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LOAN AGREEMENT
THIS AGREEMENT, Made and entered into as of the ___30th___ day of
_January__, 1998, by and between BURNSVILLE MINNESOTA, LLC, a Minnesota
limited liability company, and U.S. BANK NATIONAL ASSOCIATION, a national
banking association.
WITNESSETH THAT, in consideration of the mutual covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
DEFINITIONS
For the purposes of this Agreement, the following terms shall have the
following respective meanings, unless the context hereof clearly requires
otherwise:
Adjusted Eurodollar Rate: With respect to each Interest Period
applicable to a Eurodollar Rate Advance, the rate (rounded upward, if
necessary, to the next one hundredth of one percent) determined by dividing
the Eurodollar Rate for such Interest Period by 1.00 minus the Eurodollar
Reserve Percentage.
Advance: The principal amount of the Loan advanced by Lender to
or for the benefit of Borrower in accordance with the terms hereof on or
about the date hereof.
Affiliate: When used with reference to any Person, (a) each Person
that, directly or indirectly, controls, is controlled by or is under common
control with, the Person referred to, (b) each Person which beneficially owns
or holds, directly or indirectly, five percent (5%) or more of any class of
voting stock of the Person referred to (or if the Person referred to is not
a corporation, five percent [5%] or more of the equity interest), (c) each
Person, five percent (5%) or more of the voting stock (or if such Person is
not a corporation, five percent (5%) or more of the equity interest) of which
is beneficially owned or held, directly or indirectly, by the Person referred
to, and (d) each of such Person's officers, directors, joint venturers and
partners. The term control (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of the
Person in question.
Agreement: This Loan Agreement, including any amendments hereof
and supplements hereto executed by Borrower and Lender.
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Anchor Retailers: The following major retailers which each owns
land which is adjacent to the Land and have each constructed on its said
land a retail store which has been integrated with the Improvements:
(a) Dayton Hudson Corporation ( Dayton's),
(b) Dayton Hudson Corporation (Mervyn's of California),
(c) Sears Roebuck & Company,
(d) J. C. Penney Company, Inc.
Applicable Margin: With respect to:
(a) Reference Rate Advances -- 0.00%.
(b) Eurodollar Rate Advances:
(i) 0.90% through the first annual anniversary
of the date hereof, and
(ii) 0.95% thereafter.
Thus, if any Interest Period includes time both before
and after said first annual anniversary date, the
interest rate applicable thereto shall be increased by
0.05% on said first annual anniversary date.
Appraisal: A third party appraisal of the value of the Project,
commissioned by Lender and prepared at the expense of Borrower by a duly
licensed and qualified appraiser selected by Lender (e.g., Mardell, Amundson,
Johnson and Leirness, Inc.), which complies with all applicable Governmental
Requirements and the requirements of Lender and its chief review appraiser.
Board: The Board of Governors of the Federal Reserve System or
any successor thereto.
Borrower: BURNSVILLE MINNESOTA, LLC, a Minnesota limited liability
company, and its permitted successors and assigns.
Business Day: Any day (other than a Saturday, a Sunday, or a legal
holiday in the State of Minnesota) on which national banks are permitted to
be open.
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CBLH: CBL Holdings I, Inc., a Delaware corporation.
Code: The Internal Revenue Code of 1986, as amended.
Consultants: Third party experts retained by Lender to assist it
in connection with closing, advancing or administering the Loan.
Default Rate: The Default Rate of interest specified in Section
I.2.C hereof.
Environmental Audit: A written environmental review, audit,
assessment or report addressed to Lender, setting forth the results of an
investigation of the Project, including an historical investigation of the
uses and ownership of the Land, contacts with appropriate governmental
agencies and any Tests which may be requested by Lender, prepared by a
competent environmental engineer or consultant who is acceptable to Lender
and is licensed, bonded and insured in accordance with all applicable
statutes, and which otherwise complies with Lender's standard requirements
therefor.
Equipment: All fixtures, equipment and personal property owned by
Borrower and located in or on, and used in connection with the management,
maintenance or operation of, the Land and the Improvements.
Eurodollar Business Day: A Business Day which is also a day for
trading by and between banks in United States dollar deposits in the
interbank Eurodollar market and a day on which banks are open for business
in New York City.
Eurodollar Rate: With respect to each Interest Period applicable
to a Eurodollar Rate Advance, the interest rate per annum (rounded, if
necessary, to the closest one-hundredth of one percent) at which United
States dollar deposits are offered to Lender in the interbank Eurodollar
market two (2) Eurodollar Business Days prior to the first day of such
Interest Period for delivery in Immediately Available Funds on the first
day of such Interest Period and in an amount approximately equal to the
Advance to which such Interest Period is to apply as determined by Lender
and for a maturity comparable to the Interest Period; provided that, in lieu
of determining the rate in the foregoing manner, Lender may substitute the
per annum Eurodollar rate (LIBOR) for United States dollars displayed on
the LIBO page of the Reuters Monitor Money Rate Screen (hereinafter called
Reuters LIBO page).
Eurodollar Rate Advance: A portion of the Advance, in the minimum
amount of $500,000.00, with respect to which Borrower has elected, pursuant
hereto, to have the interest rate determined by reference to the Adjusted
Eurodollar Rate.
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Eurodollar Reserve Percentage: As of any day, that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by
the Board for determining the actual reserve requirement (including any
basic, supplemental or emergency reserves) for a member bank of the Federal
Reserve System, with deposits comparable in amount to those held by Lender,
in respect of "Eurocurrency Liabilities" as such term is defined in
Regulation D of the Board. The rate of interest applicable to any
outstanding Eurodollar Rate Advances shall be adjusted automatically on and
as of the effective date of any change in the Eurodollar Reserve Percentage.
GAAP: Generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as
of any date of determination, subject to any inconsistent requirements
imposed by the Securities and Exchange Commission and/or the New York Stock
Exchange.
Governmental Requirements: All laws, statutes, codes, ordinances,
and governmental rules, regulations and requirements applicable to Borrower,
Lender and the Project.
Guarantor: CBL & Associates Limited Partnership, a Delaware limited
partnership, subject to the terms, conditions and provisions of the Guaranty.
Guaranty: The guaranty of payment and performance of the
obligations of Borrower under the Loan Documents, of even date herewith,
executed by Guarantor, together with any amendments thereof or supplements
thereto executed by Guarantor and Lender.
Immediately Available Funds: Funds with good value on the day and
in the city in which payment is received.
Improvements: The buildings and improvements described on
Exhibit B attached hereto and hereby made a part hereof which are now located
upon the Land, together with any additions thereto consented to by Lender.
Indemnification Agreement: Lender's form of indemnification
agreement relating to environmental and accessibility matters of even date
herewith, covering the Project and executed by Borrower and Guarantor,
jointly and severally, in favor of Lender to secure the Loan, including any
amendments thereof and supplements thereto executed by Borrower, Guarantor
and Lender.
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Inspecting Architect: HDR Engineering, Inc. and/or any other
independent architect, engineer or consultant selected by Lender.
Interest Period: With respect to each Eurodollar Rate Advance,
the period commencing on the date of such Eurodollar Rate Advance or on the
last day of the immediately preceding Interest Period, if any, applicable to
an outstanding Eurodollar Rate Advance and ending one (1), two (2), three
(3), six (6) or twelve (12) months thereafter, as Borrower may elect in the
applicable notice or request of or for borrowing, continuation or conversion;
provided that:
(1) Any Interest Period that would otherwise end on a day
which is not a Eurodollar Business Day shall be extended to the next
succeeding Eurodollar Business Day, unless such Eurodollar Business Day falls
in another calendar month, in which case such Interest Period shall end on
the next preceding Eurodollar Business Day; and
(2) Any Interest Period that begins on the last Eurodollar
Business Day of a calendar month (or a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Eurodollar Business Day of a calendar month.
No Interest Period may end after the Maturity Date. Any payment of
a Eurodollar Rate Advance on a date other than the last day of the Interest
Period applicable thereto shall be accompanied by an additional payment in
an amount computed in accordance with Section I.10.
Land: The approximately 38.7546 acres of land legally described
on Exhibit A attached hereto and hereby made a part hereof, together with
all additions thereto, deletions therefrom and/or substitutions therefor
agreed to by Borrower and Lender.
Leases: Leases of space within the Improvements which have been
fully executed by Borrower and the tenant and are in full force and effect.
Lender: U.S. Bank National Association, a national banking
association, and its successors and assigns.
Loan: The loan of the proceeds of the Note by Lender to Borrower
in an Advance to be made pursuant to the terms of this Agreement.
Loan Documents: The documents described in Section II.2 of this
Agreement, which evidence and secure the Loan, including but not limited to
the Note, the Mortgage, this Agreement, and the Indemnification Agreement,
and
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including any amendments thereof and supplements thereto executed by
Borrower, Lender and any other party thereto.
Maturity Date: A date two (2) years after the date of this
Agreement, i.e., ___January 30___,2000.
Mortgage: The first Combination Mortgage, Security Agreement and
Fixture Financing Statement of even date herewith, covering the Project,
executed by Borrower to Lender, including any amendments thereof and
supplements thereto.
