approval shall not be unreasonably
withheld; (ii) duly and punctually perform and comply with any
and all material representations, warranties, covenants and
agreements expressed as binding upon Borrower under any Major
Agreement or Major Lease; (iii) proceed in a commercially
reasonable manner to maintain each of the Major Agreements and
Major Leases in full force and effect during the term thereof;
(iv) appear in and defend any action or proceeding in any manner
connected with any of the Major Agreements and Major Leases; (v)
deliver to Agent execution counterparts of all Major Agreements
and Leases; (vi) act in a commercially reasonable manner in
entering into, performing and enforcing the Major Agreements and
the Leases; and (vii) deliver to Agent such further information,
and execute and deliver to Agent such further assurances and
assignments, with respect to the Major Agreements and Leases as
Agent may from time to time reasonably request. Without Agent's
prior written consent, Borrower shall not (A) do or knowingly
permit to be done anything to materially impair the value of any
of the Major Agreements or Major Leases; (B) except for deposits
not to exceed one month's rent for any one lessee, collect any of
the Rent more than one (1) month in advance of the time when the
same becomes due; (C) discount any future accruing Rent; (D)
amend or modify any of the financial or other economic terms of
any Major Agreement or Major Lease; (E) terminate any Major
Agreement or Major Lease other than as a result of a material
default thereunder; or (F) assign or grant a security interest in
or to any of the Major Agreements or Leases.
(b) Borrower shall not, and shall not permit any
Subsidiary or Subpartnership owning an Eligible Project to,
amend, modify in any material manner, or terminate its management
agreement with CBL Management, Inc. except upon thirty (30) days
prior written notice to Agent. If such proposed amendment or
modification limits or extinguishes Borrower's absolute right to
terminate the management agreement upon thirty (30) days notice
or Agent notifies Borrower that, in Agent's judgment, such
proposed amendment, modification or termination, as applicable,
will either (i) increase the management fees, reimbursements or
other payments to manager to levels which are in excess of
applicable market levels or (ii) have a material adverse effect
upon Borrower or any Affiliate or Subsidiary of Borrower or its
ability to perform its obligations under the Collateral
Documents, then Borrower shall not enter into such amendment,
modification or termination without the consent of Majority
Lenders; provided however, that any such termination which is
required by Applicable Law in order for CBL Properties, Inc. to
maintain its status as a real estate investment trust shall not
require such consent. Borrower shall not enter into a management
agreement with a manager other than CBL Management, Inc., or
another affiliate or subsidiary of Borrower, in respect of any
Eligible Project without the prior written consent of Majority
Lenders.
(c) Within sixty (60) days after the execution of each
Major Lease, Borrower agrees to deliver or to cause to be
delivered to Agent a fully executed and acknowledged
non-disturbance, attornment, estoppel and subordination agreement
from the tenant under such Major Lease. With respect to all
Leases, Borrower agrees to exercise diligent efforts to deliver
to Agent fully executed estoppel certificates from each tenant at
such times as Agent may reasonably request, and Agent agrees to
execute attornment agreements with each such tenant who requests
such an agreement; provided, however, that such tenant is not in
default of any of its obligations under its Lease. At Agent's
request, Borrower shall also exercise diligent efforts to deliver
fully executed estoppel certificates executed by the parties to
the Major Agreements. All agreements required under the terms of
this Section 3.2(c) shall be in form and substance satisfactory
to Agent in its sole but reasonable discretion.
SECTION 3.3 APPRAISALS. (a) Prior to classifying any
Project as an Eligible Project, the Agent will cause, at
Borrower's expense, an Appraisal to be made of such Project for
use in determining the Appraised Value thereof. From time to
time an Eligible Project may be reappraised, at Borrower's option
and expense, upon notice by Borrower to Agent of its exercise of
its option to reappraise a Project, in which event Agent shall
cause such Appraisal or Appraisals to be made. Agent shall
disclose the results of such Appraisal to Borrower after
acceptance of such Appraisal by Agent.
(b) In addition, no later than June 28, 1998, upon
five (5) Business Days prior written notice to Borrower, Agent
shall, at Borrower's expense, cause an Appraisal of all of the
Eligible Projects to be performed, to redetermine the Appraised
Value thereof.
(c) In addition, at any time and from time to time
(but no more often than once per year as to each Eligible
Project), upon five (5) Business Days prior written notice to
Borrower, Agent may, at Lenders' expense, cause an Appraisal of
any or all Eligible Projects to be prepared, to redetermine the
Appraised Value thereof.
(d) In addition, at any time and from time to time,
upon five (5) Business Days prior written notice to Borrower,
Agent may, at Borrower's expense, redetermine the Appraised Value
of any Eligible Project if (i) in Agent's reasonable judgment a
material adverse change has occurred with respect to such
Eligible Project, including without limitation, an anchor or
tenant under a Major Lease in an Eligible Project closes or
vacates its premises and no commercially reasonably replacement
is obtained, or a (ii) major casualty or condemnation has
occurred with respect to such Eligible Project, or (iii)
reasonably necessary or advisable in order to comply with Legal
Requirements applicable to Agent or any Lender.
SECTION 3.4 MAJOR CONSTRUCTION. If Borrower or any
Wholly owned Subsidiary or Subpartnership intends to engage in
any construction, remodeling or demolition project or series of
related projects, with respect to an Eligible Project (each, a
"Construction Project"), the aggregate cost of which will exceed
$1,000,000.00, Borrower shall first notify Agent, provided that
(i) if any Construction Project (whether or not carried on
simultaneously or in conjunction with other Construction
Projects) consists of construction of improvements which would
materially adversely affect the value of such Eligible Project or
(ii) the aggregate cost of such Construction Project (other than
for tenant improvements) will exceed $5,000,000.00 (a "Major
Construction Project"), such Major Construction Project shall be
subject to approval of the Majority Lenders, which approval shall
not be unreasonably withheld.
ARTICLE 4.
CONDITIONS
SECTION 4.1 EFFECTIVENESS. This Agreement shall become
effective on September 26, 1996, provided that on or before said
date all of the following conditions shall have been satisfied
(the "Effective Date"):
(a) receipt by Agent of counterparts of this Agreement
signed by each of the parties hereto;
(b) receipt by Lenders of the duly executed Notes on or
before the Effective Date, complying with the provisions of
Section 2.4 hereof;
(c) receipt by Agent of the opinions of Shumacker &
Thompson, P.C. and such other counsel located in the
jurisdictions where the Eligible Projects are located, addressed
to Agent and each Lender and satisfactory in form and substance
to Agent covering the legal matters addressed in Article 5 hereof
and such additional matters relating to the transactions
contemplated hereby as Agent may reasonably request;
(d) receipt by Agent of a certificate of Borrower
approving the execution, delivery and performance of this
Agreement (when executed and delivered pursuant to this
Agreement) and the transactions contemplated therein, duly
adopted by Borrower in accordance with the terms of Borrower's
Partnership Agreement;
(e) receipt by Agent of (i) certificates of existence and
good standing for Borrower issued by the State of Delaware and
certificates of qualification and good standing for Borrower
issued by each of the states wherein any Eligible Project is
located and such qualification is required, and (ii) certificates
of existence and good standing for each Subpartnership which is a
party to any Collateral Document issued by the state of each such
Subpartnership's formation and the state in which the Eligible
Project owned by such Subpartnership is located;
(f) receipt by Agent of a certificate of an officer of
Borrower, certifying that there have been no amendments to
Borrower's certificate of partnership, partnership agreement or
other organizational documents since July 28, 1994, other than
such amendments as may be attached to such certificate and
certified as being true, correct and complete as of the date of
such certification (with any amendment to Borrower's certificate
of partnership being certified by the Secretary of State of the
State of Delaware);
(g) a certificate of the Secretary of CBL Properties, Inc.
dated as of the Effective Date certifying (A) that there have
been no amendment to the By-laws of CBL Properties, Inc., since
July 28, 1994, other than such amendments as may be attached to
such certificate and certified as being true, correct and
complete as of such certification; (B) that attached thereto is a
true and complete copy of Resolutions adopted by the Board of
Directors of CBL Properties, Inc., authorizing the execution and
delivery on behalf of Borrower of this Agreement and any other
documents executed in connection herewith to which Borrower is a
party, authorizing the execution and delivery on behalf of
Borrower as general partner of each Subpartnership of each of the
documents executed in connection herewith to which such
Subpartnership is a party, and authorizing the execution,
delivery and performance of each of the documents executed in
connection herewith to which CBL Properties, Inc. is a party; and
(C) as to the incumbency and genuineness of the signatures of the
officers of CBL Properties, Inc. executing any of the documents
executed in connection herewith to which CBL Properties, Inc.,
Borrower or any Subpartnership is a party;
(h) a certificate of the Secretary of CBL Properties, Inc.,
certifying that (i) there have been no amendments to the
Certificate of Incorporation of CBL Properties, Inc. since July
28, 1994, other than such amendments as may be attached to such
certificate and certified by the Secretary of State of Delaware
as of a date not earlier than fifteen (15) days prior to the
Effective Date, and (ii) there have been no amendments to the
certificates of partnership, partnership agreements or other
organizational documents of any Subpartnership which is a party
to any Collateral Document since July 28, 1994, other than such
amendments as may be attached to such certificate and certified
as being true, correct and complete as of the date of such
certification;
(i) good standing certificates for CBL Properties, Inc.,
each dated as of a date close to the Effective Date, issued by
the Secretaries of State of Delaware and of each state wherein
CBL Properties, Inc. is qualified to do business and where such
qualification is required;
(j) since June 30, 1996, there shall not have occurred any
material adverse change in the business, operations (including
the operation performance of any Eligible Project), condition
(financial or otherwise), assets, liabilities, properties or
prospects of Borrower, or any event, condition, or state of facts
which would be expected materially and adversely to affect the
prospects of Borrower subsequent to consummation of the
transactions contemplated by this Agreement, in each case, as
determined by Agent in its reasonable discretion;
(k) since June 30, 1996, there shall not have occurred any
material adverse change in the business, operations, condition
(financial or otherwise), assets, liabilities, properties or
prospects of any Eligible Project included or to be included in
the Borrowing Base, or any event, condition, or state of facts
which would be expected materially and adversely to affect the
prospects of any such Project subsequent to consummation of the
transactions contemplated by this Agreement, in each case, as
determined by Agent in its reasonable discretion;
(l) there shall exist no Default or Event of Default; and
(m) all of the representations and warranties made by
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership hereunder, under any of the Notes or under any of
the Collateral Documents shall be true and correct in all
material respects as of the Effective Date with the same force
and effect as if made on and as of such date.
This Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied
on or before September 26, 1996.
SECTION 4.2 ADVANCES. The obligation of Agent and each
Lender to make any Advance or to have any Letter of Credit issued
is subject to the satisfaction of the following conditions:
(a) receipt by Agent of a Notice of Borrowing as required
by Section 2.3, in the case of an Advance, or a request for a
Letter of Credit as required by Section 2.2, in the case of a
Letter of Credit, and a compliance certificate as described in
Section 6.1(c) hereof;
(b) the fact that the proposed use of proceeds of such
Advance set forth in the Notice of Borrowing or the proposed use
of such Letter of Credit set forth in such request for Letter of
Credit is consistent with the provisions of Section 6.10 and
Section 2.2, respectively;
(c) (i) in the case of the issuance of a Letter of Credit,
there shall exist no Default or Event of Default nor any event or
condition which, with the issuance of such Letter of Credit,
would constitute a Default or Event of Default or (ii) in the
case of the making of an Advance, there shall exist no (A) Event
of Default, (B) Default under Sections 7.1(a), 7.1(g) or 7.1(h)
hereof, or (C) other Default as to which Agent has given Borrower
notice nor any event or condition which, with the making of such
Advance, would constitute an Event of Default or any such
Default;
(d) all of the representations and warranties made by
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership hereunder, under any of the Notes or under any of
the Collateral Documents shall be true and correct in all
material respects as of the date of such Advance or the date of
such Letter of Credit with the same force and effect as if made
on and as of such date, except to the extent such representations
or warranties specifically relate to an earlier date and except
for changes therein occurring in the ordinary course of business
which do not otherwise constitute a Default or Event of Default
hereunder;
(e) all of the Collateral Documents for each Eligible
Project comprising the Borrowing Base shall be in full force and
effect and shall constitute a first priority perfected Lien on
and security interest in each such Project, subject only to
Permitted Liens.
Acceptance by Borrower of an Advance hereunder or the issuance of
a Letter of Credit shall be deemed to be a representation and
warranty by Borrower on the date of such Advance or such Letter
of Credit as to the facts specified in clauses (b), (c), (d) and
(e) of this Section 4.2.
SECTION 4.3 CONDITIONS PRECEDENT TO A PROJECT BECOMING AN
ELIGIBLE PROJECT. No Project shall become an Eligible Project
until Borrower shall have granted, or shall have caused any
Wholly Owned Subsidiary or Subpartnership owning such Project to
grant, to Agent, for the benefit of Lenders, as security for the
payment and performance of the Obligations of Borrower, a valid,
enforceable, perfected, first priority and (except for Permitted
Liens) only security interest and Lien in and to such Project and
all real and personal property relating thereto and, in
connection therewith, Borrower shall have executed and delivered,
or shall have caused any Wholly-Owned Subsidiary or
Subpartnership owning such Project to execute and deliver, to
Agent, in form and substance reasonably satisfactory to Agent,
the following instruments, documents and agreements in respect of
such Project:
(a) a Mortgage encumbering such Project in favor of the
Agent for the benefit of Lenders, such Mortgage to be
substantially in the form of Exhibit D attached hereto and
incorporated herein by reference, modified as appropriate to
conform to the laws of the jurisdiction in which the Project is
situate;
(b) an environmental indemnity agreement, substantially in
the form of Exhibit E attached hereto and incorporated herein by
reference;
(c) a closing certificate and affidavit, in substantially
the form of Exhibit F attached hereto and incorporated herein by
reference;
(d) if requested by the Agent or the Majority Lenders,
collateral assignments of operating agreements, reciprocal
easement agreements, management agreements and other agreements
requested by the Agent or the Majority Lenders, all in form and
substance reasonably satisfactory to the Agent and the Lenders;
(e) assurance from a title insurance company satisfactory
to the Agent (the "Title Company") that such Title Company is
committed to cause the Mortgage to be recorded and, upon recorda-
tion of the Mortgage, to issue its ALTA lender's title insurance
policies in a form reasonably acceptable to the Agent and in an
amount equal to the Borrowing Base to be attributable to the
Eligible Project described therein or such higher amount as may
be reasonably requested by the Agent, showing the Agent as the
"insured mortgagee" and insuring the validity and priority of the
Mortgage as a first priority Lien upon the Eligible Project and
Collateral described therein, subject to Permitted Liens;
(f) receipt by Agent of an opinion of outside counsel
reasonably acceptable to the Agent, addressed to Agent and each
Lender and satisfactory in form and substance to Agent covering
the legal matters addressed in Article 5 hereof and such
additional matters relating to the transactions contemplated
hereby as Agent may reasonably request;
(g) receipt by Agent of a Borrowing Base report certified
by the chief financial officer or the chief accounting officer of
Borrower, setting forth in reasonable detail the calculations
establishing the Borrowing Base;
(h) if such Eligible Project is owned by a Wholly Owned
Subsidiary of Borrower or Subpartnership of Borrower, a guaranty,
substantially in the form of Exhibit G hereto, by such Wholly
Owned Subsidiary or Subpartnerships of the obligations of
Borrower under this Agreement, duly executed and delivered by
such Wholly Owned Subsidiary or Subpartnership;
(i) if such Eligible Project is owned by a Wholly Owned
Subsidiary of Borrower, instruments, documents, certificates and
items in respect of such Wholly Owned Subsidiary as are
comparable to the instruments, documents, certificates and other
items described in subsections (g) through (i) of Section 4.1 in
respect of CBL Properties, Inc. and/or Borrower;
(j) if such Eligible Project is owned by a Subpartnership,
instruments, documents, certificates and items in respect of such
Subpartnership, as are comparable to the instruments, accounts,
certificates and other items described in subsections (d) through
(i) of Section 4.1 in respect of Borrower.