Note: The Promissory Note, of even date herewith, executed and
delivered by Borrower to Lender in the principal amount of Sixty Million
Seven Hundred Fifty Thousand and No/100ths Dollars ($60,750,000.00), to
evidence the Loan, as the same may be amended, modified or replaced from
time to time.
Operating Budget: A detailed listing of all anticipated annual
income and expenses from and for managing, maintaining and operating the
Project for its current fiscal year and for each succeeding fiscal year of
operation, prepared by Borrower or its agent and in form and substance
acceptable to Lender.
Operating Statement: A current, detailed statement of income and
expenses from and for managing, maintaining and operating the Project, in
form and substance acceptable to Lender, certified as true, correct and
complete by the member in Borrower, and expressly showing all variations
from the Operating Budget for the period covered thereby.
Permitted Encumbrances: The liens, charges and encumbrances on
title to the Project listed on Exhibit A hereto, if any.
Plans: The final working plans for the Improvements, including
drawings, specifications, details and manuals (if available).
Pollutant: Any hazardous or toxic substance, waste or material,
or other pollutant or contaminant (including but not limited to radioactive
materials, gasoline, asbestos, dioxin, radon, urea-formaldehyde and
polychlorinated biphenyls), as those terms are defined or used in any
Governmental Requirement.
Pre-Closing Requirements: The pre-closing requirements set forth
in Section II.1 hereof.
Project: The Land, the Improvements and the Equipment.
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Property Management Agreement: That certain Property Management
Agreement by and between Borrower and CBL & Associates Management, Inc.,
relating to the Project, dated as of __January 30__, 199_8_, as the same
may be amended or supplemented from time to time with the consent of Lender.
Purchase Agreement: That certain Agreement of Purchase and Sale
covering the Project and dated December 31, 1997, by and between Corporate
Property Investors, a Massachusetts business trust, as seller, and
Development Options, Inc., a Wyoming corporation, as buyer.
Purchase Price: As that term is defined in the Purchase Agreement,
i.e., $81,000,000.00.
Reference Rate: The rate of interest from time to time publicly
announced by Lender as its "reference rate". Lender may lend to its
customers at rates that are at, above or below the Reference Rate. For
purposes of determining any interest rate hereunder or under any Loan
Document which is based on the Reference Rate, such interest rate shall
change as and when the Reference Rate shall change.
Reference Rate Advance: A portion of the Advance with respect to
which the interest rate is determined by reference to the Reference Rate.
Regulatory Change: Any change after the date hereof in federal,
state or foreign laws or regulations or the adoption or making after such
date of any interpretations, directives or requirements applying to a class
of banks including Lender under any federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
Termination Date: The earlier of (a) the Maturity Date, or (b)
the date on which the Note is declared to be immediately due and payable
pursuant hereto or to the Note.
Tests: Such soil tests, water tests, chemical tests, materials
tests and other tests and analyses as are appropriately required to confirm,
with relative certainty, the absence of Pollutants from the Project.
Title Company: First American Title Insurance Company, a
California corporation.
Title Policy: A loan policy of title insurance in favor of Lender
issued by the Title Company and complying with Lender's standard requirements
therefor,
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including its requirements for reinsurance above the level of $30,000,000;
provided, however, that no zoning or usury endorsement thereto will be
required.
Transaction Documents: This Agreement, each other Loan Document
and the Guaranty.
Except as may be expressly provided to the contrary herein, all
accounting terms used herein shall be interpreted, and all accounting
determinations hereunder shall be made, in accordance with GAAP. To the
extent any change in GAAP affects any computation or determination required
to be made pursuant to this Agreement, such computation or determination
shall be made as if such change in GAAP had not occurred, unless Borrower
and Lender agree in writing on an adjustment to such computation or
determination to account for such change in GAAP. In this Agreement, in the
computation of a period of time from a specified date to a later specified
date, unless otherwise stated, the word "from" means "from and including"
and the words "to" or "until" each means "to but excluding". The words
"hereof", "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. References to Sections,
Subsections, Exhibits, schedules and like references are to this Agreement
unless otherwise expressly provided. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without
limitation". Unless the context in which used herein otherwise clearly
requires, "or" has the inclusive meaning represented by the phrase "and/or".
I. LOAN
I.1 - Principal
Lender agrees to lend to Borrower, and Borrower agrees to borrow from
Lender, the proceeds of the Loan, in accordance with the terms hereof until
the Maturity Date, for the purpose of acquiring and holding the Project;
provided, however, that the maximum amount of such proceeds which Lender
will be obligated to lend hereunder shall be the lesser of (a) seventy-five
percent (75%) of the Purchase Price, or (b) seventy-five percent (75%) of
the as-is value of the Project, as shown by the Appraisal. If Lender makes
the Advance prior to the delivery by Borrower to Lender of the Appraisal,
and if the Appraisal, when thereafter delivered, shows that the unpaid
principal balance of the Loan is more than seventy-five percent (75%) of
the as-is value of the Project, Borrower shall prepay a portion of said
principal balance, without premium or penalty (except as provided in Section
I.4 if such prepayment is applied to one [1] or more Eurodollar Rate
Advance(s) because there are not sufficient Reference Rate Advances to which
the same may be applied), to a level such that said unpaid principal balance
does not exceed seventy-five percent (75%) of said as-is value of the
Project. The Advance shall be evidenced by the Note, and
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Borrower shall give Lender written notice not later than 10:00 A.M.
(Minneapolis time) two (2) Eurodollar Business Days prior to the date of the
Advance, if Borrower desires that any portion thereof be a Eurodollar Rate
Advance. The entire unpaid principal amount of the Loan shall be deemed
payable on the Termination Date.
I.2 - Interest
Interest shall accrue and be payable as follows:
A. Each Eurodollar Rate Advance shall bear interest on the
unpaid principal amount thereof during the Interest Period applicable thereto
at a rate per annum equal to the sum of (i) the Adjusted Eurodollar Rate for
such Interest Period, plus (ii) the Applicable Margin. (If Borrower has made
no election of an interest rate option with respect to any portion of the
Advance, said portion shall be deemed to be a Reference Rate Advance.)
B. Each Reference Rate Advance shall bear interest on the
unpaid principal amount thereof at a varying rate per annum equal to the sum
of (i) the Reference Rate, plus (ii) the Applicable Margin.
C. Any portion of the Advance not paid when due, whether at
the date scheduled therefor or earlier upon acceleration, which remains
unpaid for more than ten (10) days following written notice by Lender to
Borrower thereof, shall bear interest until paid in full (i) during the
balance of any Interest Period applicable to such portion, at a rate per
annum equal to the sum of the rate applicable to such portion during such
Interest Period plus 3.0%, and (ii) otherwise, at a rate per annum equal to
the sum of (A) the Reference Rate, plus (B) the Applicable Margin for
Reference Rate Advances, plus (C) 3.0% (herein called the "Default Rate").
D. Interest shall be payable (i) on the first day of each
calendar month, commencing on the first day of ________, 1998 (pursuant to
monthly statements to be provided by Lender therefor); (ii) upon any
permitted prepayment (on the amount prepaid); and (iii) on the Termination
Date; provided that interest under Section I.2.C shall be payable on demand.
Interest on the Loan shall be computed on the basis of actual days elapsed
and a year of 360 days.
I.3 Conversions and Continuations
On the terms and subject to the limitations hereof, Borrower shall have the
option at any time and from time to time to convert all or any portion of
the Advance into Reference Rate Advances or Eurodollar Rate Advances, or to
continue a Eurodollar Rate Advance as such; provided, however that a
Eurodollar Rate Advance may be converted or continued only on the last day
of the Interest Period applicable thereto,
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and no portion of the Advance may be converted to or continued as a
Eurodollar Rate Advance if a default or an event of default has occurred and
is continuing on the proposed date of continuation or conversion. In
addition, portions of the Advance may be converted to, or continued as,
Eurodollar Rate Advances only in amounts of $500,000.00 or more, and
Borrower shall pay an administration fee to Lender in the amount of $250.00
for each such conversion or continuation. Borrower shall give Lender written
notice of any continuation or conversion of any portion of the Advance, and
such notice must be given so as to be received by the Bank not later than
10:00 A.M. (Minneapolis time) two (2) Eurodollar Business Days prior to the
requested date of conversion or continuation in the case of the continuation
of, or conversion to, a Eurodollar Rate Advance, and not later than
10:00 A.M. (Minneapolis time) on the date of the requested conversion to a
Reference Rate Advance. Each such notice shall specify (a) the amount to be
continued or converted, (b) the date for the continuation or conversion
(which must be (i) the last day of the preceding Interest Period for any
continuation or conversion of Eurodollar Rate Advances, (ii) a Eurodollar
Business Day in the case of conversions to or continuations as Eurodollar
Rate Advances, and (iii) a Business Day in the case of conversions to
Reference Rate Advances), and (c) in the case of conversions to or
continuations as Eurodollar Rate Advances, the Interest Period applicable
thereto. Any notice given by Borrower under this Section shall be
irrevocable. If Borrower shall fail to notify Lender of the continuation
of any Eurodollar Rate Advance within the time required by this Section,
such Eurodollar Rate Advance shall, on the last day of the Interest Period
applicable thereto, automatically be converted into a Reference Rate Advance
of the same principal amount. Notwithstanding anything to the contrary
herein set forth, the maximum number of Eurodollar Rate Advances which may
be outstanding at any given time shall be six (6).