(k) receipt by Agent of all documents it may reasonably
request relating to the validity and enforceability of the Loan
Documents and the Collateral Documents (when executed and
delivered pursuant to this Agreement) and any other matters
relevant hereto, all in form and substance satisfactory to Agent;
(l) such other instruments, documents, agreements,
financing statements, certificates, opinions and other Collateral
Documents as the Agent or the Majority Lenders may reasonably
request.
Borrower shall perform, and shall cause the Wholly Owned
Subsidiaries and Subpartnerships to perform, any and all
reasonable steps requested by Agent to perfect, maintain and
protect Agent's Lien in the Projects and the Collateral pledged
to the Agent, including, without limitation, executing and filing
Mortgage Supplements, financing or continuation statements, or
amendments thereof, in form and substance satisfactory to Agent;
and delivering to Agent all documents, notes and other
instruments or chattel paper included in the Collateral, the
possession of which is necessary or appropriate to perfect
Agent's security interest therein. Agent may file one or more
financing statements disclosing Agent's Lien under the Collateral
Documents without Borrower's or any such Subsidiary's signature
appearing thereon and Borrower shall pay the costs of, or
incidental to, any recording or filing of any financing
statements concerning the Collateral.
SECTION 4.4 CONDITIONS TO CONVERSION TO TERM LOAN.
The right of Borrower to convert Loan into the Term Loan
under Section 2.12 is subject to the condition precedent that the
following conditions be satisfied in the judgment of Agent:
(a) timely receipt by Agent of the notice required under
such Section;
(b) immediately before and after such conversion, no Event
of Default shall have occurred and be continuing; and
(c) the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents shall be
true in all material respects on and as of the date of such
conversion except to the extent such representations or
warranties specifically relate to an earlier date or such
representations or warranties become untrue by reason of events
or conditions otherwise permitted hereunder and the other Loan
Documents.
The delivery of the notice required under such Section shall
constitute a certification by Borrower to Agent and Lenders that
the statements in the immediately preceding clauses (b) and (c)
are true.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Agent and each
Lender that:
SECTION 5.1 ORGANIZATION AND POWER. Borrower is a
limited partnership duly organized, validly existing and in good
standing under the laws of the State of Delaware, and has all
requisite partnership powers and all material governmental
certificates of authority, licenses, permits, qualifications,
documentation, consents and approvals required to own, lease and
operate its properties and to carry on its business as now
conducted. CBL Properties, Inc. is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, and has all requisite corporate powers and all
material governmental certificates of authority, licenses,
permits, qualifications, documentation, consents and approvals
required to own, lease and operate its properties and to carry on
its business as now conducted. Each of Borrower's Subsidiaries
is a limited partnership or a corporation duly organized, validly
existing and in good standing under the laws of its state of
formation, and has all requisite partnership powers and all
material governmental certificates of authority, licenses,
permits, qualifications, documentation, consents and approvals
required to own, lease and operate its properties and to carry on
its business as now conducted.
SECTION 5.2 VALIDITY OF LOAN INSTRUMENTS. The execution,
delivery and performance by Borrower of the Loan Documents and
the execution, delivery and performance by any Wholly Owned
Subsidiary of Borrower or by any Subpartnership of any Collateral
Documents to which such Wholly Owned Subsidiary or Subpartnership
is a party, when executed and delivered pursuant to the Original
Credit Agreement and/or this Agreement, (a) are within Borrower's
or such Subsidiary's or Subpartnership's powers, (b) have been
duly authorized by all necessary corporate, partnership or other
action, (c) require no action by or in respect of, or filing
with, any governmental body, agency or official and (d) do not
and will not contravene, or constitute a default under, any
Applicable Law or of the partnership agreement or other
organizational document of Borrower or such Subsidiary or
Subpartnership or of any agreement, judgment, injunction, order,
decree or other instrument binding upon Borrower or such
Subsidiary or Subpartnership or result in the creation or
imposition of any Lien on any asset of Borrower or such
Subsidiary or Subpartnership. The execution and delivery by CBL
Properties, Inc. on behalf of Borrower of the Loan Documents and
the Collateral Documents (when executed and delivered pursuant to
the Original Credit Agreement and/or this Agreement) are within
CBL Properties, Inc.'s corporate powers, have been duly
authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any governmental body,
agency or official and do not and will not contravene, or
constitute a default under, Applicable Law or of the Certificate
of Incorporation or by-laws of CBL Properties, Inc. or of any
agreement, judgment, injunction, order, decree or other
instrument binding upon CBL Properties, Inc. or result in the
creation or imposition of any Lien on any asset of CBL
Properties, Inc.
SECTION 5.3 BINDING EFFECT. This Agreement constitutes a
valid and binding agreement of Borrower and the other Loan
Documents (when executed and delivered in accordance with the
Original Credit Agreement and/or this Agreement) do and will
constitute valid and binding obligations of Borrower, enforceable
in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally. All Collateral
Documents, when executed and delivered in accordance with the
Original Credit Agreement and/or this Agreement, do and will
constitute valid and binding obligations of Borrower and/or the
Subsidiary or Subpartnership which is a party thereto enforceable
in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally.
SECTION 5.4 FINANCIAL INFORMATION.
(a) The balance sheet of Borrower as of June 30, 1996 and
the related statements of funds from operations, stockholders'
equity and cash flows for the fiscal year then ended, certified
by Borrower's Chief Financial Officer or Controller, and filed
with the Securities and Exchange Commission, copies of which have
been delivered to Agent, fairly present, in conformity with GAAP
(as modified by the rules and regulations of the Securities and
Exchange Commission and the New York Stock Exchange), the
financial position of Borrower as of such date and its results of
operations and cash flows for such fiscal year.
(b) Between June 30, 1996 and the Effective Date, there has
been no material adverse change in the business, properties,
financial position, results of operations or prospects of CBL
Properties, Inc., Borrower, the Subpartnerships or any of their
respective Subsidiaries, taken as a whole.
SECTION 5.5 LITIGATION. Except as set forth in Schedule
5.5 attached hereto, there are no actions, suits or proceedings
of a material nature pending or threatened in writing against or
affecting Borrower, CBL Properties, Inc., any of their respective
Subsidiaries or the Collateral before any court or arbitrator or
any governmental body, agency or official which (a) could have a
material adverse effect on the business, properties, financial
position, results of operations or prospects of Borrower, CBL
Properties, Inc. and their respective Subsidiaries other than a
material adverse effect which Borrower has fully disclosed to the
Agent unless the Agent notifies Borrower that Agent has
determined that such material adverse effect is likely to result
in a future Default or Event of Default under any covenant set
forth in Section 8 hereof; (b) could have a material adverse
effect on any Eligible Project; or (c) in any manner draw into
question the validity of any Loan Document or Collateral Document
or the priority of any Lien, Mortgage or security interest
created hereby or pursuant to the Collateral Documents; and,
subject to the provisions of Section 5.7 hereof, to the best
knowledge of Borrower, no event has occurred which will violate,
be in conflict with, result in the breach of or constitute (with
due notice or lapse of time, or both) a default of a material
nature under Applicable Law or result in the creation or
imposition of any Lien, charge or encumbrance of any nature
whatsoever on the Collateral.
SECTION 5.6 ERISA. Except as set forth on Schedule 5.6
hereof, neither Borrower nor any ERISA Affiliate maintains, or
participates in, and has not at any time maintained or
participated in, any ERISA Plan.
SECTION 5.7 HAZARDOUS SUBSTANCES. Borrower warrants,
represents and agrees as follows:
(a) Borrower has had performed reasonable
investigations, studies and tests as to any environmental
contamination, liabilities or problems with respect to the
Collateral, including without limitation, the storage,
disposal, presence, discharge or release of any Hazardous
Substances at or with respect to the Collateral, copies of
which have been provided to the Agent prior to the date
hereof, and, except as otherwise set forth in the Mortgages,
such investigations, studies, and tests have disclosed no
Hazardous Substances or possible violations of any
Environmental Laws.
(b) No personal or real property owned by Borrower or
any of its Subsidiaries is subject to any private or
governmental Lien, or to the best of Borrower's knowledge
judicial or administrative notice or action relating to
Hazardous Substances or environmental problems, impairments
or liabilities with respect to such property or the direct
or indirect violation of any Environmental Laws, in each
case which could have a material adverse effect on the
business, properties, financial position, results of
operations or prospects of Borrower, CBL Properties, Inc.
and their respective Subsidiaries other than a material
adverse effect which Borrower has fully disclosed to the
Agent unless the Agent notifies Borrower that Agent has
determined that such material adverse effect is likely to
result in a future Default or Event of Default under any
covenant set forth in Section 8 hereof;
(c) Except as disclosed in the Mortgages, no Hazardous
Substances are located on or have been stored, processed or
disposed of on or released or discharged from (including
ground water contamination) the Collateral and no above or
underground storage tanks exist on the Collateral. Borrower
shall not allow, and shall not permit its Subsidiaries to
allow, any Hazardous Substances to be stored, located,
discharged, possessed, managed, processed or otherwise
handled on any of their properties or the Collateral other
than small quantities which are utilized in the ordinary
course of business of such properties, and which are used
and disposed of in a lawful manner, and shall comply, and
cause said Subsidiaries to comply, with all Environmental
Laws affecting such properties or the Collateral.
(d) Borrower shall immediately notify Agent should
Borrower become aware of (i) the existence of any Hazardous
Substance in, on or beneath any of its properties or the
properties of its Subsidiaries in violation of any
Environmental Law, or any other violation of any
Environmental Law with respect to such properties, (ii) any
"release" or threatened "release" (as defined in CERCLA and
rules and regulations promulgated thereunder) of any
Hazardous Substances on or from the Collateral or any other
real property owned by Borrower or any of its Subsidiaries,
or (iii) any Lien, action, or notice of the nature described
in subparagraph (b) above, in each case which could have a
material adverse effect on the business, properties,
financial position, results of operations or prospects of
Borrower, CBL Properties, Inc. and their respective
Subsidiaries other than a material adverse effect which
Borrower has fully disclosed to the Agent unless the Agent
notifies Borrower that Agent has determined that such
material adverse effect is likely to result in a future
Default or Event of Default under any covenant set forth in
Section 8 hereof. Upon the occurrence of any such event,
Borrower shall, and shall cause its Subsidiaries, at its or
such Subsidiary's own cost and expense, take all actions as
shall be necessary or advisable for the clean-up of any such
property including all removal, containment and remedial
actions to the extent required by applicable Environmental
Laws, and shall further pay or cause to be paid at no
expense to Agent and other Lenders all clean-up,
administrative, and enforcement costs of applicable
government agencies asserted against such property or the
owner thereof. All costs, including, without limitation,
those costs set forth above, damages, liabilities, losses,
claims, expenses (including reasonable attorneys' fees
actually incurred and disbursements) which are incurred by
Agent (except to the extent resulting from the gross
negligence or willful misconduct of Agent), without
requirement of waiting for the ultimate outcome of any other
proceeding, shall be paid by Borrower to Agent as incurred
within ten (10) days after notice from Agent itemizing the
amounts incurred to the date of such notice.
(e) Upon reasonable prior notice to Borrower, and
subject to the rights of tenants, Agent or its
representatives may from time to time (whether before or
after the commencement of a nonjudicial or judicial
proceeding) enter and inspect Collateral for the purpose of
determining the existence, location, nature and magnitude of
any past or present release or threatened release of any
Hazardous Substance into, onto, beneath or from such
properties. Except in cases of emergency, any such
inspection shall be conducted in a manner which does not
unreasonably interfere with the operation of the Collateral.
All warranties and representations contained in this Section
5.7 shall be deemed to be continuing and shall remain true and
correct in all material respects until the Indebtedness has been
paid in full and any limitations period expires. Notwithstanding
anything to the contrary contained herein or in any of the other
Loan Documents, Borrower's agreements and Borrower's
indemnification of Lenders contained in this Section 5.7 shall
survive the exercise of any remedy by Agent under any of the
Collateral Documents, including foreclosure (or deed in lieu
thereof), even if, as a part of such foreclosure or deed in lieu
of foreclosure, the Indebtedness is satisfied in full, but only
with respect to liability or costs arising as a result of events
occurring prior to the date upon which Borrower and its
Subsidiaries, are divested of title to the Collateral whether
voluntarily, involuntarily or by operation of law.
SECTION 5.8 TAXES AND OTHER PAYMENTS. As of the date
hereof, no United States federal income tax returns of the
"affiliated group" (as defined in the Internal Revenue Code) of
which Borrower is a member have been examined and closed. To the
best of Borrower's knowledge, each member of such affiliated
group, including Borrower, have filed all federal, state, county,
municipal and city income and other tax returns required to have
been filed by it and has paid all taxes which have become due
pursuant to such returns or pursuant to any assessments received
by it, and each member, including Borrower, does not know of any
basis for any material additional assessment in respect of any
such taxes. Borrower has paid or will pay (or has caused to be
paid or will be caused to be paid) in full (except for such
retainages as may be permitted or required by any Legal
Requirement to be withheld pending completion of any
improvements) all sums by Borrower or its Affiliates owing or
claimed from Borrower or such Affiliates for labor, material,
supplies, personal property (whether or not forming a fixture
hereunder) and services of every kind and character used,
furnished or installed in or on the Collateral and no claim for
same exists or will be permitted to be created; provided,
however, that Borrower may contest such amounts in good faith by
appropriate proceedings so long as Borrower provides Agent
adequate security therefor.
SECTION 5.9 NOT AN INVESTMENT COMPANY. Neither Borrower,
any of its Subsidiaries nor CBL Properties, Inc. is an
"investment company" within the meaning of the Investment Company
Act of 1940, as amended.
SECTION 5.10 INFORMATION. All information, reports,
papers and data given to Agent with respect to CBL Properties,
Inc., Borrower, their respective Subsidiaries or others obligated
under the terms of the Original Credit Agreement, this Agreement,
the other Loan Documents or the Collateral Documents are, or at
the time of delivery will be, when taken as a whole, accurate,
complete and correct in all material respects and do not, or will
not, omit any fact, the inclusion of which is necessary to
prevent the facts contained therein from being materially
misleading; all financial data have been, or when delivered will
have been, prepared in accordance with GAAP consistently applied
and fully and accurately present, or will present, in all
material respects, the financial condition of the subjects
thereof as of the dates thereof; and with respect to the
financial data heretofore furnished, no material adverse change
has occurred in the financial conditions reflected therein since
the dates thereof other than a material adverse change which
Borrower has fully disclosed to the Agent unless the Agent
notifies Borrower that Agent has determined that such material
adverse effect is likely to result in a future Default or Event
of Default under any covenant set forth in Section 8 hereof.
SECTION 5.11 INSURANCE. Schedule 5.11 sets forth a true
and correct description of the insurance coverage maintained by
or on behalf of Borrower and its Subsidiaries currently in
effect.
SECTION 5.12 LIENS. The liens and security interests
granted to Agent pursuant to the Collateral Documents (when
executed and delivered to Agent pursuant to the Original Credit
Agreement and/or this Agreement) are valid and enforceable first
priority liens and security interests subject only to Permitted
Liens.
SECTION 5.13 TITLE TO THE PROJECTS. Borrower or a Wholly
Owned Subsidiary of Borrower or a Subpartnership holds full legal
and equitable title to the Eligible Projects subject only to
Liens permitted by Section 6.17 hereof.
SECTION 5.14 GOVERNMENTAL REQUIREMENTS. To the best
knowledge of Borrower, no violation of any material governmental
requirement exists with respect to the Eligible Projects, and the
use or anticipated use thereof complies with applicable zoning
ordinances, regulations and restrictive covenants affecting such
Projects, and all governmental requirements for such use have
been satisfied, except where such violation or noncompliance
could not (a) have a material adverse effect on the business,
properties, financial position, results of operations or
prospects of Borrower, CBL Properties, Inc. and their respective
Subsidiaries other than a material adverse effect which Borrower
has fully disclosed to the Agent unless the Agent notifies
Borrower that Agent has determined that such material adverse
effect is likely to result in a future Default or Event of
Default under any covenant set forth in Section 8 hereof; (b)
have a material adverse effect on any Eligible Project; or (c) in
any manner draw into question the validity of any Loan Document
or Collateral Document or the priority of any Lien, Mortgage or
security interest created hereby or pursuant to the Collateral
Documents.
SECTION 5.15 ERISA; PLAN ASSETS. Borrower is a not an
"employee benefit plan" as defined in Section 3(3) of ERISA and
the assets of Borrower do not constitute "plan assets" within the
meaning of 29 C.F.R.2510.3-101. The execution, delivery and
performance of this Agreement, and the borrowing and repayment
of amounts thereunder, do not and will not constitute on the part
of Borrower "prohibited transactions" under ERISA or the Internal
Revenue Code.
ARTICLE 6.
COVENANTS
Borrower agrees that, so long as Lenders have any Commitment
hereunder, any of the Obligations remain unpaid or any Letter of
Credit remains outstanding, unless the Majority Lenders otherwise
agree in writing:
SECTION 6.1 REPORTING REQUIREMENTS. Borrower shall
deliver to Agent (with copies for each Lender):
(a) as soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
Borrower, Combined audited annual financial statements of
Borrower and CBL Properties, Inc., for such fiscal year,
consisting of Combined balance sheet of the end of such fiscal
year and the related Combined statements of income and retained
earnings and Combined statements of cash flows for such fiscal
year, setting forth in each case in comparative form the figures
for the previous fiscal year, and accompanied by the materially
unqualified opinion of Arthur Anderson & Co. or any other
nationally recognized firm of independent certified public
accountants regularly retained by Borrower and acceptable to the
Majority Lenders;
(b) as soon as available and in any event within sixty (60)
days after the end of each fiscal quarter of Borrower, Combined
interim unaudited financial statements of Borrower and CBL
Properties, Inc., including Combined balance sheets, Combined
statements of income and retained earnings and Combined
statements of cash flow, for the quarter and year-to-date period
then ended, prepared in accordance with GAAP, setting forth in
comparative form the figures for the corresponding quarter and
the corresponding portion of Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) by the chief
financial officer or the chief accounting officer of Borrower;
(c) simultaneously with the delivery the financial
statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer or the chief
accounting officer of Borrower (i) setting forth in reasonable
detail the calculations required to establish whether Borrower
was in compliance with the requirements of Sections 6.8, 6.11
through 6.15 and 6.18 on the date of such financial statements,
(ii) stating whether, to the actual knowledge of such officer,
any Default or Event of Default exists on the date of such
certificate and, if any Default or Event of Default then exists,
setting forth the details thereof and the action which Borrower
is taking or proposes to take with respect thereto, and (iii)
setting forth a schedule of all Contingent Obligations of
Borrower as of the date of such financial statements;
(d) as soon as available and in any event within forty five
(45) days after the end of each fiscal quarter of Borrower, a
Borrowing Base report, certified by the chief financial officer
or the chief accounting officer of Borrower, setting forth in
reasonable detail the calculations required to establish the
Borrowing Base for each Eligible Project and the Borrowing Base
for all Eligible Projects as of the last day of such quarter, all
in reasonable detail and satisfactory to Agent; provided,
however, that any change in the Borrowing Base reflected in such
Borrowing Base report shall not become effective until Agent
notifies Borrower in writing of Agent's approval of such
Borrowing Base report. Agent shall use its reasonable efforts to
notify Borrower of its approval or non-approval of the Borrowing
Base report within ten (10) business days after Agent's receipt
of the Borrowing Base report, together with a statement, in
reasonable detail, of the reasons for any non-approval of such
report;
(e) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements (i) whether anything has come to their attention
in the normal course of their audit to cause them to believe that
any Default or Event of Default existed on the date of such
statements and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant
to clause (c) above;
(f) simultaneously with the delivery of each set of
financial statements referred to in clause (b) above, a
certificate of the chief financial officer or the chief
accounting officer of Borrower, certifying as to each Reserved
Construction Loan: (i) that, to the actual knowledge of such
officer, no monetary or material non-monetary default or event of
default exists thereunder; (ii) the amount currently available in
the interest reserve available for the payment of interest on
such Reserved Construction Loan; (iii) an updated cash flow
projections for the project being constructed with the proceeds
of such Reserved Construction Loan, setting forth the assumptions
on which such projections are based; (iv) the outstanding
principal balance of such Reserved Construction Loan; (v) the
undisbursed amount of such Reserved Construction Loan (other than
such interest reserve); and (vi) such other matters as the Agent
or the Majority Lenders may reasonably request;
(g) as soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
Borrower, all financial information of Borrower, CBL Properties,
Inc., CBL Management Inc., and the Eligible Projects as Agent
shall reasonably request and as shall be reasonably available to
Borrower, CBL Properties, Inc. or CBL Management, Inc.;
(h) within forty five (45) days after the end of each
fiscal quarter, operating statements for each Eligible Project
for such quarter and for the year-to-date period then ended,
together with a rent roll, lease expiration report (unless
included in the rent roll) and leasing status report for each
Eligible Project;
(i) promptly after obtaining actual knowledge of any
Default or Event of Default, a certificate of the controller or
senior vice-president in accounting of Borrower setting forth the
details thereof and the action which Borrower is taking or
proposes to take with respect thereto;
(j) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and
reports on Forms 10-K, 10-Q and 8-K (or their equivalents) which
CBL Properties, Inc., Borrower or any of their respective
Affiliates shall have filed with the Securities and Exchange
Commission;
(k) promptly upon the consummation thereof, a description
in reasonable detail of any acquisition of assets in excess of
$35,000,000.00 in a single transaction or related series of
transactions;
(l) promptly upon obtaining actual knowledge thereof, a
description in reasonable detail of any event or condition which
could materially adversely affect the business, properties,
financial position, results of operations or prospects of
Borrower or which in any material manner draws into question the
validity of any Loan Document;
(m) from time to time such additional information regarding
the financial position or business of Borrower, its Affiliates or
any Project as Agent may reasonably request, to the extent such
information is reasonably available to Borrower;
(n) concurrently with, subject to the requirements of the
Securities and Exchange Commission or any securities exchange on
which CBL Properties, Inc.'s securities are traded, issuance to
analysts and the media (after notification of the New York Stock
Exchange and release to an established wire service recognized as
an official disclosure source) of any press release concerning
Borrower, telecopy notice of such press release and the contents
thereof.
SECTION 6.2 PAYMENT AND PERFORMANCE. Borrower shall pay
and discharge, and shall cause each of its Subsidiaries to pay
and discharge, at or before maturity, subject to any applicable
notice and grace periods, all material obligations and
liabilities, including, without limitation, tax liabilities,
except where the same may be contested in good faith by
appropriate proceedings, and will maintain, in accordance with
GAAP, appropriate reserves for the accrual of any of the same;
and shall pay the Indebtedness, as and when called for in this
Agreement, and on or before the due dates thereof, subject to any
applicable notice and grace periods, and will perform all of the
Obligations in full and on or before the dates same are to be
performed subject to any applicable notice and grace periods.
SECTION 6.3 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Borrower shall keep, or cause to be kept, all
Collateral in good working order and condition, ordinary wear and
tear and insured casualty losses excepted.
(b) Borrower shall obtain and maintain, or cause to be
obtained and maintained, insurance upon and relating to the
Collateral, insuring against personal injury and death, loss by
fire and such other hazards, casualties and contingencies
(including business interruption insurance covering loss of rents
for a period of twelve [12] months and builder's all risk
coverage) as are normally and usually covered by extended
coverage policies in effect where the Collateral is located and
such other risks as may be reasonably specified by Agent, from
time to time, all in such amounts and with such insurers of
recognized responsibility as are reasonably acceptable to Agent.
Each insurance policy covering the Collateral issued in
connection therewith shall provide by way of endorsements, riders
or otherwise that (a) proceeds will be payable to Agent as its
interest may appear, it being agreed by Borrower and Agent that
such payments, less Agent's expenses in collecting such insurance
proceeds, shall be applied, to the restoration, repair or
replacement of the Collateral to the extent provided for in the
Collateral Documents encumbering such Collateral, provided,
however, notwithstanding anything to the contrary contained
herein or in the Collateral Documents, so long as no Default or
Event of Default is then in existence, Borrower may instruct
Agent to apply all or any portion of casualty insurance proceeds
held by Agent in connection with damage to an Eligible Project to
prepayment of the Loan. In the event Borrower so instructs Agent
to apply insurance proceeds to the prepayment of the Loan, the
Borrowing Base shall be reduced by the amount of insurance
proceeds so applied; provided however, that notwithstanding such
reduction in the Borrowing Base, Borrower may reborrow, in
accordance with the terms hereof, an amount not greater than the
amount of such proceeds so applied to prepayment of the Loan, so
long as the amount so reborrowed is used for the restoration of
the Eligible Project giving rise to such proceeds in the manner
required under the Collateral Documents, and upon full
restoration, the Borrowing Base shall be increased by an amount
equal to the prior reduction.
SECTION 6.4 BUSINESS; EXISTENCE. Neither Borrower nor
any of its wholly Owned Subsidiaries nor any Subpartnership shall
engage to any substantial extent in any line or lines of business
other than the businesses of owing, managing, leasing and
operating regional malls and retail strip shopping centers and
other related businesses to the extent incidental to the conduct
of any of the foregoing businesses. Except as otherwise
expressly permitted by the terms of this Agreement, Borrower
shall, and shall cause each of its Wholly Owned Subsidiaries and
each Subpartnership to, preserve and keep in full force and
effect its existence, rights, franchises and trade names.
SECTION 6.5 PAYMENT OF IMPOSITIONS. Borrower shall duly
pay and discharge, or cause to be paid and discharged, all
Impositions not later than the due date thereof, or the day prior
to the day any fine, penalty, interest or cost may be added
thereto or imposed, or the day prior to the day any Lien may be
filed, for the nonpayment thereof (if such day is used to
determine the due date of the respective item); provided,
however, that Borrower may, if, to the extent and in the manner
permitted by law, (a) pay the Impositions in installments,
whether or not interest shall accrue on the unpaid balance of
such Impositions, if such installment payment would not create or
permit the filing of a Lien against the Collateral, and (b)
contest the payment of any Impositions in good faith and by
appropriate proceedings provided that: (i) any such contests
shall be prosecuted diligently and in a manner not prejudicial to
the rights, liens and security interests of Agent, (ii) Borrower
shall deposit funds with Agent or obtain a bond in form and
substance and with an issuing company reasonably satisfactory to
Agent in an amount sufficient to cover any amounts which may be
owing in the event the contest may be unsuccessful (Borrower
agreeing to make such deposit or obtain such bond, as the case
may be, within five (5) days after demand therefor and that, if
made by payment of funds to Agent, the amount so deposited shall
be disbursed in accordance with the resolution of the contest
either to Borrower or the adverse claimant), (iii) no contest may
be conducted and no payment may be delayed beyond the date on
which the Collateral could be sold for nonpayment (provided
however, that such contest may be continued beyond such date so
long as Borrower provides assurances, by bond, payment or
otherwise, that the Collateral will not be so sold) and (iv)
Agent may pay over to the taxing authority entitled thereto any
or all of the funds at any time when, in the opinion of Agent's
counsel, the entitlement of such authority to such funds is
established and no reasonable avenues for contesting such
entitlement are available to Borrower. Subject to Borrower's
right to contest as provided for herein, Borrower shall submit to
Agent copies of tax statements and paid tax receipts evidencing
the due and punctual payment of all real estate and personal
property taxes, charges and assessments levied upon or assessed
or charged against the Collateral on or before thirty (30) days
of the delinquent date of any such taxes.
SECTION 6.6 COMPLIANCE WITH LEGAL REQUIREMENTS. Borrower
shall, and shall cause each Wholly Owned Subsidiary or
Subpartnership owing any of the Collateral to, promptly and
faithfully comply with, conform to and obey all present and
future material Legal Requirements, whether or not same shall
necessitate structural changes in, improvements to, or interfere
with the use or enjoyment of the Collateral; provided, however,
that Borrower may contest a Legal Requirement in good faith by
appropriate proceedings; provided further, that with respect to
Legal Requirements affecting any portion of the Collateral (or
any other property of Borrower) which is leased to a financially
capable tenant, if such Lease provides that compliance with such
Legal Requirement is the obligation of the tenant thereunder,
Borrower shall be deemed to comply with its obligations under
this Agreement with respect to such Legal Requirement if Borrower
is continuing to exercise in good faith any remedies it may have
under said Lease to compel such tenant to comply with such Legal
Requirement.
SECTION 6.7 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
Borrower will keep, and will cause each Subsidiary to keep,
proper books of record and account in which full, true and
correct entries shall be made of all dealings and transactions in
relation to its business and activities; and will permit, and
will cause each Subsidiary to permit, representatives of Agent to
visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records
and to discuss their respective affairs, finances and accounts
with their respective officers, employees and independent public
accountants, all at such reasonable times and as often as may
reasonably be desired.
SECTION 6.8 INDEBTEDNESS. Borrower shall not 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) in an aggregate principal amount in excess of
twenty-five percent (25%) of Gross Asset Value 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 in respect of the
principal amount of such Indebtedness in excess of twenty-five
percent (25%) of Gross Asset Value (including base rate,
applicable margin and reserve and similar costs) from increasing
above ten percent (10%) per annum.
SECTION 6.9 CONSOLIDATIONS, MERGERS AND SALES OF ASSETS.
Borrower shall not and shall not permit its Subsidiaries to, (i)
consolidate or merge with or into any other Person (other than
Borrower or another Subsidiary) (ii) sell, lease or otherwise
transfer, directly or indirectly, any of its real estate
properties or investments in ventures holding such properties to
any other Person, other than in the ordinary course of business.
SECTION 6.10 USE OF PROCEEDS. The proceeds of the
Advances made under this Agreement shall be used by Borrower (a)
for the payment of pre-development and development costs incurred
in connection with the Projects or proposed Projects; (b) to
finance acquisitions and loans permitted by Section 6.11 hereof;
(c) to pay Indebtedness of Borrower and its Subsidiaries; (d) to
make equity Investments permitted hereunder (e) to provide for
the general working capital needs of Borrower and its
Subsidiaries; and (f) to make dividend payments; provided,
however, that (i) proceeds of Advances may not be used to make
dividend payments (A) more than twice during any calendar year;
or (B) in respect of two (2) consecutive fiscal quarters of
Borrower. No portion of the proceeds of any Advance may be used
by Borrower in any manner which would cause such Loan or the
application of the proceeds thereof to violate any of Regulations
G, T, U or X of the Board of Governor of the Federal Reserve
System.