I.4 Optional Prepayments.
Borrower may prepay Reference Rate Advances, in whole or in part, at any
time, without premium or penalty. Any such prepayment must be accompanied
by accrued and unpaid interest on the amount prepaid. Borrower may prepay
Eurodollar Rate Advances only on the last day of the Interest Period
applicable thereto, unless such prepayment (whether voluntary or mandatory
upon an acceleration following an event of default) is accompanied by an
additional payment in an amount computed pursuant to Section I.10 hereof,
as well as by accrued and unpaid interest on the amount prepaid. Amounts
so prepaid shall be applied against the principal installments on the Note,
if any, in the inverse order of maturity and cannot be reborrowed, unless
Lender, in its discretion, hereafter agrees to permit such reborrowing on
terms and conditions acceptable to Lender.
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I.5 Payments.
Payments and prepayments of principal of, and interest on, the Note and all
fees, expenses and other obligations under this Agreement payable to Lender
shall be made without setoff or counterclaim in Immediately Available Funds
not later than 1:00 P.M. (Minneapolis time) on the dates called for under
this Agreement and the Note to the Lender at its main office in Minneapolis,
Minnesota. Funds received after such time shall be deemed to have been
received on the next Business Day. Whenever any payment to be made
hereunder or on the Note shall be stated to be due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time, in the case of a payment of principal, shall be
included in the computation of any interest on such principal payment.
I.6 Interest Rate Not Ascertainable, Etc.
If, on or prior to the date for determining the Adjusted Eurodollar Rate in
respect of the Interest Period for any Eurodollar Rate Advance, Lender
determines (which determination shall be conclusive and binding, absent
error) that:
(a) deposits in dollars (in the applicable amount) are not being
made available to Lender in the relevant market for such Interest
Period, or
(b) the Adjusted Eurodollar Rate, as a result of an event or
change of circumstances (other than simple rate fluctuations) occurring
after the date of this Agreement, will not adequately and fairly reflect
the cost to Lender of funding or maintaining Eurodollar Rate Advances for
such Interest Period, and Borrower does not agree, in writing, to pay the
additional costs actually incurred by Lender,
Lender shall forthwith give notice to Borrower of such determination,
whereupon the obligation of Lender to make or continue, or to convert any
Advances to, Eurodollar Rate Advances shall be suspended until Lender
notifies Borrower that the circumstances giving rise to such suspension no
longer exist. While any such suspension continues, all further Advances by
Lender shall be Reference Rate Advances. No such suspension shall affect
the interest rate then in effect during the applicable Interest Period for
any Eurodollar Rate Advance outstanding at the time such suspension is
imposed.
I.7 Increased Cost.
If any Regulatory Change:
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(a) shall subject Lender to any tax, duty or other charge with
respect to its Eurodollar Rate Advances, the Note, or its obligation to
make Eurodollar Rate Advances or shall change the basis of taxation of
payment to Lender of the principal of or interest on Eurodollar Rate
Advances or any other amounts due under this Agreement in respect of
Eurodollar Rate Advances or its obligation to make Eurodollar Rate
Advances (except for changes in the rate of tax on the overall net
income of Lender imposed by the jurisdiction in which Lender's
principal office is located); or
(b) shall impose, modify or deem applicable any reserve, special
deposit, capital or similar requirement (including, without limitation,
any such requirement imposed by the Board, but excluding with respect to
any Eurodollar Rate Advance any such requirement to the extent included
in calculating the applicable Adjusted Eurodollar Rate) against assets
of, deposits with or for the account of, or credit extended by, Lender
or shall impose on Lender or on the interbank Eurodollar market any
other condition affecting its Eurodollar Rate Advances, the Note or its
obligation to make Eurodollar Rate Advances;
and the result of any of the foregoing is to increase the cost to Lender of
making or maintaining any Eurodollar Rate Advance, or to reduce the amount
of any sum received or receivable by Lender under this Agreement or under
the Note, then, within thirty (30) days after demand by Lender, Borrower
shall pay to Lender such additional amount or amounts as will compensate
Lender for such increased cost or reduction; provided, however, that
Borrower shall not be required to so compensate Lender for any such
increased cost or reduction which occurred, accrued or was incurred with
respect to any period more than six (6) months prior to the date of said
demand. Lender will promptly notify Borrower of any event of which it has
knowledge, occurring after the date hereof, which will entitle Lender to
compensation pursuant to this Section. A certificate of Lender claiming
compensation under this Section, setting forth the additional amount or
amounts to be paid to it hereunder and stating in reasonable detail the
basis for the charge and the method of computation, shall be conclusive in
the absence of error. In determining such amount, Lender may use any
reasonable averaging and attribution methods. Failure on the part of Lender
to demand compensation for any increased costs or reduction in amounts
received or receivable with respect to any Interest Period shall not
constitute a waiver of Lender's rights to demand compensation for any
increased costs or reduction in amounts received or receivable in any
subsequent Interest Period.
I.8 Illegality
If any Regulatory Change shall make it unlawful or impossible for Lender to
make, maintain or fund any Eurodollar Rate Advances, Lender shall notify
Borrower,
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whereupon the obligation of Lender to make or continue, or to
convert any Advances to, Eurodollar Rate Advances shall be suspended until
Lender notifies Borrower that the circumstances giving rise to such
suspension no longer exist. If Lender determines that it may not lawfully
continue to maintain any Eurodollar Rate Advances to the end of the
applicable Interest Periods, all of the affected Advances shall be
automatically converted to Reference Rate Advances as of the date of
Lender's notice, and upon such conversion Borrower shall indemnify Lender
in accordance with Section I.10, unless the unlawfulness thereof results
from conduct of Lender, other than conduct in conformance with the terms
hereof, which causes said Advance (which would otherwise be lawful) to
become unlawful.
I.9 Capital Adequacy
In the event that any Regulatory Change reduces or shall have the effect of
reducing the rate of return on Lender's capital or the capital of its parent
corporation (by an amount Lender deems material) as a consequence of the Loan
to a level below that which Lender or its parent corporation could have
achieved but for such Regulatory Change (taking into account Lender's
policies and the policies of its parent corporation with respect to capital
adequacy), then Borrower shall, within ten (10) days after written notice
and demand from Lender, pay to Lender additional amounts sufficient to
compensate Lender or its parent corporation for such reduction. Any
determination by Lender under this Section and any certificate as to the
amount of such reduction given to Borrower by Lender shall be final,
conclusive and binding for all purposes, absent error.
I.10 Funding Losses; Eurodollar Rate Advances
Borrower shall compensate Lender, upon its written request, for all actual
losses, expenses and liabilities (including any interest paid by Lender to
lenders of funds borrowed by it to make or carry Eurodollar Rate Advances to
the extent not recovered by Lender in connection with the re-employment of
such funds and including loss of anticipated profits) which Lender may
sustain: (i) if for any reason, other than a default by Lender, a funding
of a Eurodollar Rate Advance does not occur on the date specified therefor
in the Borrower's request or notice as to such Eurodollar Rate Advance
hereunder, or (ii) if, for whatever reason (including, but not limited to,
acceleration of the maturity of the principal balance of the Loan following
an event of default), any repayment of a Eurodollar Rate Advance, or a
conversion pursuant to Section I.8, occurs on any day other than the last
day of the Interest Period applicable thereto. Lender's request for
compensation shall set forth the basis for the amount requested and shall be
final, conclusive and binding, absent error.
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I.11 Discretion of Lender as to Manner of Funding
Lender shall be entitled to fund and maintain its funding of Eurodollar Rate
Advances in any manner it may elect, it being understood, however, that for
the purposes of this Agreement all determinations hereunder (including, but
not limited to, determinations under Section I.10, but excluding
determinations that Lender may elect to make from the Reuters Screen LIBO
page) shall be made as if the Bank had actually funded and maintained each
Eurodollar Rate Advance during the Interest Period for such Advance through
the purchase of deposits, having a maturity corresponding to the last day of
the Interest Period and bearing an interest rate equal to the Eurodollar Rate
for such Interest Period. Borrower shall not be obligated to compensate
Lender for any losses suffered by Lender as a result of its election not to
actually so maintain and fund any Eurodollar Rate Advance during the
Interest Period for such Eurodollar Rate Advance.
II. CONDITIONS OF BORROWING
Lender shall not be required to make the Advance hereunder until the pre-
closing requirements, conditions and other requirements set forth below have
been completed and fulfilled to the satisfaction of Lender, at Borrower's
sole cost and expense. It is agreed, however, that Lender may, in its
discretion, make the Advance prior to completion and fulfillment of any or
all of such pre-closing requirements, conditions and requirements, without
waiving its right to thereafter require such completion and fulfillment.