SECTION 6.11 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 to exceed the following percentages
of Borrower's Gross Asset Value:
(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 development of a Project has commenced; (C) land
subject to a binding contract of sale under which the
Borrower or one of its Subsidiaries is the seller, the buyer
is not an Affiliate of Borrower and (D) out-parcels held for
lease or sale) exceeds ten percent (10%) of Gross Asset
Value;
(ii) developed real estate used primarily for non-retail
purposes, such that the aggregate book value of such real estate
(other than the real estate located at 6148 Lee Highway,
Chattanooga, Tennessee) exceeds ten percent (10%) of Gross
Asset Value;
(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 Gross Asset Value;
(iv) Mortgages, such that the aggregate principal
amount secured by Mortgages acquired by Borrower after the
Effective Date exceeds ten percent (10%) of Gross Asset
Value;
(v) Investments made after the date hereof in
partnerships, joint ventures and other non-corporate Persons
accounted using the equity basis of accounting (determined
in accordance with GAAP), such that the aggregate
outstanding amount of such Investments (other than
Investments in (A) partnerships in which (I) Borrower is the
sole general partner and the only limited partners are
either (a) the Person from whom the real estate owned by
such Partnership was purchased, and such Person's successors
and assigns or (b) a Person operating stores which anchor
the development constructed or to be constructed by such
partnership or (II) Borrower owns not less than ninety
percent (90%) of the partnership interests and has the
unilateral right to make all operational and strategic
decisions, or (B) partnerships, joint ventures and other
non-corporate Persons whose financial reports are prepared
on a consolidated basis with Borrower) exceeds fifteen
percent (15%) of Gross Asset Value;
(vi) items described in subsections (i), (ii), (iii)
and (v) of this Section 6.11(a), such that the aggregate
value thereof, determined in accordance with such
subsections, exceeds thirty percent (30%) of Gross Asset
Value.
(c) Neither Borrower nor any of its Subsidiaries shall
acquire the business of or 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; and
SECTION 6.12 TOTAL OBLIGATIONS TO GROSS ASSET VALUE. Borrower
shall not at any time permit the ratio of (a) Total Obligations to
(b) Gross Asset Value to exceed 0.55 to 1.00.
SECTION 6.13 MINIMUM NET WORTH. Borrower shall not permit
Net Worth at any time to be less than an amount equal to
$315,330,052 plus fifty percent (50%) 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 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.
SECTION 6.14 INTEREST COVERAGE RATIO. Borrower shall not
permit, as of the last day of any fiscal quarter, the Interest
Coverage Ratio to be less than 2.0 to 1.0.
SECTION 6.15 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 1.0.
SECTION 6.16 ERISA. Borrower will operate, or will cause
its ERISA Affiliates to operate, each ERISA Plan described on
Schedule 5.6, and each ERISA Plan that either Borrower or its
ERISA Affiliates may adopt, sponsor or participate in after the
Effective Date, in accordance with the terms of such ERISA Plan
and in accordance with all applicable requirements of ERISA and
the Internal Revenue Code.
SECTION 6.17 LIENS. Borrower shall not create, assume or
suffer to exist and shall not permit any Subsidiary to create,
assume or suffer to exist, any Lien securing Indebtedness on any
of the Collateral, except for (a) Permitted Liens; and (b) Liens
to secure Indebtedness incurred for common area maintenance,
improvements and leasing costs provided that: (i) such Lien is
expressly subordinate, on terms and conditions satisfactory to
the Agent and the Majority Lenders, to the Lien created by the
Collateral Documents; (ii) the principal amount of such
Indebtedness, and all interest thereon, can be repaid from common
area maintenance charges or from additional rental charges (not a
part of a rent for such Project used most recently to determine
the Appraised Value of such Project) specifically dedicated to
the repayment of such Indebtedness; and (iii) in the case of
leasing costs, such Indebtedness does not exceed, in respect of
any single Project, $3,000,000 in aggregate principal amount at
any one time outstanding.
SECTION 6.18 RESTRICTED PAYMENTS.
(a) Borrower shall not directly or indirectly declare or
make, or incur any liability to make, any cash or other
distributions on, or in respect of, any partnership interest in
Borrower, or other payments or transfers made in respect of the
redemption, repurchase or acquisition of such partnership
interests, except for distributions in an aggregate amount not to
exceed during any fiscal year ninety-five percent (95%) of Funds
from Operations for such fiscal year.
(b) Borrower shall not enter into any transaction with, or
pay any management or other fees to, any Affiliate, except, so
long as Borrower effectively receives at least 99% of the
economic benefit thereof, management or other fees payable to CBL
Management, Inc.
ARTICLE 7.
DEFAULTS
SECTION 7.1 EVENTS OF DEFAULT. It shall be an event of
default ("Event of Default") if one or more of the following
events shall have occurred and be continuing:
(a) Borrower shall fail, refuse or neglect to pay, in full,
any installment or portion of the Obligations as and when the
same shall become due and payable, whether at the due date
thereof stipulated in this Agreement or the Notes, or at a date
fixed for prepayment, or by acceleration or otherwise, and such
failure, refusal or neglect continues for a period of fifteen
(15) days after notice thereof from Agent; provided, however,
that Agent shall not be required to give such notice more than
twice during any twelve consecutive month period; provided,
further, that if such installment or portion of the Obligations
becomes due and payable as a result of Agent's accelerating the
maturity of the Obligations in accordance with the this
Agreement, neither any requirement of notice nor the fifteen (15)
day grace/cure period for payment set forth in this Section
7.1(a) shall apply to the accelerated due date;
(b) Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in
Sections 6.8, 6.11, 6.12, 6.13, 6.14, 6.15, 6.17 or 6.18 hereof
and such failure shall continue for ninety (90) days after the
earlier of (i) the date any Senior Officer of Borrower has actual
knowledge of such failure or (ii) the date written notice of such
failure has been given to Borrower by Agent;
(c) Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in this
Agreement (other than those covered by clause (a) or (b) above)
for thirty (30) days after written notice thereof has been given
to Borrower by Agent; provided; however, that is such failure is
curable but requires work to be performed, acts to be done or
conditions to be remedied which, by their nature, cannot be
performed, done or remedied, as the case may be, within such
thirty (30) day period, no Event Default shall be deemed to have
occurred if Borrower or its Subsidiaries commence same within
such thirty (30) day period and continuously prosecute the same
to completion within ninety (90) days after such notice.
(d) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall fail to observe or perform any covenant or
agreement contained in any of the Collateral Documents, or there
occurs any other default under any of the Collateral Documents,
and such failure or default shall continue beyond any applicable
grace or cure period;
(e) any representation, warranty or statement made by
Borrower, CBL Properties, Inc. or any of their Subsidiaries in,
under or pursuant to this Loan Documents or the Collateral
Documents or any affidavit or other instrument executed in
connection with the Loan Documents or Collateral Documents shall
be false or misleading in any material respect as of the date
hereof or shall become so at any time prior to the repayment in
full of the Obligation and, except in the case of fraud, such
breach is not cured with 30 days after the earlier of (i) the
date any Senior Officer of Borrower or CBL Properties, Inc. has
actual knowledge of such breach or (ii) the date written notice
of such breach is given to Borrower by Agent;
(f) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall default in the payment when due of any
Indebtedness under any Guarantee, note, indenture or other
agreement relating to or evidencing Indebtedness (other than
Indebtedness which is fully non-recourse as to Borrower, CBL
Properties, Inc. or such Subsidiary and which has a principal
balance of less than any amount equal to $10,000,000.00 less the
outstanding amount of Permitted Deficiencies), or any event
specified in any Guarantee, note, indenture or other agreement
relating to or evidencing any such Indebtedness shall occur if
the effect of such event is to cause or to permit (giving effect
to any grace or cure period applicable thereto) the holder or
holders of such Indebtedness to cause such Indebtedness to become
due, or to be prepaid in full (whether by redemption, purchase or
otherwise), prior to its stated maturity;
(g) Borrower, CBL Properties, Inc. or any of their
Significant Subsidiaries shall (1) voluntarily be adjudicated as
bankrupt or insolvent, (2) file any petition or commence any case
or proceeding under any provision or chapter of the Federal
Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (3) make a general assignment for the benefit of
its or his creditors, (4) have an order for relief entered under
the Federal Bankruptcy Code with respect to it or him, (5)
convene a meeting of its or his creditors, or any class thereof,
for the purpose of effecting a moratorium upon or extension or
composition of its or his debts, (6) admit in writing that it or
he is generally not able to pay its or his debts as they mature
or generally not pay its or his debts as they mature, or (7)
become insolvent;
(h) (1) a petition is filed or any case or proceeding
described in Section 7.1(g) above is commenced against Borrower,
CBL Properties, Inc. or any of their Significant Subsidiaries, or
against the assets of any such persons or entities and either an
order for relief is granted or such petition and the case or
proceeding initiated thereby is not dismissed within ninety (90)
days from the date of the filing, (2) an answer is filed by
Borrower, CBL Properties, Inc. or any of their Significant
Subsidiaries, admitting the allegations of any such petition, or
(3) a court of competent jurisdiction enters an order, judgment
or decree appointing, without the consent of Borrower, CBL
Properties, Inc. or any of their Significant Subsidiaries, a
custodian, trustee, agent or receiver for it or him, or for all
or any part of its or his property, or authorizing the taking
possession by a custodian, trustee, agent or receiver of it or
him, or all or any part of its or his property unless such
appointment is vacated or dismissed or such possession is
terminated within ninety (90) days from the date of such
appointment or commencement of such possession, but not later
than five (5) days before the proposed sale of any assets of
Borrower, CBL Properties, Inc. or such Significant Subsidiary, by
such custodian, trustee, agent or receiver, other than in the
ordinary course of the business of Borrower, CBL Properties, Inc.
or such Subsidiary;
(i) one or more judgments or orders for the payment of
money in excess of an amount equal to $10,000,000 less the
outstanding amount of Permitted Deficiencies shall be rendered
against Borrower, CBL Properties, Inc. or any of their
Significant Subsidiaries and such judgment(s) or order(s) shall
continue unbonded, unsatisfied and unstayed for a period of sixty
(60) days;
(j) the failure of Charles B. Lebovitz to remain active in
the management of Borrower, CBL Properties, Inc. and CBL
Management, Inc.; provided, however, that in the event of the
death or incapacity of Charles B. Lebovitz, no Default or Event
of Default shall arise solely by virtue of this clause (j) if
either (i) Borrower, CBL Properties, Inc. and CBL Management,
Inc. shall have each retained, within 180 days of the date of the
death or incapacity of Charles B. Lebovitz, senior management
having, in the reasonable opinion of the Agent and the Majority
Lenders, sufficient skill and experience in Borrower's industry
to manage Borrower competently and efficiently; or (ii) at least
two of James L. Wolford, John N. Foy, Jay Wiston and/or Stephen
Lebovitz remain active as Senior Officers of Borrower, CBL
Properties, Inc. and CBL Management, Inc.
(k) (1) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall die, dissolve, terminate or liquidate, or
merge with or be consolidated into any other entity (except as
permitted by Section 6.9 hereof), or shall hypothecate, pledge,
mortgage or otherwise encumber all or any part of the beneficial
ownership interest in Borrower or shall attempt to do any of the
same; or (2) Borrower or any of its Subsidiaries shall amend or
modify, in a manner which would adversely affect Agent or the
Lenders, its articles of incorporation, bylaws, articles of
partnership, certificate of partnership or other charter or
enabling documents, and Majority Lenders have not given its prior
written consent to such amendments or modifications;
(l) the failure of Charles B. Lebovitz, James L. Wolford,
John N. Foy, Jay Wiston, Ben S. Landress and/or Stephen Lebovitz
to own, directly or through CBL & Associates, Inc., beneficially
and of record, at least twenty percent (20%) of the shares of
equity of Borrower and CBL Properties, Inc., on a Combined basis
(without giving effect to the issuance after the date hereof of
stock of CBL Properties, Inc. at a price equal to the fair market
value of such stock on the date of such issuance); the failure of
CBL Properties, Inc. to be the sole general partner of Borrower;
or the failure of Charles B. Lebovitz, James L. Wolford, John N.
Foy, Jay Wiston, Ben S. Landress and/or Stephen Lebovitz to
collectively own, beneficially and of record, with power to vote,
an aggregate amount of at least fifty one percent (51%) of the
shares of voting stock of CBL Management, Inc., unless such
failure is the result of the merger of CBL Management, Inc. with
and into Borrower or CBL Properties, Inc., with Borrower or CBL
Properties, Inc. as the surviving Person; provided, however, that
Charles B. Lebovitz, James L. Wolford, John N. Foy, Jay Wiston,
Ben S. Landress and Stephen Lebovitz shall be deemed to own any
equity interest so long as the same is owned by (i) such Person,
(ii) a Subsidiary of such Person, (iii) a trust or similar
entities in which such Person and members of such Person's
family, including spouses, children, parents, siblings and their
descendants, are the sole beneficiaries of all of the interest
therein;
(m) Borrower or any of its Subsidiaries shall fail to
maintain the insurance coverage described in Schedule 5.11 as
being maintained by it at the date of this Agreement or any
insurer listed as providing any of such insurance coverage shall
cease to have an A.M Best policyholders rating of at least A-IX
(with respect to liability) or A-XII (with respect to property
damage); provided that it shall not constitute an Event of
Default hereunder if Borrower shall establish deductibles with
respect to any such listed insurance not exceeding $50,000.00 per
occurrence; or
(n) the assets of Borrower, CBL Properties, Inc. or any of
their Subsidiaries at any time constitute assets, within the
meaning of ERISA, the Internal Revenue Code and the respective
regulations promulgated thereunder, of any ERISA Plan or Non-ERISA Plan.
(o) CBL Properties, Inc. shall (i) fail to have the shares
of its Capital Stock listed for trading on the New York Stock
Exchange or the American Stock Exchange, or the respective
successors thereto; (ii) fail to remain qualified as a REIT under
the Internal Revenue Code; or (iii) amend or modify its
Certificate of Incorporation in a manner which would adversely
affect Agent or the Lenders except (A) with the prior written
consent of the Majority Lenders; (B) to the extent required in
order to remain qualified as a real estate investment trust under
the Internal Revenue Code; or (C) to the extent required by
Applicable Law.
(p) Borrower shall cease to represent at least ninety
percent (90%) of the book value of CBL Properties, Inc. or the
revenues of Borrower for any fiscal year shall fail to represent
at least ninety percent (90%) of the total revenues of CBL
Properties, Inc. for such fiscal year.
(q) At any time, for any reason (i) subject to the
provisions of Section 7.3 hereof, any Collateral Document or
other Loan Document ceases to be in full force and effect in any
material respect or (ii) Borrower or any Affiliate of Borrower
seeks to repudiate its Obligations thereunder and the Liens
intended to be created thereby are, or Borrower or any Affiliate
of Borrower seeks to render such Liens, invalid and unperfected,
or (iii) subject to the provisions of Section 7.3 hereof, Liens
in favor of the Agent and/or Lenders contemplated by the
Collateral Documents shall, at any time, for any reason, be
invalidated or otherwise cease to be in full force and effect, or
such Liens shall be subordinated or shall not have the priority
contemplated by this Agreement or the other Loan Documents, and
such Default under this item (ii) continues for thirty (30) days
after written notice thereof has been given to Borrower Agent.