II.1 - Pre-Closing Requirements
At least ten (10) days prior to the closing of the Loan, Borrower shall
provide to Lender each of the following, in form and substance acceptable
to Lender:
A. A commitment for the Title Policy or a preliminary title
report from the Title Company, complying with Lender's
standard requirements therefor, together with two (2) copies
of each document referred to therein.
B. Two (2) complete sets of the Plans (if and to the extent
available).
C. Two (2) copies of any existing, recorded subdivision plat
affecting the Land.
D. Evidence of access to the Project by dedicated streets or by
insurable recorded easements.
-14-
E. Four (4) copies of a current, certified, as built ALTA/ACSM
LAND TITLE SURVEY of the Project, which shall also be prepared
in accordance with Lender's standard requirements therefor.
F. Soil reports on the Land, showing that the soil will
adequately support the Improvements (if and to the extent
available).
G. An Environmental Audit showing that no Pollutant is present
above, on, in or under the Project, and all reports, data and
other information produced in connection with the Tests. The
Environmental Audit shall also specify whether or not any
environmental assessment, study or statement with respect to
the Project is required by any Governmental Requirement. If
such an assessment, study or statement is so required,
Borrower shall provide a copy thereof to Lender, and, if none
is so required, Borrower shall provide Lender with an
appropriate declaration of environmental nonsignificance
relating to the Project, if available in the jurisdiction in
which the Project is located.
H. A written report or certification from the Inspecting Architect
or from another qualified Consultant stating that the Project,
as built, is structurally sound and in good physical condition
as when new, ordinary wear and tear of reasonable use
excepted; that all mechanical, electrical, plumbing, utility
and other systems thereof are in proper working order; and
that the Project complies with all applicable Governmental
Requirements relating to the accessibility thereof to
disabled, handicapped and physically challenged persons,
including but not limited to the Americans With Disabilities
Act of 1991.
I. Insurance policies and/or certificates of insurance written
by insurers satisfactory to Lender and in amounts satisfactory
to Lender, prepared in accordance with Lender's standard
requirements therefor.
J. A flood zone certification from First American Flood Data
Services, Inc. (or another Consultant acceptable to Lender),
indicating that the Project is not located in a flood plain
or any other flood prone area, as designated by any
governmental agency; provided, however, that if the Project
is so located, Borrower shall obtain and deliver to Lender
evidence of flood insurance acceptable to Lender.
-15-
K. A letter addressed to Lender from an appropriate municipal
officer regarding zoning and building code compliance,
prepared in accordance with Lender's standard form therefor.
L. A fully executed copy of the Purchase Agreement, together
with (i) a true, correct and complete copy of each document
and item relating to the Project which Borrower is entitled
to receive from the seller thereunder; and (ii) a fully
executed copy of the assignment of the buyer's interest
thereunder to Borrower.
M. The Appraisal.
N. UCC chattel lien searches from the appropriate offices in
Dakota County, Minnesota, and Hamilton County, Tennessee,
and from the offices of the Secretaries of State of Minnesota
and Tennessee, covering the name of Borrower and of Guarantor.
O. Copies of all Leases which Lender shall request after
reviewing a rent roll for the Project, including all exhibits,
amendments and assignments thereto and thereof.
P. A copy of Borrower's Operating and/or Member Control Agreement
(certified by its member as being true, correct, complete,
unamended and in full force and effect) and a copy of
Borrower's Articles of Organization and a Certificate of
Good Standing for Borrower (each certified by the Secretary
of State of Minnesota), together with evidence, satisfactory
to Lender, that Borrower has complied with all other filing
requirements and fictitious name requirements, if any,
necessary to permit Borrower to do business in the State of
Minnesota, and evidence, satisfactory to Lender, that Borrower
has complied with the above-mentioned documents in executing
the Loan Documents.
Q. A copy of the Limited Partnership Agreement of Guarantor
(certified by its general partner as being true, correct,
complete, unamended and in full force and effect); a copy of
Guarantor's Certificate of Limited Partnership and a
Certificate of Good Standing for Guarantor, each currently
certified by the Delaware Secretary of State; and a
Certificate of Authority and a Certificate of Good Standing
for Guarantor, each certified by the Secretary of the State
of Minnesota, together with evidence, satisfactory to Lender,
that Guarantor has complied with all other filing requirements
and fictitious name requirements, if any, necessary to permit
Guarantor to do business in the State of Minnesota,
-16-
and evidence, satisfactory to Lender, that Guarantor has
complied with the above-mentioned documents in executing the
Guaranty and the Indemnification Agreement.
R. A copy of the Certificate or Articles of Incorporation of
CBLH, the general partner in Guarantor, and a Certificate of
Good Standing for CBLH, each currently certified by the
Secretary of State of Delaware; copies of CBLH's Bylaws,
Resolutions of CBLH's Board of Directors authorizing the
transactions described herein and an incumbency certificate,
all currently certified by CBLH's corporate Secretary; and a
Certificate of Authority and a Certificate of Good Standing
for CBLH, each certified by the Secretary of State of
Minnesota.
S. A standard form of lease to be used by Borrower in leasing
space within the Project.
T. A rent roll for the Project, current as of the date of closing
of the Loan.
U. A certificate of occupancy, issued by the City of Burnsville,
Minnesota, covering the Improvements and each leased space
therein (if available).
V. A copy of each noncancellable agreement relating to the
management, operation or maintenance of the Project and of
each such agreement which cannot be cancelled by thirty (30)
days' or less notice, including the Property Management
Agreement.
W. A copy of each Reciprocal Easement and Operating Agreement
and/or Development Agreement which affects the Project.
X. An Operating Budget for the Project for 1998.
Y. The most current available financial statements of Borrower
and of Guarantor, as well as financial statements of each of
said parties for each of the three (3) full fiscal years of
said party immediately preceding the time period covered by
said current financial statements (if available), together
with copies of all federal income tax returns (with all
supporting schedules) of each of said parties for their three
(3) most recent fiscal years (if available), all signed and
certified as true, correct and complete by the party to which
they apply. If any such party is not an
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individual person, said financial statements must also be
certified by an independent certified public accountant of
recognized standing acceptable to Lender.
Z. A proforma, projected Operating Statement for the Project for
1998.
AA. Information concerning current ad valorem property taxes and
special assessments to which the Project is subject, including
copies of tax statements, tax parcel number(s) and payment
dates, as well as Borrower's Federal Taxpayer Identification
Number.
BB. A copy of each existing marketing report relating to the
Project.
CC. Evidence acceptable to Lender that each of the four (4) Anchor
Retailers (i) is in possession of its retail store which has
been integrated with the Project; and (ii) is operating the
same as a retail store in compliance with all applicable
Operating Agreements, together with evidence acceptable to
Lender that no default exists thereunder.
DD. Other agreements, documents and exhibits relating to the above
requirements which may be required, in Lender's judgment, to
assure compliance with all requirements of this Agreement.
II.2 - Loan Documents
On or before the date of closing of the Loan, Borrower shall execute and
deliver (or cause to be executed and delivered) to Lender this Agreement
and the following other documents in form and substance acceptable to
Lender and to its counsel, to evidence and secure the Loan:
A. The Note.
B. The Mortgage.
C. A general assignment of all leases of and rents and income
from the Project.
D. A first security interest in all Equipment and in all of
Borrower's intangible property relating to the Project, created
and evidenced by a security agreement (which may be
incorporated within the Mortgage) and by appropriate Uniform
Commercial Code financing statements.
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E. The Indemnification Agreement.
F. The Guaranty.
G. A sworn statement from and agreement by Borrower listing all
guarantees and contingent liabilities to which Borrower is a
party or for which Borrower may be liable and agreeing to
periodically update said listing, to which sworn statement
shall be attached current financial statements of Borrower and
of Guarantor, which shall be, in such sworn statement,
certified and sworn to by the party to which they relate as
being true, correct, complete and not misleading in any
material respect, and each such party shall also, in such
sworn statement, certify that there has been no material
change in the financial status of said party since the date
thereof.
H. Subordination, non-disturbance and attornment agreements
executed by Borrower, by each tenant of the Project which
pays more than $75,000.00 per year in rent (hereinafter called
"Large Tenant"), and by Lender.
I. A tenant estoppel letter or certificate signed by each Large
Tenant.
J. A current, certified rent roll for the Project.
K. An assignment of the Property Management Agreement and a
limited subordination of the rights of CBL & Associates
Management, Inc. thereunder to the rights of Lender under
the other Loan Documents.
L. Such other documents as Lender may reasonably require to
evidence and secure the Loan.
Lender may designate which of the Loan Documents are to be placed of
record, the order of recording thereof, and the offices in which the
same are to be recorded. Borrower shall pay all documentary, recording
and/or registration taxes and/or fees, if any, due upon the Loan Documents.
II.3 - Title Insurance
Lender shall have received the Title Policy, or the Title Company shall
have modified and initialled the commitment therefor in a manner acceptable
to Lender.
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II.4 - Opinion of Borrower's Attorneys
Lender shall have received from counsel for Borrower and/or Lender a current
written opinion, in scope, form and substance acceptable to Lender.