SECTION 7.2 REMEDIES. Upon the occurrence of an Event of
Default: (a) in the case of any Event of Default specified in
clauses 7.1(g) or 7.1(h) above with respect to Borrower, CBL
Properties, Inc. or any of their respective Significant
Subsidiaries, the Commitments shall automatically terminate and
the Obligations (together with accrued interest thereon) shall
become immediately due and payable, without any notice to
Borrower or any other act by Agent and without presentment,
demand, protest, notice of intention to accelerate or notice of
acceleration, or other notice of any kind, all of which are
hereby waived by Borrower; (b) the Agent shall, at the direction
of the Majority Lenders (i) by notice to Borrower terminate the
Commitments, which shall thereupon terminate, and (ii) by notice
to Borrower declare the Obligations (together with accrued
interest thereon) to be, and the Obligations shall thereupon
become, immediately due and payable without presentment, demand,
protest, notice of intention to accelerate or notice of
acceleration, or other notice of any kind, all of which are
hereby waived by Borrower; and (c) the Agent may exercise any and
all other rights and remedies granted to the Agent under this
Agreement or under any of the Loan Documents or pursuant to law,
all of which shall be cumulative and none of which shall be
exclusive.
SECTION 7.3 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT
UPON DEFAULT. If any Event of Default shall have occurred and be
continuing, the Agent may, irrespective of whether it is taking
any of the actions described in Section 7.2 or otherwise, make
demand upon Borrower to, and forthwith upon such demand Borrower
will, pay to the Agent on behalf of the Lenders in same-day funds
at the Agent's Lending Office, for deposit in a cash collateral
account, an amount equal to the aggregate face amount of all
Letters of Credit then outstanding. If at any time the Agent
determines that any funds held in any such cash collateral
account are subject to any right or claim of any Person other
than the Agent and the Lenders or that the total amount of such
funds is less than the aggregate face amount of all Letters of
Credit, Borrower will, forthwith upon demand by the Agent, pay to
the Agent, as additional funds to be deposited and held in such
cash collateral account, an amount equal to the excess of (a)
such aggregate face amount of all outstanding Letters of Credit
over (b) the total amount of funds, if any, then held in such
cash collateral account that the Agent determines to be free and
clear of any such right and claim.
SECTION 7.4 CURING DEFAULTS UNDER COLLATERAL DOCUMENTS.
Lenders hereby agree that Borrower may cure any Default under
Section 7.1(d) hereof relating to the Collateral Documents and
any Default under this Agreement which relates solely to an
Eligible Project by giving Agent written notice within the
applicable notice and cure period that the Eligible Project to
which such Collateral Document relates shall be removed from the
Borrowing Base, so long as both of the following conditions are
satisfied:
(a) such Default does not constitute a Default or
Event of Default under any other term of this
Agreement; and
(b) the sum of the aggregate principal amount of the
outstanding Advances plus the aggregate face
amount of the outstanding Letters of Credit does
not exceed the Borrowing Base after giving effect
to the removal of such Eligible Project.
SECTION 7.5 PERMITTED DEFICIENCY. Notwithstanding
anything to the contrary set forth herein, (a) failure of
Borrower or any other Person owing any of the Collateral to keep
such Collateral in the condition required under Section 6.3
hereof or under the comparable provisions of the Mortgage
applicable thereto; (b) failure of Borrower or any of its
Subsidiaries or any other Person owning an Eligible Project to
pay Impositions in the manner required under Section 6.5 hereof
or under the comparable provisions of the Mortgage applicable
thereto; (c) failure of Borrower or any other Person owning an
Eligible Project to comply with Legal Requirements applicable to
the Collateral as required under Section 6.6 hereof or under the
comparable provisions of the Mortgage applicable thereto; (d)
failure of Borrower or any of its Subsidiaries or any other
Person owning an Eligible Project to comply with any Legal
Requirement required under Section 5.1 of the Mortgage applicable
thereto; (e) failure of Borrower or any other Person owning an
Eligible Project to prevent alterations to any Eligible Project
as required under Section 5.2 of the Mortgage applicable thereto;
(f) failure of Borrower or any other Person owning an Eligible
Project to replace "Fixtures" or "Personalty" required under, and
as such terms are defined in, Section 5.3 of the Mortgage
applicable thereto; (g) the existence of any non-consensual Lien
on the any of the Collateral not permitted by Section 6.17 hereof
or by the applicable terms of the Collateral Documents; or (h)
Borrower and/or its Subsidiary, Subpartnership or other Person
owing an Eligible Project shall fail to deposit with the Agent
any "Casualty Completion Deposit" or "Escrowed Sums" required
under, and as such terms are defined in, the Mortgage to which
such Eligible Project is subject, shall not constitute a Default
or Event of Default hereunder, so long as the following
conditions are satisfied:
(I) the sum (without duplication) of (A) the cost of
correcting all failures described in (a) through (f)
above, as determined by Agent in its reasonable
discretion, plus (B) the amount secured by Liens
described in (g) above plus (C) the amount of
Indebtedness secured by Liens permitted under Section
6.17(b) hereof plus (D) the aggregate amount of
unpaid Casualty Completion Deposits or Escrowed Sums
(said sum being referred to herein as the "Permitted
Deficiency"), plus (E) the amount of all judgments or
orders for the payment of money rendered against
Borrower, CBL Properties, Inc. or any of their
Significant Subsidiaries which have continued
unbonded, unsatisfied and unstayed for a period of
sixty (60) days; plus (F) the principal balance of
any Indebtedness under any Guarantee, note, indenture
or other agreement relating to or evidencing
Indebtedness of Borrower, CBL Properties, Inc. or any
of their Subsidiaries on which any payment is past
due or in respect of which any event has occurred the
effect of which is to cause or to permit (giving
effect to any grace or cure period applicable
thereto) the holder or holders of such Indebtedness
to cause such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase or
otherwise), prior to its stated maturity does not
exceed, in the aggregate at any one time,
$5,000,000.00;
(ii) Such Permitted Deficiency does not constitute a
Default or Event of Default under this Agreement or
the other Loan Documents except to the extent
described in clauses (a) through (h) above;
(iii) The aggregate amount of the Permitted Deficiencies
either secured by a Lien or consisting of unpaid
Casualty Completion Deposits or Escrowed Sums does
not exceed the difference between (A) the Borrowing
Base (prior to reduction by the amount of the
Permitted Deficiency, as required by this Section
7.5), minus (B) the sum of the aggregate principal
amount of all outstanding Advances plus the aggregate
face amount of all outstanding Letters of Credit;
(iv) Borrower is proceeding to cure all such failures in a
diligent manner; and
(v) The Borrowing Base shall be reduced by the amount of
(A) any outstanding Permitted Deficiency secured by a
Lien on any of the Collateral and (B) any outstanding
Permitted Deficiency representing an unpaid Casualty
Completion Deposit or Escrowed Sums.
ARTICLE 8.
THE AGENT
SECTION 8.1 APPOINTMENT AND AUTHORIZATION. Each Lender
irrevocably appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan
Documents and the Collateral Documents as are granted to Agent by
the terms thereof, together with all such powers as are
reasonably incidental thereto. Borrower shall be entitled to
rely upon a written notice or written response from Agent as
being made pursuant to the requisite concurrence or consent of
the Lenders necessary to take such action without investigation
or otherwise contacting the Lenders hereunder.
SECTION 8.2 AGENT AND AFFILIATES. Agent shall have the
same rights and powers under the Loan Documents and the
Collateral Documents as any other Lender and may exercise or
refrain from exercising the same as though it were not Agent, and
Agent and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of business with Borrower or
Affiliate of Borrower as if it were not Agent hereunder.
SECTION 8.3 ACTION BY AGENT. The Agent (which term as
used in this sentence and in Section 8.7 hereof and the first
sentence of Section 8.8 hereof shall include reference to its
Affiliates and its own and its Affiliates' shareholders,
officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in
this Agreement, and shall not by reason of this Agreement be a
trustee for any Lender; (a) shall not be responsible to the
Lenders for any recitals, statements, representations or
warranties contained in this Agreement or any of the other Loan
Documents, or in any certificate or other instrument, document or
agreement referred to or provided for in, or received by any of
them under, this Agreement or any of the other Loan Documents, or
for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, any Note or any
of the other Loan Documents or for any failure by Borrower or any
other Person to perform any of its obligations hereunder or
thereunder; (c) subject to Section 8.6 hereof, shall not be
required to initiate or conduct any litigation or collection
proceedings hereunder; (d) shall have no liability to any Lender
for any determination made in good faith by the Agent that such
Lender is in default of its obligations hereunder; and (e) shall
not be responsible for any action taken or omitted to be taken by
it hereunder or under any other agreement, document or instrument
referred to or provided for herein or in connection herewith,
except for its own gross negligence or willful misconduct. The
Agent may deem and treat the payee of any Note as the holder
thereof for all purposes hereof unless and until a written notice
of the assignment or transfer complying with the terms and
conditions of Section 9.6 hereof.
SECTION 8.4 CONSULTATION WITH EXPERTS. Agent may consult
with legal counsel (who may be counsel for Borrower) ,
independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 8.5 RELIANCE BY AGENT. The Agent shall be
entitled to rely upon any certification, notice or other
communication (including any thereof by telephone, telex,
facsimile, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the
proper Person or Persons. As to any matters not expressly
provided for by this Agreement, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, and no
Lender shall have any right of action against Agent as a result
of Agent acting or refraining from acting, hereunder or under the
other Loan Documents in accordance with instructions signed by
the Majority Lenders (or, where applicable, all Lenders) and such
instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders; provided,
however, the Agent shall not be required to take any action which
(a) the Agent reasonably believes will expose it to personal
liability unless the Agent receives an indemnification
satisfactory to it from the Lenders with respect to such action
or (b) is contrary to this Agreement, the Notes, the other Loan
Documents or Applicable Law.
SECTION 8.6 DEFAULTS. The Agent shall not be deemed to
have knowledge or notice of the occurrence of a Default or Event
of Default (other than the non-payment of principal of or
interest on Loans or of fees) unless the Agent has received
notice from a Lender or the Borrower specifying such Default or
Event of Default and stating that such notice is a "Notice of
Default." In the event of any such non-payment or in the event
the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give, and to the extent the
Agent otherwise has actual knowledge of a Default or Event of
Default the Agent shall use best efforts to give, prompt notice
thereof to the Lenders.
SECTION 8.7 INDEMNIFICATION. Each Lender shall, in
accordance with its Pro Rata Share, promptly (and in all events
within ten [10] days after demand therefor) reimburse (to the
extent not reimbursed by Borrower) Agent for, and indemnify Agent
against, any third- party costs (including, without limitation,
Protective Advances and costs described in Section 8.12(e) and
Section 8.12(f)), expense (including attorneys' fees and
disbursements provided that, if outside counsel is not used by
the Agent, the allocated cost of in-house counsel of Agent shall
be deemed to be a third-party cost and expense ), claim, demand,
action, loss or liability (except such as result from Agent's
gross negligence or willful misconduct) that Agent may pay,
suffer or incur in connection with the Loan Documents, the
Collateral Documents or any action taken or omitted by Agent.
The obligations of Lenders under this Section 8.7 shall survive
the payment in full of all Obligations and the termination of
this Agreement. In the event that after payment and distribution
of any amount by Agent to Lenders, any Lender or third party,
including Borrower, any creditor of Borrower or a trustee in
bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders, then
Lenders, in proportion to their respective Pro Rata Share, shall
reimburse Agent for all such amounts. Notwithstanding the
foregoing, Agent shall not be obligated to advance any amounts
hereunder (other than Agent's Pro Rata Share of each Advance) and
may require the deposit with Agent by each Lender of its Pro Rata
Share of any material expenditures anticipated by Agent before
they are incurred or made payable.
SECTION 8.8 CREDIT DECISION. Each Lender acknowledges
that it has, independently and without reliance upon Agent or any
other Lender, and based on such documents and information as it
has deemed appropriate, made its own credit analysis and decision
to enter into this Agreement. Each Lender also acknowledges that
it will, independently and without reliance upon Agent or any
other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking any action under the
Loan Documents (including without limitation decisions with
respect to the matters described in clauses (i) through (x) of
Section 9.5(a) of this Agreement) or the Collateral Documents.
SECTION 8.9 FAILURE TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 8.7
hereof against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.
SECTION 8.10 RESIGNATION OR REMOVAL OF AGENT; CO-AGENT.
(a) Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower.
For good cause, the Majority Lenders may remove Agent at any time
by giving at least thirty (30) days prior written notice to
Agent, Borrower and the other Lenders. For purposes of this
Section 8.10, in determining whether the Majority Lenders have
approved the removal of the Agent, the Agent, in its capacity as
a Lender, will be disregarded and excluded and the Pro Rata
Shares of the remaining Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of the Agent. Such
resignation or removal shall take effect upon the acceptance of
appointment as Agent by the successor Agent. Upon any such
resignation or removal, the Majority Lenders shall have the right
to appoint a successor Agent consented to by Borrower, which
consent shall not be unreasonably withheld. If no successor
Agent shall have been so appointed by the Majority Lenders and
shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation or the
Majority Lender's removal of the retiring Agent, the retiring
Agent may, on behalf of the Lenders appoint a successor Agent
consented to by Borrower, which consent shall not be unreasonably
withheld. Any successor Agent must be a bank (i) the senior debt
obligations of which (or such bank's parent's senior debt
obligations) are rated not less than Baa-1 by Moody's Investors
Services, Inc. or a comparable rating by a rating agency
acceptable to the Majority Lenders and (ii) which has total
assets in excess of $10,000,000,000.00. Upon the acceptance of
any appointment as Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 8 shall
continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the
Agent. Upon the acceptance of any appointment as Agent, such
successor Agent shall confirm to Borrower, in writing, the agency
fees to be paid to such successor Agent pursuant to Section
2.8(d).
(b) In the event that Applicable Law imposes any
restrictions on the identity of an agent such as the Agent or
requires the appointment of any co-agent in connection therewith,
the Agent may, in its discretion, for the purpose of complying
with such restrictions, appoint one or more co-agents hereunder
consented to by Borrower, which consent shall not be unreasonably
withheld by Borrower. Any such Co-Agent(s) shall have the same
rights, powers, privileges and obligations as the Agent and shall
be subject to and entitled to the benefits of all provisions of
this Agreement and the Loan Documents relative to the Agent but
the appointment of a co-agent shall not increase the obligation
of Borrower hereunder. In addition to any rights of the Majority
Lenders set forth in Section 8.10(a) above, any such Co-Agent may
be removed at any time by the Agent.
SECTION 8.11 CONSENT AND APPROVALS.
(a) Each Lender has authorized and directed, and hereby
authorizes and directs, Agent to enter into the Loan Documents
other than this Agreement for the benefit of Lenders. Each
Lender agrees that any action taken by Agent or the Majority
Lenders (or, where required by the express terms of this
Agreement, a greater proportion of Lenders) in accordance with
the provisions of this Agreement or any Loan Document, and the
exercise by Agent or the Majority Lenders (or, where so required,
such greater proportion), of the powers set forth herein or
therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all
Lenders. Without limiting the generality of the foregoing, the
Agent shall have the sole and exclusive right and authority to:
(i) act as the disbursing and collecting agent for the
Lenders with respect to all payments and collections arising
in connection with this Agreement and the Loan Documents
relating to the Collateral;
(ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the
Borrower or any of its Subsidiaries;
(iii) act as collateral agent for the Lenders for
purposes of the perfection of all security interests and
Liens created by such agreements and all other purposes
stated therein, provided, however, the Agent hereby
appoints, authorizes and directs the Lenders to act as
collateral sub-agents for the Agent and the Lenders for
purposes of the perfection of all security interests and
Liens with respect to any of the Collateral held by such
Lender;
(iv) manage, supervise and otherwise deal with the
Collateral;
(v) take such action as is necessary or desirable to
maintain the perfection and priority of the security
interest and Liens created or purported to be created by the
Loan Documents;
(vi) deliver notices, including notices of default,
hereunder and under the other Loan Documents; and
(vii) except as may be otherwise specifically
restricted by the terms of this Agreement or any other Loan
Document, exercise all remedies given to the Agent or the
Lenders with respect to the Collateral under the Loan
Documents, Applicable Law or otherwise.
(b) Each of the following shall require the approval or
consent of the Majority Lenders:
(i) approval of certain actions with respect to
management agreements for the Eligible Projects pursuant to
Section 3.2(b) hereof;
(ii) approval of a Major Construction Project under
Section 3.4 hereof;
(iii) approval of any material amendment of the
organizational documents of Borrower, CBL Properties, Inc.
or their respective Subsidiaries prohibited by Section 7.1
hereof;
(iv) approval of certain changes in executive officers
otherwise prohibited by Section 7.1 hereof;
(v) acceleration of the Obligations following an Event
of Default or rescission of such acceleration under Section
7.2(b) hereof;
(vi) approval of the exercise of rights and remedies
under the Loan Documents following an Event of Default;
(vii) removal of Agent and appointment of a successor
under Section 8.10 hereof;
(viii) approval of a Post-Foreclosure Plan and related
matters pursuant to Section 8.12(f) hereof; and
(ix) except as otherwise provided in Section 9.5,
approval of any amendment, modification or termination of
this Agreement.
(c) Designation of a Project as an Eligible Project shall
require the approval or consent of the Supermajority Lenders
pursuant to Section 3.1(a) hereof.
(d) Approval of certain Protective Advances shall require
the approval of either the Majority Lenders or all of the
Lenders, all as set forth in Section 8.12(a) hereof.
(e) In addition to the required consents or approvals
referred to in Section 8.11(b) above, Agent may at any time
request instructions from the Majority Lenders with respect to
any actions or approvals which, by the terms of this Agreement or
of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if
such instructions are promptly requested, Agent shall be
absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from taking any action or
withholding any approval under any of the Loan Documents until it
shall have received such instructions from the Majority Lenders.
Agent shall promptly notify each Lender at any time that the
Majority Lenders have instructed Agent to act or refrain from
acting pursuant hereto.
(f) All communications from Agent to Lenders requesting
Lenders determination, consent, approval or disapproval (i) shall
be given in the form of a written notice to each Lender, (ii)
shall be accompanied by a description of the matter or thing as
to which such determination, approval, consent or disapproval is
requested, or shall advise each Lender where such matter or thing
may be inspected, or shall otherwise describe the matter or issue
to be resolved, (iii) shall include, if reasonably requested by a
Lender and to the extent not previously provided to such Lender,
written materials and a summary of all oral information provided
to Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall
reply promptly, but in any event within ten (10) Business Days
after receipt of the request therefor by Agent (the "Lender Reply
Period"). Unless a Lender shall give written notice to Agent
that it objects to the recommendation or determination of Agent
(together with a written explanation of the reasons behind such
objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval
of Majority Lenders or all Lenders, Agent shall submit its
recommendation or determination for approval of or consent to
such recommendation or determination to all Lenders and upon
receiving the required approval or consent shall follow the
course of action or determination recommended to Lenders by Agent
or such other course of action recommended by Majority Lenders or
all Lenders, as the case may be, and each non-responding Lender
shall be deemed to have concurred with such recommended course of
action.
SECTION 8.12 AGENCY PROVISIONS RELATING TO COLLATERAL.
(a) Agent is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from
any Lender, from time to time prior to an Event of Default, to
take any action with respect to any Collateral or Loan Document
which may be necessary to perfect and maintain perfected Liens
upon the Collateral granted pursuant to the Collateral Documents.
Agent may make, and shall be reimbursed for, Protective
Advance(s) during any one calendar year with respect to each
Eligible Project up to the sum of (i) amounts expended to pay
real estate taxes, assessments and governmental charges or levies
imposed upon such Eligible Project, (ii) amounts expended to pay
insurance premiums for policies of insurance related to such
Eligible Project, and (iii) $500,000.00. Protective Advances in
excess of said sum during any calendar year for any Eligible
Project shall require the consent of Majority Lenders. Any
Protective Advance which would, when aggregated with all other
Advances, cause the Lenders to exceed their Commitments, shall
require the consent of all of the Lenders; provided, however,
that each Lender will approve or disapprove any request by the
Agent for such Protective Advance within three (3) Business Days
after receipt of such request from the Agent; provided, further,
that any Lender who fails to so approve or disapprove within such
three (3) Business Day period shall be deemed to have approved
such Protective Advance.
(b) Lenders hereby irrevocably authorize Agent, at its
option and in its discretion, to release any Lien granted to or
held by Agent upon any Collateral (i) upon termination of the
Commitments and repayment and satisfaction of all Loans, and all
other Obligations and the termination of this Agreement or (ii)
constituting property being released in compliance with Section
3.1(d) hereof or (iii) if approved, authorized or ratified in
writing by Agent at the direction of all Lenders. Without in any
manner limiting Agent's authority to act without any specific or
further authorization or consent by Lenders (as set forth in
Section 8.5), upon request by Agent at any time, Lenders will
confirm in writing Agent's authority to release the Collateral
Documents with respect to any Eligible Project pursuant to
Section 3.1(d) or this Section 8.12(b).
(c) So long as no Default or Event of Default is then
continuing, upon receipt by Agent of any such written
confirmation as referenced in Section 8.12(b)(iii) from all
Lenders of its authority to release Collateral, and upon at least
five (5) Business Days prior written request by Borrower, Agent
shall (and is hereby irrevocably authorized by Lenders to)
execute such documents as may be necessary to evidence the
release of the Liens granted to Agent for the benefit of Lenders
herein or pursuant hereto upon such Collateral; provided, that
(i) Agent shall not be required to execute any such document on
terms which, in Agent's opinion, would expose Agent to liability
or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such
release shall not in any manner discharge, affect or impair the
Obligations or any Liens upon (or obligations of Borrower in
respect of) any Project which shall continue to constitute part
of the Collateral.
(d) Except as provided in this Agreement, Agent shall have
no obligation whatsoever to any Lender or to any other Person to
assure that the Collateral exists or is owned by Borrower or is
cared for, protected or insured or has been encumbered or that
the Liens granted to Agent herein or in any of the other Loan
Documents or pursuant hereto or thereto have been properly or
sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of
care, disclosure or fidelity, or to continue exercising, any of
the rights, authorities and powers granted or available to the
Agent in this Agreement or in any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, or in
any act, omission or event related thereto, the Agent may act in
any manner it may deem appropriate, in its sole discretion, given
its own interest in the Collateral as one of the Lenders and that
the Agent shall have no duty or liability whatsoever to any
Lender.
(e) Should Agent commence any proceeding or in any way seek
to enforce its rights or remedies under the Loan Documents,
irrespective of whether as a result thereof Agent shall acquire
title to any Collateral, either through foreclosure, deed in lieu
of foreclosure, or otherwise, each Lender, upon demand therefor
from time to time, shall contribute its share (based on its Pro
Rata Share) of the reasonable costs and/or expenses of any such
enforcement or acquisition, including, but not limited to, fees
of receivers or trustees, court costs, title company charges,
filing and recording fees, appraisers' fees and fees and expenses
of attorneys to the extent not otherwise reimbursed by Borrower.
Without limiting the generality of the foregoing, each Lender
shall contribute its share (based on its Pro Rata Share) of all
reasonable costs and expenses incurred by Agent (including
reasonable attorneys' fees and expenses) if Agent employs counsel
for advice or other representation (whether or not any suit has
been or shall be filed) with respect to any Collateral or any
part thereof, or any of the Loan Documents, or the attempt to
enforce any security interest or Lien on any of the Collateral,
or to enforce any rights of Agent or any of Borrower's or any
other party's obligations under any of the Loan Documents, but
not with respect to any dispute between Agent and any other
Lender(s). Any loss of principal and interest resulting from any
Event of Default shall be shared by Lenders in accordance with
their respective Pro Rata Shares. It is understood and agreed
that in the event Agent determines it is necessary to engage
counsel for Lenders from and after the occurrence of an Event of
Default, said counsel shall be selected by Agent and written
notice of such selection, together with a copy of such counsel's
engagement letter and fee estimate, shall be delivered to
Lenders.
(f) In the event that all or any portion of the Collateral
is acquired by Agent as the result of a foreclosure or the
acceptance of a deed or assignment in lieu of foreclosure, or is
retained in satisfaction of all or any part the Obligations,
title to any such Collateral or any portion thereof shall be held
in the name of Agent or a nominee or subsidiary of Agent, as
agent, for the ratable benefit of Agent and Lenders. Agent shall
prepare a recommended course of action for such Collateral (the
"Post-Foreclosure Plan"), which shall be subject to the approval
of the Majority Lenders. In the event that Majority Lenders do
not approve such Post-Foreclosure Plan, any Lender shall be
permitted to submit an alternative Post-Foreclosure Plan to Agent
and Agent shall submit any and all such additional Post-Foreclosure
Plans to the Lenders for evaluation and the approval of Majority
Lenders. Agent shall manage, operate, repair, administer, complete,
construct, restore or otherwise deal with the Collateral acquired
and administer all transactions relating thereto, including, without
limitation, employing a management agent, leasing agent and other
agents, contractors and employees, including agents of the sale of
such Collateral, and the collecting of rents and other sums from such
Collateral and paying the expenses of such Collateral. Upon demand
therefor from time to time, each Lender will contribute its share
(based on its Pro Rata Share) of all reasonable costs and expenses
incurred by Agent pursuant to the Post-Foreclosure Plan in
connection with the construction, operation, management,
maintenance, leasing and sale of such Collateral. In addition,
Agent shall render or cause to be rendered by the managing agent,
to each of the Lenders, monthly, an income and expense statement
for such Collateral, and each of the Lenders shall promptly
contribute its Pro Rata Share of any operating loss for such
Collateral, and such other expenses and operating reserves as
Agent shall deem reasonably necessary pursuant to and in
accordance with the Post-Foreclosure Plan. To the extent there
is net operating income from such Collateral, Agent shall, in
accordance with the Post-Foreclosure Plan, determine the amount
and timing of distributions to Lenders. All such distributions
shall be made to Lenders in accordance with their respective Pro
Rata Shares. Lenders acknowledge that if title to any Collateral
is obtained by Agent or its nominee, such Collateral will not be
held as a permanent investment but will be liquidated as soon as
practicable. Agent shall undertake to sell such Collateral, at
such price and upon such terms and conditions as the Majority
Lenders shall reasonably determine to be most advantageous. Any
purchase money mortgage or deed of trust taken in connection with
the disposition of such Collateral in accordance with the
immediately preceding sentence shall name Agent, as agent for
Lenders, as the beneficiary or mortgagee. In such case, Agent
and Lenders shall enter into an agreement with respect to such
purchase money mortgage defining the rights of Lenders in the
same Pro Rata Shares as provided hereunder, which agreement shall
be in all material respects similar to this Agreement insofar as
this Agreement is appropriate or applicable.
SECTION 8.13 DEFAULTING LENDERS.
(a) If a Lender fails or refuses to fund its Pro Rata Share
of an Advance hereunder and each other Lender has funded its Pro
Rata Share of such Advance, Borrower may request that the Agent
deliver to such non-funding Lender a notice stating that unless
such Lender funds such Advance within five (5) days of its
receipt of such notice, such Lender shall be a Defaulting Lender.
The Agent, upon receipt of such request, shall send such notice
if either (i) the Agent determines that such Lender, by not
funding its Pro Rata Share of such Advance, has defaulted in its
obligations hereunder or (ii) Borrower has obtained a judgment
from a court of competent jurisdiction that such non-funding
Lender has breach it obligations to Borrower by failing to fund
its Pro Rata Share of such Advance. Any determination made in
good faith by the Agent pursuant to clause (i) above shall be
conclusive and binding on Borrower and such Lender unless and
until a judgment to contrary is obtained as described in clause
(ii) above.
(b) Once a Lender becomes a Defaulting Lender, the Agent
shall notify the other Lenders of such occurrence, whereupon the
Pro Rata Share of each of the other Lenders shall be recalculated
to exclude the Pro Rata Share of such Defaulting Lender.
(c) Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender has funded its Pro Rata
Share of any Advance which was previously a Non Pro Rata Advance,
or such Lender is determined by a court of competent jurisdiction
not to have defaulted in it obligations hereunder or all other
Lenders have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of such
Non Pro Rata Advance, all of the Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior
payment in full of all principal, interest and fees in respect of
all Non Pro Rata Advances in which the Defaulting Lender has not
funded its Pro Rata Share (such principal, interest and fees
being referred to as "Senior Loans"). All amounts paid by
Borrower and otherwise due to be applied to the Obligations owing
to the Defaulting Lender pursuant to the terms hereof shall be
distributed by Agent to the other Lenders in accordance with
their respective Pro Rata Shares (recalculated for purposes
hereof to exclude the Defaulting Lender's Commitment), until all
Senior Loans have been paid in full. This provision governs only
the relationship among Agent, each Defaulting Lender, and the
other Lenders; nothing hereunder shall limit the obligation of
Borrower to repay all Advances in accordance with the terms of
this Agreement. The provisions of this section shall apply and
be effective regardless of whether an Event of Default occurs and
is then continuing, and notwithstanding (i) any other provision
of this Agreement to the contrary, (ii) any instruction of
Borrower as to its desired application of payments or (iii) the
suspension of such Defaulting Lender's right to vote on matters
which are subject to the consent or approval of Majority Lenders,
Supermajority Lender or all Lenders.
(d) Agent shall be entitled to (i) collect interest from
such Lender for the period from the date on which the payment was
due until the date on which the payment is made at the Federal
Funds Rate for each day during such period, (ii) withhold or
setoff, and to apply to the payment of the defaulted amount and
any related interest, any amounts to be paid to such Defaulting
Lender under this Agreement, and (iii) bring an action or suit
against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related
interest. In addition, the Defaulting Lender shall indemnify,
defend and hold Agent and each of the other Lenders harmless from
and against any and all costs, expenses and liabilities plus
interest thereon at the Default Rate set forth in the Loan
Documents for funds advanced by Agent or any other Lender on
account of the Defaulting Lender which they may sustain or incur
by reason of or as a direct consequence of the Defaulting
Lender's failure or refusal to abide by its obligations under
this Agreement.
(e) So long as any Lender is a Defaulting Lender, (i) no
Unused Facility Fee shall accrue in favor of, or be payable to,
such Defaulting Lender; (ii) the Defaulting Lender's outstanding
portion of the Loan shall accrue interest during each month at a
rate equal to the LIBOR Rate applicable to an Interest Period
having a duration one-month and commencing on the first LIBOR
Business Day of such month; and (iii) at the request of Borrower,
all interest payable to such Defaulting Lender shall be placed by
the Agent in a cash collateral account and held as security for
the Obligations owed to all of the Lenders and such interest
shall not be paid to such Defaulting Lender until such time as
either (A) the other Lenders have been paid in full or (B) such
Lender is no longer a Defaulting Lender; provided, however, if
such Lender has been found to be a Defaulting Lender pursuant to
a judgment of a court of competent jurisdiction that such non-funding
Lender has breached its funding obligations hereunder and such
judgment is not a final, non-appealable judgment, then until Borrower
obtains such a final, non-appealable judgment that such non-funding
Lender is in breach of its funding obligations hereunder, Borrower
shall continue to pay the Unused Facility Fee on such Defaulting
Lender's Commitment and shall pay interest on the Defaulting Lender's
portion of the outstanding Loan at the rate applicable to the other
Lenders' portion of the outstanding Loan and the Agent shall, at the
request of Borrower, deposit such Unused Facility Fee and the excess
of such interest over the interest payable at the rate set forth in
clause (ii) above into a cash collateral account, held as security for
the Obligations owed to all of the Lenders and paid (x) to the Borrower,
if such non-funding Lender is determined, in a final, non-appealable
judgment from a court of competent jurisdiction to have breached
its funding obligations hereunder, or (y) to such non-funding
Lender, if such non-funding Lender is determined, in a final,
non-appealable judgment from a court of competent jurisdiction
not to have breached its funding obligations hereunder.