II.5 - Purchase Price
Lender shall have received a copy of the signed closing statement relating
to Borrower's acquisition of the Project, together with evidence acceptable
to Lender, that Borrower has paid, or has arranged to pay, the Purchase
Price, plus all closing costs which are the obligation of Borrower under
the Purchase Agreement, to the extent that the aggregate total thereof
exceeds $60,750,000.00.
II.6 - Origination Fee
Borrower shall have paid to Lender an origination fee in the amount of
$182,250.00 in Immediately Available Funds.
III. [INTENTIONALLY OMITTED]
IV. REPRESENTATIONS AND WARRANTIES OF BORROWER
Borrower represents and warrants to Lender that:
IV.1 - Legal Status of Borrower
Borrower is a limited liability company duly organized, validly existing and
in good standing under the laws of the State of Minnesota, and has all power,
authority, permits, consents, authorizations and licenses necessary to carry
on its business, to own and operate the Project and to execute, deliver and
perform this Agreement and the other Loan Documents; Guarantor is the sole
member in Borrower; all consents of said member necessary to authorize the
execution, delivery and performance of this Agreement and of the other Loan
Documents which have been or are to be executed by and on behalf of Borrower
have been duly obtained and are in full force and effect; this Agreement and
such other Loan Documents have been duly authorized, executed and delivered
by and on behalf of Borrower so as to constitute this Agreement and such
other Loan Documents the valid and binding obligations of Borrower,
enforceable in accordance with their terms; and Borrower has complied with
all applicable assumed and/or fictitious name requirements of the state in
which it is organized.
-20-
IV.2 - Title
Borrower is the owner, in fee simple, of the Land and of the Improvements and
the Equipment now located on the Land, subject to no lien, charge, mortgage,
deed of trust, restriction or encumbrance, except Permitted Encumbrances.
IV.3 - No Breach of Applicable Agreements or Laws
The consummation of the transactions contemplated hereby and the execution,
delivery and/or performance of this Agreement and the other Loan Documents
will not result in any breach of or constitute a default under any mortgage,
deed of trust, lease, bank loan, credit agreement, or other instrument or,
to the best of Borrower's knowledge, violate any Governmental Requirements,
to which Borrower is a party, or by which Borrower may be bound or affected.
Borrower and its member have been formed in accordance with all applicable
federal and state securities laws and regulations, and there are no pending
or threatened claims against Borrower or its member alleging a violation of
any securities law or regulation.
IV.4 - No Litigation or Defaults
There are no actions, suits or proceedings pending or, to the knowledge of
Borrower, threatened against or affecting Borrower, Guarantor or the
Project, which will have a material adverse impact upon Borrower, Guarantor
or the Project, except as listed on Exhibit E attached hereto and hereby
made a part hereof, or involving the validity or enforceability of the Loan
Documents or the priority of the lien thereof, at law or in equity; and,
to the best of Borrower's knowledge, neither Borrower nor Guarantor is in
default under any order, writ, injunction, decree or demand of any court or
any administrative body having jurisdiction over Borrower or Guarantor.
IV.5 - Financial and Other Information
The financial statements of Borrower and of Guarantor previously or
hereafter delivered to Lender fairly and accurately present, or will fairly
and accurately present, the financial condition of Borrower and of
Guarantor, as of the dates of such statements, and neither this Agreement
nor any document, financial statement, financial or credit information,
certificate or statement referred to herein or furnished to Lender by
Borrower or Guarantor contains, or will contain, any untrue statement of a
material fact or omits, or will omit, a material fact, or is or will be
misleading in any material respect.
-21-
IV.6 - No Defaults under Loan Documents or Other Agreements
There is, and, until Lender has been fully repaid the entire indebtedness
evidenced or to be evidenced by the Note, there will be, no default or
event of default on the part of Borrower or Guarantor under the Loan
Documents or under any other document to which Borrower or Guarantor is a
party and which relates to the acquisition, ownership, occupancy, use or
management of the Project; and Borrower is not and will not be in default
in the payment of the principal or interest on any of its indebtedness for
borrowed money, and is not and will not be, in default under any instrument
or agreement under and subject to which any indebtedness for borrowed money
has been issued or is secured, and no event has occurred, or will occur,
which, with the lapse of time or the giving of notice or both, would
constitute an event of default thereunder; and Guarantor is not, on the
date of this Agreement, in default in the payment of the principal or
interest on any of its recourse indebtedness for borrowed money; provided,
however, that no breach of the foregoing representations and warranties
shall be deemed to exist with respect to any alleged default so long as
Borrower (or Guarantor) is diligently contesting the existence of said
alleged default in good faith by appropriate legal proceedings. Guarantor
shall give Lender prompt written notice of any default by it under any
nonrecourse obligation, but no such default shall be deemed to be a breach
of the foregoing representations or warranties.
IV.7 - Boundary Lines; Conformance with Governmental Requirements and
Restrictions
To the best of Borrower's knowledge, the exterior lines of the Improvements
are, and at all times will be, within the boundary lines of the Land, and
Borrower has examined and is familiar with all applicable covenants,
conditions, restrictions and reservations, and with all applicable
Governmental Requirements, including but not limited to building codes and
zoning, environmental, hazardous substance, energy and pollution control
laws, ordinances and regulations affecting the Project, and the Project
will, to the best of Borrower's knowledge, in all respects conform to and
comply with said covenants, conditions, restrictions, reservations and
Governmental Requirements.
IV.8 - Single Asset Entity
Borrower is a single-asset entity, the only property owned by which is the
Project.
IV.9 Guarantor
Guarantor is a limited partnership duly organized, validly existing and in
good standing under the laws of the State of Delaware, and has all power,
authority, permits, consents, authorizations and licenses necessary to carry
on its business,
-22-
and to execute, deliver and perform the Guaranty, the Indemnification
Agreement and any other Loan Documents which it is required to execute; the
sole general partner in Guarantor is CBLH; all consents of general and/or
limited partners in Guarantor necessary to authorize the execution, delivery
and performance of the Guaranty, the Indemnification Agreement and such other
Loan Documents have been duly obtained and are in full force and effect; the
Guaranty, the Indemnification Agreement and such other Loan Documents have
been duly authorized, executed and delivered by and on behalf of Guarantor
so as to constitute the Guaranty, the Indemnification Agreement and such
other Loan Documents the valid and binding obligations of Guarantor,
enforceable in accordance with their terms; and Guarantor has complied
with all applicable assumed and/or fictitious name requirements of the
state in which it is organized and of the state in which the Project is
located.
IV.10 - CBLH
CBLH is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all power, authority,
permits, consents, authorizations and licenses necessary to carry on its
business, and to execute, deliver and perform, on behalf of Guarantor, as
the sole general partner therein, the Guaranty, the Indemnification Agreement
and any other Loan Documents which Guarantor is required to execute; all
resolutions of the directors and/or shareholders of CBLH necessary to
authorize said execution, delivery and performance of the Guaranty, the
Indemnification Agreement and such other Loan Documents have been duly
adopted and are in full force and effect; and the Guaranty, the
Indemnification Agreement and such other Loan Documents have been duly
authorized, executed and delivered by and on behalf of CBLH, as the sole
general partner in Guarantor, so as to constitute the Guaranty, the
Indemnification Agreement and such other Loan Documents the valid and
binding obligations of Guarantor, enforceable in accordance with their
terms.
IV.11 - Purchase Agreement
The Purchase Agreement is in full force and effect and has not been
terminated, cancelled, modified or amended, subject to the provisions
thereof which provide for the merger thereof into the deed to Borrower
(with certain limited exceptions) upon the execution and delivery of said
deed. To the best of Borrower's knowledge, all representations and
warranties of Borrower and of the seller set forth therein are true,
correct and complete on the date hereof.
IV.12 - Anchor Retailers
All four (4) Anchor Retailers are in possession of and are operating their
respective retail stores, which have been integrated with the Project, as
retail stores in compliance with any and all Operating Agreements applicable
thereto.
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IV.13 - Miscellaneous
Borrower is not
A. Engaged principally or as one of its important activities in
the business of extending credit for the purpose of purchasing
or carrying margin stock (as defined in Regulation U of the
Board), and the value of all margin stock owned by Borrower
does not constitute more than twenty-five percent (25%) of the
value of the assets of Borrower.
B. An "investment company" or a company "controlled" by an
investment company within the meaning of the Investment
Company Act of 1940, as amended.
C. A "holding company" or a "subsidiary company" of a holding
company or an "affiliate" of a holding company or a subsidiary
company of a holding company within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
V. COVENANTS OF BORROWER
While this Agreement is in effect, and until Lender has been paid in full the
principal of and interest on all advances made by Lender hereunder and under
the other Loan Documents:
V.1 - Paying Costs of Project and Loan
Borrower shall pay and discharge, prior to delinquency, all taxes,
assessments and other governmental charges upon the Project, as well as all
claims for labor and materials which, if unpaid, might become a lien or
charge upon the Project; provided, however, that Borrower shall have the
right to bond off, to remove or to contest the amount, validity and/or
applicability of any of the foregoing in strict accordance with the terms of
the Mortgage.
Borrower shall also pay all third-party costs and expenses of Lender and all
costs and expenses of Borrower in connection with the Project, the
preparation and review of the Loan Documents and the evaluation, making,
closing, administration and/or repayment of the Loan, including but not
limited to the reasonable fees of Lender's attorneys (including Minnesota
counsel), fees of the Inspecting Architect and Consultants (including fees
for preparation and amendment of the Environmental Audit), appraisal fees,
an internal appraisal review fee of up to $2,500.00, administration fees,
title insurance costs, disbursement expenses, and all other costs and
expenses payable to third parties incurred by Lender or Borrower in
connection
-24-
with the Loan. Such costs and expenses shall be so paid by Borrower
whether or not the Loan is fully advanced.
V.2 - Using Loan Proceeds
Borrower shall use the Loan proceeds solely to pay, or to reimburse Borrower
for paying, a portion of the Purchase Price.
V.3 - Keeping of Records
Borrower shall set up and maintain accurate and complete books, accounts and
records in the ordinary course of business pertaining to the Project in a
manner reasonably acceptable to Lender. Borrower will permit the Inspecting
Architect to have free access to and to inspect and copy all books, records
and contracts (except as herein expressly provided) of Borrower relating to
acquisition and operation of the Project, and will permit representatives of
Lender to have free access to and to inspect and copy all books, records and
contracts (except as herein expressly provided) of Borrower. Any such
inspection by Lender and/or the Inspecting Architect shall be for the sole
benefit and protection of Lender, and Lender shall have no obligation to
disclose the results thereof to Borrower or to any third party, unless Lender
elects to take some action against Borrower (or Guarantor) under the Loan
Documents as a result thereof, in which event Lender shall notify Borrower
(and Guarantor) of said results.
V.4 - Providing Financial Information
Borrower shall furnish such financial information concerning Borrower,
Guarantor and the Project as Lender may request, and shall furnish to Lender
(a) quarterly financial statements (including a balance sheet, income
statement and change in financial condition statement) for Borrower and
Guarantor (consolidated), if prepared in the ordinary course of its business,
within forty-five (45) days following the end of each fiscal quarter thereof,
(b) current annual financial statements (including a balance sheet, income
statement and change in financial condition statement) for Borrower and
Guarantor (consolidated) within ninety (90) days following the end of each
fiscal year thereof, (c) copies of the filed federal income tax returns (with
all supporting schedules) of Borrower and Guarantor due during the term of
the Loan within fifteen (15) days after receipt of a written request
therefor from Lender, and (d) upon receipt of a written request therefor
from Lender, quarterly written reports (i) setting forth any new direct
indebtedness, obligations or liabilities incurred by Borrower since the date
hereof (or the date of the last such written report after the first such
written report is so provided) ("Report Date"), and (ii) confirming that the
Exhibit to the Sworn Statement and Agreement Concerning Guarantees,
Contingent Liabilities and Financial Statements of even date herewith,
executed by Borrower and Guarantor to Lender, which lists Borrower's
Guarantees
-25-
and Contingent Liabilities, as that term is defined in said Sworn
Statement, remains a true, correct, complete and fully representative list
of Borrower's Guarantees and Contingent Liabilities, or amending said
Exhibit to reflect any additions to, subtractions from or changes in such
Guarantees and Contingent Liabilities since the last Report Date, so long as
any portion of the indebtedness evidenced by the Note is unpaid. All such
financial statements shall be in reasonable detail, shall be prepared for
partnerships and corporations in accordance with GAAP and for individuals
in accordance with accounting principles consistently applied, shall be
certified by the party to which they apply as true, correct and complete,
and, with respect to annual statements of partnerships and corporations,
shall be audited by a certified public accountant of recognized standing
acceptable to Lender. With respect to Guarantor's financial statements,
copies of Form 10-Q (covering each fiscal quarter of Guarantor) filed by
Guarantor with the Securities and Exchange Commission shall satisfy the
requirements relating to Guarantor's quarterly financial statements set
forth above, and copies of Guarantor's Form 10-K (covering each fiscal year
of Guarantor) so filed by Guarantor shall satisfy the requirements relating
to Guarantor's annual financial statements set forth above. In addition,
Borrower shall also provide to Lender such other information regarding the
business, operation and financial condition of Borrower, Guarantor and the
Project as Lender may request and shall permit Lender to examine all of
Borrower's books and records pertaining thereto.
V.5 - Providing Operating Budgets and Operating Statements
Borrower shall deliver to Lender prior to the commencement of each fiscal
year of the Project, an Operating Budget for the Project for such fiscal year
of the Project. In addition, Borrower shall, by the fifteenth (15th) day of
each calendar month (or within fifteen [15] days after the end of each fiscal
quarter of the Project, at Lender's option), deliver to Lender an Operating
Statement for the Project for the preceding full or partial calendar month
(or fiscal quarter), which shall specifically note all variations from the
current Operating Budget. Borrower shall also deliver to Lender an annual
Operating Statement for the Project within ninety (90) days following the
end of each fiscal year thereof. All such Operating Statements shall be
certified as true, correct and complete by Borrower.
V.6 - Providing Leasing Information
Borrower shall not enter into, amend or modify any lease covering 7,500 or
more square feet of space in the Project (hereinafter called a "Major
Lease") without Lender's prior written consent, shall not enter into any
other lease of space in the Project unless entered in good faith, in a
commercially reasonable manner and in substantially the form of lease
previously provided to and approved by Lender, shall not amend or modify
any such other lease except in good faith and in a commercially reasonable
manner, and shall furnish to Lender, upon execution, a
-26-
fully executed copy of each lease entered into by Borrower covering space
in the Project, together with all exhibits and attachments thereto and all
amendments and modifications thereof. Borrower shall provide Lender with a
copy of each proposed Major Lease (and of each other nonconforming lease) and
with financial information on the proposed tenant (if such financial
information is expressly requested by Lender) to aid Lender in determining
whether it will consent thereto. Unless Lender expressly refuses to consent
to a proposed Major Lease (or other nonconforming lease) by written notice to
Borrower within ten (10) Business Days after receipt from Borrower of a
copy thereof and a request for such consent, Lender shall be deemed to have
approved the same. Lender may declare each such lease to be prior or
subordinate to the Mortgage, at Lender's option. Borrower shall provide to
Lender a quarterly rent roll for, and a leasing status report on, the
Project, showing the names of all lessees, the areas leased, the major
terms of all leases, all letters of intent or agreements to lease, and all
prospective tenants with which written contacts have been made or with which
written negotiations for a lease have commenced, within thirty (30) days
after the end of each fiscal quarter of the Project.
V.7 - Maintaining Insurance Coverage
Borrower shall, at all times until Lender has been fully repaid all
indebtedness evidenced by the Note, maintain, or cause to be maintained, in
effect (and shall furnish to Lender copies of), insurance policies, as
required under the terms of Exhibit D attached hereto and hereby made a part
hereof, and shall furnish to Lender proof of payment of all premiums for such
insurance.
V.8 - Transferring, Conveying or Encumbering the Property
Borrower shall not voluntarily or involuntarily agree to, cause, suffer or
permit (a) any sale, transfer or conveyance of any interest of Borrower,
legal or equitable, in the Project or any part or portion thereof; or (b)
any mortgage, pledge, encumbrance or lien to be imposed or remain outstanding
against the Project, or any security interest to exist therein, except as
created by the Loan Documents, and except Permitted Encumbrances, without, in
each instance, the prior written consent of Lender, unless the same is being
contested in accordance with the provisions of the Mortgage. No addition to,
withdrawal of or other change in the member of Borrower, or any sale or
transfer of, or change in the ownership of, any membership interest in
Borrower, shall be permitted without Lender's prior written consent. Any
provision of this Agreement or of any other Loan Document to the contrary
notwithstanding, reapportionments and transfers of beneficial interests in
Borrower and Guarantor shall be permitted without prior review or consent of
Lender, so long as at least fifty-one percent (51%) in the aggregate of the
membership interest in Borrower and of the general partnership interest in
Guarantor shall be held by CBLH and/or its affiliates, subsidiaries and key
officers.
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V.9 - Complying with the Loan Documents and Other Documents
Borrower shall comply with and perform all of its agreements and obligations
under the Purchase Agreement, under the Loan Documents and under all other
contracts and agreements to which Borrower is a party relating to the
acquisition, ownership, occupancy, use or management of the Project, and
shall comply with all requests by Lender which are consistent with the terms
thereof.
V.10 - Miscellaneous
Borrower shall also:
A. Maintain its limited liability company existence in good
standing under the laws of the State of Minnesota and its
qualification to transact business in each other jurisdiction
where failure so to qualify would permanently preclude
Borrower from enforcing its rights with respect to any
material asset or would expose Borrower to any material
liability.