(f) A Defaulting Lender shall cease to be a Defaulting
Lender upon (i) the payment by such Defaulting Lender to the
Agent, for the benefit of the Agent and the Lenders, as
appropriate, of its Pro Rata Share (determined without giving
affect to any recalculation thereof as a result of such Lender
being a Defaulting Lender) of an amount equal to the amount of
each Advance which was previously a Non Pro Rata Advance plus all
other amounts required to be paid or funded by Lenders hereunder
since the date such Lender became a Defaulting Lender and for
which such Defaulting Lender has not paid or funded its Pro Rata
Share, (ii) any judgment that such non-funding Lender has
breached its obligations to Borrower in respect of such Non Pro
Rata Advance is reversed or vacated for any reason; or (iii) the
Agent and all other Lenders receiving payment in full (whether by
repayment or prepayment) of the principal and interest due in
respect of all such Non Pro Rata Advances and all such other
amounts.
(g) In the event a non-funding Lender is designated as a
Defaulting Lender as a result of a judgment that such non-funding
Lender has breached its obligations to Borrower in respect of
such Non Pro Rata Advance and such judgment is subsequently
reversed for any reason, then (i) such Lender shall not longer be
a Defaulting Lender, (ii) the Pro Rata Share of each Lender shall
be adjusted to include the Commitment of such Lender, (iii) such
Lender shall be entitled to immediate payment of any and all
amounts owed to it and held in any cash collateral account
established pursuant to Section 8.13; (iv) the Borrower shall,
within three (3) Business Days, repay to the Agent, for the
benefit of the other Lenders, the aggregate amount by which the
outstanding Advances made by each Lender exceeds such Lender's
Pro Rata Share of the Loan (giving effect to the recomputation of
Pro Rata Share pursuant to clause (ii) above); and (v) such
Lender shall have the right to recover from Borrower any damages
that such Lender may have suffered as a result of having been
categorized as "Defaulting Lender" and (vi) such Lender such
other remedies against Borrower as it may have under this
Agreement, at law or in equity.
SECTION 8.14 BORROWER NOT A BENEFICIARY. The provisions
of this Article 8 are solely for the benefit of the Agent and the
Lenders and neither the Borrower nor any Affiliate of the
Borrower shall have any right to rely on or enforce any of the
provisions hereof; provided, however, that the Borrower shall
have the rights granted to it in subsections (a), (b), (e) and
(f) of Section 8.13 hereof. In performing its functions and
duties under this Agreement, the Agent shall act solely as the
agent of the Lenders and does not assume and shall not be deemed
to have assumed any obligations or relationship of agency,
trustee or fiduciary with or for the Borrower or any Affiliate of
the Borrower. Lenders represent to Borrower that, other than
letter agreements relating to the payment of fees and letters
committing to participate as a Lender, the Loan Documents contain
as of the date hereof all of the written agreements establishing
the relationships between the Agent and the Lenders and among the
Lenders in connection with the Loan.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1 NOTICES. All notices or other communications
required or permitted to be given pursuant to this Agreement
shall be in writing and shall be considered as properly given if
mailed by first-class United States mail, postage prepaid,
registered or certified with return receipt requested, if sent by
national overnight courier providing documentation of receipt, if
delivered in person to the intended addressee or if sent by
prepaid telegram, telex or telecopy, with a copy of such
telegram, telex or telecopy sent by mail, overnight courier or
personal delivery as aforesaid. Notice so mailed shall be
effective three (3) Business Days after its deposit (provided
however, that any Notice of Borrowing or Rate Selection Notice so
mailed shall be effective only if and when received by Agent).
Notice given in any other manner shall be effective only if and
when received by the addressee. For purposes of notice, the
addresses of the parties shall be as set forth on the signature
pages hereto; provided, however, that any party shall have the
right to change its address for notice hereunder to any other
location within the continental United States by the giving of
thirty (30) days' notice to the other parties in the manner set
forth hereinabove.
SECTION 9.2 NO WAIVER. Any failure by Agent or any
Lender to insist, or any election by Agent or any Lender not to
insist, upon strict performance by Borrower or its Affiliates of
any of the terms, provisions or conditions of the Loan Documents
shall not be deemed to be a waiver of same or of any other term,
provision or condition thereof, and Agent and the Lenders shall
have the right at any time or times thereafter to insist upon
strict performance by Borrower and its Affiliates of any and all
such terms, provisions and conditions. No delay or omission by
Agent or any Lender to exercise any right, power or remedy
accruing upon any Default or Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to
be a waiver of any such Default or Event of Default, or
acquiescence therein, and every right, power and remedy given by
this Agreement to Agent or any Lender may be exercised from time
to time and as often as may be deemed expedient by Agent or any
Lender. No consent or waiver, expressed or implied, by Agent or
any Lender to or of any Default or Event of Default by Borrower
or its Affiliates in the performance of the Obligations of
Borrower and its Affiliates hereunder or to any other Event of
Default shall be deemed or construed to be a consent or waiver to
or of any other Default or Event of Default in the performance of
the same or any other Obligations of Borrower or its Affiliates
hereunder. Failure on the part of Agent or any Lender to
complain of any act or failure to act or to declare an Event of
Default, irrespective of how long such failure continues, shall
not constitute a waiver by Agent or any such Lender of its rights
hereunder or impair any rights, powers, or remedies of Agent or
any Lender hereunder.
SECTION 9.3 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.
(a) Borrower agrees to reimburse the Agent for all of the
Agent's reasonable costs and expenses incurred in connection with
the development, preparation, execution, delivery, modification
or amendment of this Agreement, the Notes and the Collateral
Documents, including reasonable audit costs, appraisal costs, the
cost of searches, filings and filing fees, taxes and the fees and
disbursements of Agent's attorneys, Messrs. Troutman Sanders and
any counsel retained by them. Borrower further agrees to
reimburse the Agent and each Lender for all reasonable third-party
costs and expenses incurred by the Agent or such Lender (including
attorneys' fees and disbursements provided that, if outside counsel
is not used by the Agent, the allocated cost of in-house counsel of
Agent shall be deemed to be a third-party cost and expense) from and
after the occurrence of a Default to: (I) commence, defend or
intervene in any court proceeding; (ii) file a petition, complaint,
answer, motion or other pleading, or to take any other action in or
with respect to any suit or proceeding (bankruptcy or otherwise)
relating to the Collateral or this Agreement, the Notes or any of
the Collateral Documents; (iii) protect, collect, lease, sell, take
possession of, or liquidate any of the Collateral; (iv) attempt to
enforce any security interest in any of the Collateral or to seek
any advice with respect to such enforcement; and (v) enforce any of
the Agent's and the Lenders' rights to collect any of the Obligations.
(b) Borrower also agrees to pay, and to save harmless the
Agent and the Lenders from any delay in paying, any intangibles,
documentary stamp and other taxes, if any, which may be payable
in connection with the execution and delivery of this Agreement,
the Notes, the Letters of Credit or any of the Collateral
Documents, or the recording of any thereof, or in any
modification hereof or thereof.
(c) Borrower agrees to indemnify Agent and each Lender,
their respective Affiliates and the respective directors,
officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against
any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such
indemnitee in connection with any investigative, administrative
or judicial proceeding (whether or not such Indemnitee shall be
designated a party thereto) brought or threatened relating to or
arising out of the Loan Documents or the Collateral Documents or
any actual or proposed use of proceeds of the Loan hereunder;
provided that no Indemnitee shall have the right to be
indemnified hereunder for such Indemnitee's own gross negligence
or willful misconduct as determined by a court of competent
jurisdiction.
(d) In the event of the passage of any state, federal,
municipal or other governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner changing or
modifying the laws now in force governing the taxation of
Mortgages, security agreements, or assignments of leases or debts
secured thereby or the manner of collecting such taxes so as to
adversely affect Agent or any Lender, Borrower will pay any such
tax on or before the due date thereof. If Borrower fails to make
such prompt payment or if, in the opinion of Agent, any such
state, federal, municipal, or other governmental law, order, rule
or regulation prohibits Borrower from making such payment or
would penalize Agent if Borrower makes such payment or if, in the
opinion of Agent, the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by
applicable law, then the entire balance of the Obligations and
all interest accrued thereon shall, at the option of Agent,
become immediately due and payable.
SECTION 9.4 WAIVER OF SET-OFFS; SHARING OF SET-OFFS. (a)
Each Lender hereby waives any right of set-off against the
Obligations it has with respect to any deposit account of
Borrower, its Subsidiaries or Affiliates maintained with such
Lender or any other account or property of Borrower, its
Subsidiaries or its Affiliates held by such Lender other than the
Collateral; provided however, that the within waiver is not
intended, and shall not be deemed, to waive any right of set-off
(i) any Lender has with respect to any account required to be
maintained pursuant to this Agreement or any other Loan Document
or (ii) arising other than pursuant to this Agreement, the
Collateral Documents or the other Loan Documents.
(b) As to any set-off permitted pursuant to Section 9.4(a)
above, each Lender agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest
due with respect to the Obligations held by it which is greater
than the proportion received by any other Lender in respect of
the aggregate amount of principal and interest due with respect
to the Obligations held by such other Lender, such Lender
receiving such proportionately greater payment shall promptly
purchase such participation in the Obligations held by the other
Lenders, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with
respect to the Obligations held by Lenders shall be shared by
Lenders based upon each Lender's Pro Rata Share; provided that
nothing in this Section shall impair the right of any Lender to
exercise any right of set-off or counterclaim it may have and to
apply the amount subject to such exercise to the payment of
Indebtedness of Borrower other than the Obligations. Borrower
agrees, to the fullest extent it may effectively do so under
applicable law, that any holder of a participation in a
Obligations, whether or not acquired pursuant to the foregoing
arrangements, may exercise rights of set-off or counterclaim and
other rights with respect to such participation as fully as if
such holder of a participation were a direct creditor of Borrower
in the amount of such participation.
SECTION 9.5 AMENDMENTS AND WAIVERS.
(a) No amendment or modification of any provision of this
Agreement shall be effective without the written agreement of the
Majority Lenders (after notice to all Lenders) and Borrower
(except for amendments which by the express terms of this
Agreement do not require the consent of Borrower), and (b) no
termination or waiver of any provision of this Agreement, or
consent to any departure by Borrower therefrom (except as
expressly provided in Section 9.5(a)(v) below with respect to
waivers of late fees), shall in any event be effective without
the written concurrence of the Majority Lenders (after notice to
all Lenders), which Majority Lenders shall have the right to
grant or withhold at their sole discretion; provided, however,
that any amendment to Section 8.11(c) shall require the consent
of the Supermajority Lenders; provided, further, that the
following amendments, modifications or waivers shall require the
consent of all Lenders:
(i) increasing or decreasing the Commitment of any
Lender (except for ratable decreases in the Commitments by
Borrower pursuant to Section 2.1);
(ii) changing the principal amount or final maturity
of the Loan;
(iii) reducing the interest rates applicable to the
Loan;
(iv) reducing the rates on which fees payable
pursuant hereto are determined;
(v) forgiving or delaying any amount payable or
receivable under Article 2 or waiving any Default or Event
of Default in respect thereof;
(vi) changing the definition of "Majority Lenders",
"Supermajority Lenders," "Pro Rata Share" or "Borrowing
Base";
(vii) changing any provision contained in this Section
9.5;
(viii) releasing any obligor under any Loan Document
or any Collateral, unless such release is otherwise required
or permitted by the terms of this Agreement; or
(ix) consent to assignment by Borrower of all of its
duties and Obligations hereunder pursuant to Section 9.6;
(x) permitting the term of any Letter of Credit to
extend beyond the Termination Date;
provided, further, any amendment, waiver or modification of the
provisions of Article 8 (other than subsections (a), (b), (e),
(f) and (g) of Section 8.13) may be made without the consent of
the Borrower. Agent agrees to provide Borrower with notice of
any such amendment, waiver or modification; provided, however,
that the failure to give such notice shall not invalidate such
amendment, waiver or modification.
No amendment, modification, termination or waiver of any
provision of Article 8 or any other provision referring to Agent
shall be effective without the written concurrence of Agent, but
only if such amendment, modification, termination or waiver
alters the obligations or rights of Agent. Any waiver or consent
shall be effective only in the specific instance and for the
specific purpose for which it was given. No notice to or demand
on Borrower in any case shall entitle Borrower to any other
further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected
in accordance with this Section 9.5 shall be binding on each
assignee, transferee or recipient of Agent's or any Lender's
Commitment under this Agreement or the Advances at the time
outstanding.
SECTION 9.6 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Lenders.
(b) Any Lender may, in accordance with applicable law, at
any time sell to one or more banks or other institutions (each a
"Participant") participating interests in any Advances owing to
such Lender, the Note held by such Lender, the Commitment held by
such Lender hereunder or any other interests of such Lender
hereunder. Borrower agrees that each Participant shall be
entitled to the benefits of Sections 2.6, 9.3(c) and 9.7 hereof
with respect to its participation; provided that no Participant
shall be entitled to receive any greater amount pursuant to such
Section than such Lender would have been entitled to receive in
respect of the amount of the participation transferred by such
Lender to such Participant had no such transfer occurred. In no
event shall a Lender that sells a participation be obligated to
the Participant to take or refrain from taking any action
hereunder, under such Lender's Note or in respect of such
Lender's Commitment except that such Lender may agree that it
will not, without the consent of the Participant, agree to (I)
the increase or extension of the term, or the extension of the
time or waiver of any requirement for the reduction or
termination, of such Lender's Commitment, (ii) the extension of
any date fixed for the payment of principal of or interest on the
related Loan or Loans or any portion of any fees payable to the
Participant, (iii) the reduction of any payment of principal
thereof, or (iv) the reduction of the rate at which either
interest is payable thereon to a level below the rate at which
the Participant is entitled to receive interest in respect of
such participation.
(c) Each Lender may at any time assign, pursuant to an
assignment substantially in the form of Exhibit H attached hereto
and incorporated herein by reference, with (unless such
assignment is to an existing Lender or to an Affiliate of any
such Lender) the consent of the Agent and the Borrower (not to be
unreasonably withheld) to one or more banks or other institutions
(in either case, an "Assignee") all or any part of any Advances
owing to such Lender, the Note held by such Lender, the
Commitment held by such Lender or any other interest of such
Lender hereunder; provided, however, that (i) each such
assignment by a Lender shall be made in such manner so that the
same portion of its Advances, Note and Commitment is assigned to
the Assignee and (ii) unless Borrower and the Agent consent
otherwise, and except in the case of an assignment to another
Lender, any partial assignment of a Lender's Commitment shall be
in a minimum principal amount of $10,000,000.00, and (iii) at all
times prior to its resignation or replacement, Agent's Commitment
shall be equal to or greater than the Commitment of each other
Lender. Without restricting the right of Borrower or Agent to
reasonably object to any bank or financial institutional becoming
an assignee of an interest of a Lender hereunder, each proposed
assignee must be an existing Lender or a bank or financial
institution which (i) has (or, in the case of a bank which is a
subsidiary, such bank's parent has) a rating of its senior debt
obligations of not less than Baa-1 by Moody's Investors Services,
Inc. or a comparable rating by a rating agency acceptable to
Agent and (ii) has total assets in excess of $10,000,000,000.00.