B. File all tax returns and reports which are required by law to
be filed by it and will pay before they become delinquent all
taxes, assessments and governmental charges and levies imposed
upon it and all claims or demands of any kind which, if
unpaid, might result in the creation of a lien upon its
property; provided that the foregoing items need not be paid if
they are being contested in good faith by appropriate
proceedings (and in accordance with the terms of the Mortgage,
if such taxes or assessments relate to the Project), and as
long as Borrower's title to its property is not materially
adversely affected, its use of such property in the ordinary
course of its business is not materially interfered with and
adequate reserves with respect thereto have been set aside on
Borrower's books in accordance with GAAP.
C. Give prompt written notice to Lender of the commencement of any
action, suit or proceeding before any court or arbitrator or
any governmental department, board, agency or other
instrumentality affecting Borrower, Guarantor or any property
of Borrower or to which Borrower or Guarantor is a party in
which an adverse determination or result could have a material
adverse effect on the business, operations, property or
condition (financial or otherwise) of Borrower or Guarantor or
on the ability of Borrower or Guarantor to perform its
obligations under this Agreement, the other Loan Documents or
the Guaranty, stating the nature and status of such action,
suit or proceeding.
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D. Remain a single asset entity, the only property owned by which
shall be the Project.
V.11 - Underground Tank Upgrade.
On or before December 22, 1998, Borrower shall upgrade the two (2) 25,000
gallon underground fuel oil storage tanks located within the Project as
required under applicable federal and state laws and regulations. Upon
completion of the upgrading, but not later than December 22, 1998, Borrower
shall deliver to Lender a certificate, signed by Borrower and an
environmental Consultant acceptable to Lender in its reasonable discretion,
certifying that said tanks have been so upgraded.
VI. DEFAULTS
VI.1 - Events of Default
Any of the following events shall constitute an event of default under this
Agreement:
a. Borrower shall default in the payment of principal due
according to the terms hereof or of the Note, which default
in any such case is not cured within ten (10) days following
delivery of notice thereof by Lender to Borrower.
b. Borrower shall default in the payment of interest due
hereunder or under the Note, or in the payment of fees or
any other amounts payable hereunder, under the Note or under
any of the other Loan Documents, which default in any such
case is not cured within ten (10) days following delivery of
notice thereof by Lender to Borrower.
c. Borrower shall default in the performance or observance of
any other agreement, covenant or condition required to be
performed or observed by Borrower under the terms of this
Agreement, which default is not cured within thirty (30) days
following delivery of written notice thereof by Lender to
Borrower; provided that in the event such default cannot be
cured in the exercise of reasonable diligence within said
thirty (30) day period, Borrower shall have such additional
time as shall be reasonably necessary to cure the same (not
to exceed sixty [60] days beyond said initial thirty [30] day
period), provided said cure is commenced within said initial
thirty (30) day period and is thereafter diligently pursued to
completion.
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d. Any representation or warranty made by Borrower or Guarantor
in this Agreement, in any of the other Loan Documents, or in
any certificate or document furnished under the terms of this
Agreement or in connection with the Loan, shall be untrue or
incomplete in any material respect, and Borrower shall fail
to correct the factual inaccuracy therein within thirty (30)
days following delivery by Lender to Borrower of written
notice thereof.
e. An event of default shall exist under the terms of any other
Loan Document or the Guaranty.
f. Borrower or Guarantor shall become insolvent or shall commit
an act of bankruptcy; or shall apply for, consent to or permit
the appointment of a receiver, custodian, trustee or
liquidator for it or any of its property or assets; or shall
fail to, or admit in writing its inability to, pay its debts
as they mature; or shall make a general assignment for the
benefit of creditors or shall be adjudicated bankrupt or
insolvent; or shall take other similar action for the benefit
or protection of its creditors; or shall give notice to any
governmental body of insolvency or pending insolvency or
suspension of operations; or shall file a voluntary petition
in bankruptcy or a petition or an answer seeking
reorganization or an arrangement with creditors, or to take
advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, rearrangement, dissolution, liquidation
or other similar debtor relief law or statute; or shall file
an answer admitting the material allegations of a petition
filed against it in any proceeding under any such law or
statute; or shall be dissolved, liquidated, terminated or
merged; or shall effect a plan or other arrangement with
creditors; or a trustee, receiver, liquidator or custodian
shall be appointed for it or for any of its property or
assets and shall not be discharged within sixty (60) days
after the date of his appointment; or a petition in
involuntary bankruptcy or similar proceedings is filed
against it and is not dismissed within sixty (60) days after
the date of its filing.
g. A judgment or judgments for the payment of money in excess
of the sum of $200,000.00 in the aggregate shall be rendered
against Borrower, and Borrower shall not discharge the same or
provide for its discharge in accordance with its terms, or
procure a stay of execution thereof, prior to any execution
on such judgment by the judgment creditor, within one hundred
twenty (120) days
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from the date of entry thereof, and within said period of one
hundred twenty (120) days, or such longer period during which
execution of such judgment shall be stayed, appeal therefrom
and cause the execution thereof to be stayed during such
appeal.
h. The maturity of any material indebtedness of Borrower (other
than indebtedness under this Agreement) shall be accelerated,
or Borrower shall fail to pay any such material indebtedness
when due (after the lapse of any applicable grace period) or,
in the case of such indebtedness payable on demand, when
demanded (after the lapse of any applicable grace period),
or any event shall occur or condition shall exist and shall
continue for more than the period of grace, if any,
applicable thereto and shall have the effect of causing, or
permitting the holder of any such indebtedness or any trustee
or other person, party or entity acting on behalf of such
holder to cause, such material indebtedness to become due
prior to its stated maturity or to realize upon any collateral
given as security therefor. For purposes of this Section,
indebtedness of Borrower shall be deemed "material" if it
exceeds $200,000.00 as to any item of indebtedness or in the
aggregate for all items of indebtedness with respect to which
any of the events described in this Subsection (h) has
occurred.
i. Any execution or attachment shall be issued whereby any
substantial part of the property of Borrower shall be taken
or attempted to be taken and the same shall not have been
vacated or stayed within ninety (90) days after the issuance
thereof.
j. Guarantor shall repudiate or purport to revoke the Guaranty,
or the Guaranty for any reason (except pursuant to the express
terms thereof) shall cease to be in full force and effect as
to Guarantor or shall be judicially declared null and void
as to Guarantor, unless Borrower replaces Guarantor with
another guarantor acceptable to Lender or pays the Loan in
full within ninety (90) days following delivery of written
notice thereof by Lender to Borrower.
k. Any Transaction Document shall, at any time, cease to be in
full force and effect or shall be judicially declared null
and void, or the validity or enforceability thereof shall be
contested by Borrower and/or Guarantor, or Lender shall cease
to have a valid and perfected security interest having the
priority contemplated thereunder in all of the collateral
described therein, other than by action or inaction of Lender
if (i) the
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aggregate value of the collateral affected by any of the
foregoing exceeds $500,000.00, and (ii) any of the foregoing
shall remain unremedied for ten (10) days or more after
receipt of notice thereof by Borrower from Lender.
l. Any member in Borrower on the date hereof shall, for whatever
reason, cease to be a member in Borrower, except as expressly
permitted by Section V.8.
m. CBL & Associates Properties, Inc. ceases to be a real estate
investment trust or the primary nature of its business ceases
to be the ownership and/or development of real property.
VI.2 - Rights and Remedies
Upon the occurrence of an event of default, unless such event of default is
subsequently waived in writing by Lender, Lender shall be entitled, at the
option of Lender, to exercise any or all of the following rights and
remedies, consecutively or simultaneously, and in any order:
a. If the Advance has not yet been made, Lender may terminate
its obligation to make the Advance under this Agreement.
b. Lender may exercise any or all remedies specified herein and
in the other Loan Documents, including (without limiting the
generality of the foregoing) the right to foreclose the
Mortgage, and/or any other remedies which it may have
therefor at law, in equity or under statute.
c. Lender may cure the event of default on behalf of Borrower,
and, in doing so, may enter upon the Project, and may expend
such sums as it may deem desirable, including reasonable
attorneys' fees, all of which shall be deemed to be advances
hereunder, even though causing the Loan to exceed the face
amount of the Note, shall bear interest at the Default Rate
and shall be payable by Borrower on demand.
d. Borrower hereby irrevocably authorizes Lender to set off any
sum owed to Lender under the Loan Documents against all
deposits and credits of Borrower with, and any and all
claims of Borrower against, Lender. Such right shall exist
whether or not Lender shall have made any demand hereunder or
under any other Loan Document, whether or not said sums, or
any part thereof, or deposits and credits held for the
account of Borrower
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is or are matured or unmatured, and regardless of the
existence or adequacy of any collateral, guaranty or any
othersecurity, right or remedy available to Lender. Lender
agrees that, as promptly as is reasonably possible after the
exercise of any such setoff right, it shall notify Borrower
of its exercise of such setoff right; provided, however, that
the failure of Lender to provide such notice shall not affect
the validity of the exercise of such setoff right. Nothing
in this Agreement shall be deemed a waiver or prohibition of
or restriction on Lender to all rights of banker's lien,
setoff and counterclaim available pursuant to law.