Borrower and the Lenders agree that, to the extent of any
assignment, the Assignee shall be deemed to have the same rights
and benefits with respect to Borrower under this Agreement and
the Notes as it would have had if it were a Lender hereunder on
the date hereof with respect to its Pro Rata Share and the
assigning Lender shall be released from its Commitment hereunder,
to the extent of such assignment. Upon the making of an
assignment, the assigning Lender shall pay to the Agent an
assignment fee of $2,500.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 9.6, any
Lender may assign and pledge all or any portion of its Advances
and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by
such Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) Borrower authorizes each Lender to disclose to any
Participant or Assignee ("Transferee") and any prospective
Transferee any and all financial information in such Lender's
possession concerning Borrower which has been delivered to such
Lender by Borrower or the Agent pursuant to this Agreement or
which has been delivered to such Lender by Borrower in connection
with such Lender's credit evaluation of Borrower prior to
entering into this Agreement.
(f) Any Lender, at such Lender's sole cost and expense,
shall be entitled to have the Note held by it subdivided in
connection with a permitted assignment of all or any portion of
such Note and the respective Advances evidenced thereby pursuant
to Section 9.6(c) above. Any Lender, which by reason of an
assignment pursuant to Section 9.6(c) hereof or otherwise, has or
would have more than one (1) Note hereunder shall be entitled to
have such Notes consolidated into a single Note. In the case of
any such subdivision or consolidation, the new Note (the "New
Note") issued in exchange for a Note or Notes (the "Old Note(s)")
previously issued hereunder (i) shall be substantially in the
form of Exhibit A hereto, as appropriate, (ii) shall be dated the
date of such assignment or of the most recent Note held by such
Lender, as the case may be, (iii) shall be otherwise duly
completed and (iv) shall bear a legend, to the effect that such
New Note is issued in exchange for such Old Note(s) and that the
indebtedness represented by such Old Note(s) shall not have been
extinguished by reason of such exchange.
(g) Borrower will use reasonable efforts to cooperate with
Agent and Lenders in connection with the assignment of interests
under this Agreement or the sale of participations herein.
SECTION 9.7 CAPITAL ADEQUACY. If, after the date hereof,
any Lender shall have determined that either (i) the adoption or
implementation of any applicable law, rule, regulation or
guideline of general applicability regarding capital adequacy, or
any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or (ii) compliance by such Lender (or any
lending office of such Lender) with any request or directive of
general applicability regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital as a consequence of its
or Borrower's obligations hereunder to a level below that which
such Lender could have achieved but for such adoption,
implementation, change or compliance (taking into consideration
such Lender's policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, then from time to
time, within ten (10) days after demand by such Lender, which
demands shall include a calculation and a reference to the
applicable law, rule or regulation, Borrower shall pay to such
Lender such additional amount of amounts as will adequately
compensate such Lender for such reduction. Such Lender will use
good faith and reasonable efforts to designate a different
lending office for such Lender's Advances if such designation
will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender. Each Lender shall notify the
Agent and the Borrower of any event occurring after the date of
this Agreement entitling such Lender to compensation under this
Section 9.7 within 45 days, after such Lender obtains actual
knowledge thereof; provided that if any Lender fails to give such
notice within 45 days after it obtains actual knowledge of such
an event, such Lender shall, with respect to compensation payable
pursuant to this Section 9.7 in respect of any costs resulting
from such event, only be entitled to payment for costs incurred
from and after the date 45 days prior to the date that such
Lender gives such notice. A certificate of such Lender claiming
compensation under this Section 9.7 and setting forth the
additional amount of amounts to be paid to it hereunder, together
with the description of the manner in which such amounts have
been calculated, shall be conclusive in the absence of manifest
error. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
SECTION 9.8 COUNTERPARTS. This Agreement may be signed
in any number of counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
SECTION 9.9 NOTICE OF FINAL AGREEMENT. THIS AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.
SECTION 9.10 INVALID PROVISIONS. Any provision of any
Loan Document held by a court of competent jurisdiction to be
illegal, invalid or unenforceable shall not invalidate the
remaining provisions of such Loan Document which shall remain in
full force and effect and the effect thereof shall be confined to
the provision held invalid or illegal.
SECTION 9.11 MAXIMUM RATE. Regardless of any provision
contained in any of the Loan Documents, Lenders shall never be
entitled to receive, collect or apply as interest (whether termed
interest herein or deemed to be interest by operation of law or
judicial determination) on the Obligations any amount in excess
of interest calculated at the Maximum Rate, and, in the event
that any Lender ever receives, collects or applies as interest
any such excess, the amount which would be excessive interest
shall be deemed to be a partial prepayment of principal and
treated hereunder as such; and, if the principal amount of the
Obligations are paid in full, any remaining excess shall
forthwith be paid to Borrower. In determining whether or not the
interest paid or payable under any specific contingency exceeds
interest calculated at the Maximum Rate, Borrower and Lenders
shall, to the maximum extent permitted under applicable law, (i)
characterize any non-principal payment as an expense, fee or
premium rather than as interest; (ii) exclude voluntary
prepayments and the effects thereof; and (iii) amortize, prorate,
allocate and spread, in equal parts, the total amount of interest
throughout the entire contemplated term of the Obligations;
provided that, if the Obligations are paid and performed in full
prior to the end of the full contemplated term thereof, and if
the interest received for the actual period of existence thereof
exceeds interest calculated at the Maximum Rate, Lenders shall
refund to Borrower the amount of such excess or credit the amount
of such excess against the principal amount of the Obligations
and, in such event, Lenders shall not be subject to any penalties
provided by any laws for contracting for, charging, taking,
reserving or receiving interest in excess of interest calculated
at the Maximum Rate.
SECTION 9.12 LIMITATION UPON LIABILITY. Subject to the
exceptions and qualifications described below, CBL Properties,
Inc., Borrower's sole general partner, its successors and assigns
(the "General Partner"), shall not be personally liable for the
payment of the Obligations. Notwithstanding the foregoing
provisions of this paragraph: (a) if an Event of Default occurs,
nothing hereinabove stated shall in any way prevent or hinder the
Agent or the Lenders in the enforcement or foreclosure of the
Liens now or at any time hereafter securing the payment of the
Obligations, or in the pursuit or enforcement of any remedy or
judgment against Borrower and its assets; and (b) the General
Partner shall be fully liable to the Agent and the Lenders to the
same extent that the General Partner would be liable absent the
foregoing provisions of this Section 9.12: (c) for fraud or
willful misrepresentation by the General Partner or its
Affiliates (to the full extent of losses suffered by the Agent or
any Lender by reason of such fraud or willful
misrepresentations); (i) for the retention of any rental income
or other income in excess of operating expenses of the property
arising with respect to the property covered by any Loan Document
and collected by Borrower after the Agent has given Borrower any
notice that Borrower is in default under any of the Loan
Documents and that the Agent and the Lenders have exercised their
option to accelerate the maturity of the Obligations, foreclose
or require the foreclosure of the Liens securing payment thereof
or exercise any of the other rights, remedies and recourses of
the Agent or the Lenders under the Loan Documents (to the full
extent of the rental income or other income in excess of such
operating expenses collected by Borrower after the giving of any
such notice); (iii) for the fair market value, as of the time of
the giving of any notice referred to in (ii) above, of any
personalty or fixtures removed or disposed of by Borrower (other
than in accordance with the terms of the Mortgage encumbering the
same) after the giving of any notice referred to in (ii) above;
and (iv) for the misapplication by Borrower (contrary to the
provisions of this Agreement or the Loan Documents) of (x) any
proceeds paid under any insurance policy by reason of damage,
loss or destruction to any portion of the Collateral or the
Projects (to the full extent of such proceeds so misapplied); or
(y) any proceeds or awards resulting from the condemnation of all
or any part of the Collateral or Projects (to the full extent of
such proceeds or awards so misapplied). No subsequent owner of
the Collateral or the Projects shall be liable under the
foregoing clause (b) for the acts and omissions of any prior
owner, provided such subsequent owner and any partner therein or
other party thereto is not an Affiliate of such prior owner or
any partner therein or other party thereto, and further provided
that the Agent and the Majority Lenders have given their prior
written approval to the transfer of such Collateral or Projects
to such subsequent owner, if such approval is required under the
Loan Documents.
SECTION 9.13 COURSE OF DEALING. Borrower and Lenders
mutually agree that each shall proceed at all times in good faith
and in a commercially reasonable manner in the performance of its
obligations and in the exercise of its judgment or discretion
hereunder and under the other loan documents.
SECTION 9.14 TREATMENT OF CERTAIN INFORMATION;
CONFIDENTIALITY.
(a) Borrower acknowledges that from time to time
financial advisory, investment banking and other services may be
offered or provided to Borrower or one or more of its
Subsidiaries (in connection with this Agreement or otherwise) by
any Lender or by one or more Subsidiaries or Affiliates of such
Lender and Borrower hereby authorizes each Lender to share any
information delivered to such Lender by Borrower and its
Subsidiaries pursuant to this Agreement, or in connection with
the decision of such Lender to enter into this Agreement, to any
such Subsidiary or Affiliate, it being understood that any such
Subsidiary or Affiliate receiving such information shall be bound
by the provisions of clause (b) below as if it were a Lender
hereunder.
(b) Each Lender agrees (on behalf of itself and each
of its Affiliates, directors, officers, employees and
representatives) to keep confidential, in accordance with their
customary procedures for handling confidential information of
this nature and in accordance with safe and sound banking
practices, any non-public information supplied to it by Borrower
pursuant to this Agreement which is identified by Borrower as
being confidential at the time the same is delivered to the
Lenders, provided that nothing herein shall limit the disclosure
of any such information (I) to the extent required by statute,
rule, regulation or judicial process, (ii) to counsel for any of
the Lenders, (iii) to bank examiners, auditors or accountants,
(iv) to any other Lender, (v) in connection with any litigation
to which any one or more of the Lenders is a party (provided,
that each such Lender will promptly notify Borrower of such
litigation and of such proposed disclosure prior to the
disclosure of such information (unless prohibited from doing so
by the relevant court)) or (vi) to any Transferee (or prospective
Transferee) so long as such Transferee (or prospective
Transferee) first executes and delivers to the respective Lender
a Confidentiality Agreement containing substantially the term of
this Section 9.14.
SECTION 9.15 CONFLICT OF TERMS. In the event of a
conflict between the terms and provisions of this Agreement and
the terms and provisions of any of the other Loan Documents, the
terms of this Agreement shall govern; provided, however, that any
term or provision of any Collateral Document applicable to the
Collateral shall be deemed to be supplemental to, and not in
conflict with, the terms and provisions of this Agreement.
SECTION 9.16 GOVERNING LAW; SUBMISSION TO JURISDICTION.
THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA. BORROWER
HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA AND OF
ANY GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA FOR PURPOSES
OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY. BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
SECTION 9.17 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 (1) ARISING
UNDER THIS AGREEMENT, ANY NOTE OR ANY OTHER INSTRUMENT, DOCUMENT
OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION THEREWITH, OR
(2) 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, ANY NOTE 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 WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; 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.
JNF
________________
Initials
SECTION 9.18 AMENDMENT AND RESTATEMENT. This Agreement
constitutes an amendment to and a restatement in the entirety of
the Original Credit Agreement, and the obligations set forth
therein, as amended and restated hereby, continue in full force and
effect. This Agreement is not and shall not be deemed to
constitute a novation of the underlying obligations. The Original
Credit Agreement shall govern the relationship of the parties and
the Loan through the date preceding the Effective Date; from and
after the Effective Date, this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
"Borrower"
CBL & ASSOCIATES LIMITED PARTNERSHIP
By: CBL & Associates Properties, Inc.,
as General Partner
John N. Foy
By:__________________________________
Name
Title:
Joan C. Perry
Attest:__________________________________
Name
Secretary
Address for Notices:
CBL & Associates Limited Partnership
c/o CBL & Associates Properties, Inc.
One Park Place
6148 Lee Highway
Chattanooga, Tennessee 37421
Attn: President
Telecopy Number: (615) 490-8662
WITH A COPY TO:
CBL & Associates Properties, Inc.
One Park Place
6148 Lee Highway
Chattanooga, Tennessee 37421
Attn: Mary Ann Okrasinski, Esq.
Telecopy Number: (615) 490-8662
(Signatures continued on next page)
(Signatures continued from previous page)
"Lenders"
Commitment:
$30,000,000 WELLS FARGO BANK, N.A., as
successor in interest to Wells
Fargo Realty Advisors Funding,
Incorporated
Robert W. Belson
By: ______________________________
Vice President
Title:________________________
Wells Fargo Bank, N.A.
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attn: Loan Administration Manager
Telecopy Number: (770) 435-2262
WITH COPIES TO:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, California 94163
Attn: Christopher Jordan
Telecopy Number: (415) 391-2971
Wells Fargo Bank, N.A.
2030 Main Street, Suite 800
Irvine, California 92714
Attn: Debra Autry
Telecopy Number: (714) 261-0946
Troutman Sanders LLP
Suite 5200
600 Peachtree Street
Atlanta, Georgia 30308-2216
Attn: Joseph R. White, Esq.
Telecopy Number: (404) 885-3900
(Signatures continued on next page)
(Signatures continued from previous page)
Commitment:
$15,000,000 NATIONSBANK, N.A. (SOUTH),
successor by merger to
NationsBank of Georgia, N.A.
Donna Friedel
By: ______________________________
Vice President
Title:________________________
NationsBank, N.A. (South)
NationsBank Plaza
600 Peachtree Street, N.W.
Sixth Floor
Atlanta, Georgia 30308
Attn: Commercial Real Estate
Department
Telecopy Number: (404) 607-4145
(Signatures continued on next page)
(Signatures continued from previous page)
Commitment:
$25,000,000 FIRST BANK NATIONAL ASSOCIATION
Stephen P. Bailey
By: ______________________________
Vice President
Title:________________________
First Bank National Association
First Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402-4302
Attn: Real Estate Banking Division
Telecopy Number: (612) 973-0830
(Signatures continued on next page)
(Signatures continued from previous page)
Commitment:
$15,000,000 UNION BANK OF SWITZERLAND
(NEW YORK BRANCH)
Susan LeBoutillier
By: ______________________________
Vice President
Title:________________________
Union Bank of Switzerland
(New York Branch)
299 Park Avenue
New York, New York 10171
Attn: Mara Martez
Telecopy Number: (212) 821-4138
(Signatures continued on next page)
(Signatures continued from previous page)
"Agent"
WELLS FARGO BANK, N.A., as successor
in interest to Wells Fargo Realty
Advisors Funding, Incorporated, as
Agent
Robert Belson
By: ______________________________
Vice President
Title:________________________
Wells Fargo Bank, N.A.
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attn: Loan Administration Manager
Telecopy Number: (770) 435-2262
WITH COPIES TO:
Wells Fargo Bank, N.A.
420 Montgomery Street, 9th Floor
San Francisco, California 94163
Attn: Christopher Jordan
Telecopy Number: (415) 391-2971
Wells Fargo Bank, N.A.
2030 Main Street, Suite 800
Irvine, California 92714
Attn: Debra Autry
Telecopy Number: (714) 261-0946
Troutman Sanders LLP
Suite 5200
600 Peachtree Street
Atlanta, Georgia 30308-2216
Attn: Joseph R. White, Esq.
Telecopy Number: (404) 885-3900