VII. MISCELLANEOUS
VII.1 - Binding Effect; Waivers; Cumulative Rights and Remedies
The provisions of this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors,
administrators, personal representatives, legal representatives, successors
and assigns; provided, however, that neither this Agreement nor the
proceeds of the Loan may be assigned by Borrower voluntarily, by operation
of law or otherwise, without the prior written consent of Lender. No delay
on the part of Lender in exercising any right, remedy, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder constitute such
a waiver or exhaust the same, all of which shall be continuing. The rights
and remedies of Lender specified in this Agreement shall be in addition to,
and not exclusive of, any other rights and remedies which Lender would
otherwise have at law, in equity or by statute, and all such rights and
remedies, together with Lender's rights and remedies under the other Loan
Documents, are cumulative and may be exercised individually, concurrently,
successively and in any order.
VII.2 - Survival
All agreements, representations and warranties made in this Agreement shall
survive the execution of this Agreement, the making of the Advance by
Lender, and the execution of the other Loan Documents, and shall continue
until Lender receives payment in full of all indebtedness of Borrower
incurred under this Agreement and under the other Loan Documents.
VII.3 - Governing Law; Waiver of Jury Trial
THIS AGREEMENT, THE RIGHTS OF THE PARTIES HEREUNDER, AND THE CONSTRUCTION,
INTERPRETATION, VALIDITY AND ENFORCEABILITY HEREOF SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
MINNESOTA, WITHOUT
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GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF, BUT GIVING EFFECT
TO FEDERAL LAWS OF THE UNITED STATES RELATING TO NATIONAL BANKS. BY THE
EXECUTION HEREOF, BORROWER AND LENDER KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY HEREBY AGREE THAT:
(A) NEITHER BORROWER NOR LENDER, NOR ANY ASSIGNEE, SUCCESSOR,
HEIR OR LEGAL REPRESENTATIVE OF BORROWER OR LENDER, SHALL SEEK A JURY
TRIAL IN ANY LAWSUIT, PROCEEDING, COUNTERCLAIM, OR ANY OTHER LITIGATION
PROCEDURE ARISING FROM OR BASED UPON THIS AGREEMENT, THE NOTE, THE
MORTGAGE OR ANY OF THE OTHER LOAN DOCUMENTS, OR THE DEALINGS OR
RELATIONSHIP BETWEEN OR AMONG THE PARTIES THERETO;
(B) NEITHER BORROWER NOR LENDER WILL SEEK TO CONSOLIDATE ANY
SUCH ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL HAS NOT BEEN OR CANNOT BE WAIVED;
(C) THE PROVISIONS OF THIS SECTION HAVE BEEN FULLY NEGOTIATED BY
THE PARTIES HERETO, AND THESE PROVISIONS SHALL BE SUBJECT TO NO
EXCEPTIONS;
(D) NEITHER BORROWER NOR LENDER HAS IN ANY WAY AGREED WITH OR
REPRESENTED TO ANY OTHER PARTY THAT THE PROVISIONS OF THIS SECTION WILL
NOT BE FULLY ENFORCED IN ALL INSTANCES; AND
(E) THIS PROVISION IS A MATERIAL INDUCEMENT FOR LENDER TO MAKE
THE LOAN TO BORROWER.
VII.4 - Counterparts
This Agreement may be executed in any number of counterparts, all of which
shall constitute a single Agreement.
VII.5 - Notices
Any notice required or permitted to be given by either party hereto to the
other under the terms of this Agreement, or documents related hereto, shall
be in writing and shall be sent by manual delivery, telegram, telex,
facsimile transmission, overnight courier or United States registered or
certified mail, return receipt requested (postage prepaid), addressed to such
party at the address specified on the signature page hereof, or at such other
address in the United States of America
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as such party shall have specified to the other party hereto in writing, at
least ten (10) days prior to the effective date of said change of address.
All periods of notice shall be measured from the date of delivery thereof if
manually delivered, from the date of sending thereof if sent by telegram,
telex or facsimile transmission, from the first Business Day after the date
of sending if sent by overnight courier, or from four (4) days after the date
of mailing if mailed; provided, however, that any notice to Lender
designating, continuing or converting any portion of the Advance as or into
a Eurodollar Rate Advance shall be deemed to have been given only when
received by Lender.
VII.6 - Lender's Publicity
Lender may, if it so desires, publicize its involvement with the Project,
including but not limited to issuing press releases, subject to the prior
review and approval thereof by Borrower, which approval shall not be
unreasonably withheld or delayed.
VII.7 - No Third Party Reliance
No third party shall be entitled to rely upon this Agreement or to have any
of the benefits of Lender's interest hereunder, unless such third party is
an express assignee of all or a portion of Lender's interest hereunder.
VII.8 - Sale of Loan or Participations
Lender may at any time sell, assign, transfer, syndicate, grant
participations in, or otherwise dispose of portions of the Loan (each such
interest so disposed of being herein called a "Transferred Interest") to
banks or other financial institutions which must be approved by Borrower
(hereinafter called "Transferees"), which approval shall not be unreasonably
withheld or delayed, and Borrower shall have the right to review and approve
any assignment, transfer, syndication or participation agreement before it
is executed, which approval shall also not be unreasonably withheld or
delayed. Notwithstanding the foregoing, in the event of any such
assignment, transfer, syndication or participation, Lender shall (A) be the
"agent bank" or "lead lender" with respect thereto, which retains all day-
to-day loan administration functions and decision making capacity with
respect to the Loan, and (B) retain at least a twenty-five percent (25%)
prorata interest in the Loan. Borrower agrees that each Transferee (except
a participant) shall be entitled to the benefits of Sections I.6, I.7, I.8,
I.9, I.10, I.11, V.1 and VI.2(d) with respect to its Transferred Interest
and that each Transferee may exercise any and all rights of banker's lien,
setoff and counterclaim as if such Transferee were a direct lender to
Borrower. If Lender makes any assignment to a Transferee, then upon notice
to the Borrower such Transferee, to the extent of such assignment (unless
otherwise provided therein), shall become a "Lender" hereunder and shall
have all the rights and obligations of Lender hereunder. Notwithstanding
the sale by Lender of any
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participation hereunder, (a) no participant shall be deemed to be or have
the rights and obligations of Lender hereunder, except that any participant
shall have a right of setoff under Section VI.2 as if it were Lender and the
amount of its participation were owing directly to such participant by
Borrower; and (b) Lender shall not in connection with selling any such
participation condition Lender's rights in connection with consenting to
amendments or granting waivers concerning any matter under any Loan Document
upon obtaining the consent of such participant other than on matters relating
to (i) any reduction in the amount of any principal of, or the amount of or
rate of interest on, the Note, (ii) any postponement of the date fixed for
any payment of principal of or interest on the Note, (iii) the release or
subordination of any material portion of any collateral other than pursuant
to the terms of any Loan Document, or (iv) the release of any Guaranty,
except in accordance with the terms thereof. All costs and expenses of any
such transfer, participation or syndication shall be paid by Lender.
VII.9 - Time of the Essence
Time is of the essence hereof with respect to the dates, terms and
conditions of this Agreement.
VII.10 - Entire Agreement; No Oral Modifications
This Agreement, the other Loan Documents and the other documents mentioned
herein set forth the entire agreement of the parties with respect to the
Loan and supersede all prior written or oral understandings and agreements
with respect thereto. No modification or waiver of any provision of this
Agreement shall be effective unless set forth in writing and signed by the
parties hereto.
VII.11 - Captions
The headings or captions of the Articles and Sections set forth herein are
for convenience only, are not a part of this Agreement and are not to be
considered in interpreting this Agreement.
VII.12 - Borrower-Lender Relationship
The relationship between Borrower and Lender created hereby and by the
other Loan Documents shall be that of a borrower and a lender only, and in
no event shall Lender be deemed to be a partner of, or a joint venturer
with, Borrower.
VII.13 - Commercial Reasonableness
Borrower and Lender shall each proceed in good faith and in a commercially
reasonable manner with respect to its obligations, duties, liabilities,
covenants, agreements, rights and remedies hereunder and under all of the
other Loan Documents, whether or not it is otherwise herein or therein
expressly required to so proceed.
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VII.14 - Multiple Appraisals
Borrower shall be required to pay for an Appraisal obtained by or for Lender
only (a) prior to the closing of the Loan; (b) upon the occurrence of an
event of default under this Agreement; and (c) at any other time an
Appraisal is required by Minnesota law or other applicable Governmental
Requirements.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
Address: BURNSVILLE MINNESOTA, LLC,
a Minnesota limited liability company
c/o CBL Holdings I, Inc.
One Park Place By: CBL & Associates Limited Partnership,
6148 Lee Highway Its Sole Member
Chattanooga, Tennessee 37421
Attention: President By: CBL Holdings I, Inc.,
Its General Partner
/s/ John N. Foy
By: _____________________________
John N. Foy
Its: Executive Vice President
(CORPORATE SEAL)
Address: U.S. BANK NATIONAL
ASSOCIATION
Mail Station - MPFP0802 /s/ Stephen P. Bailey
601 Second Avenue South By: _____________________________
Minneapolis, Minnesota 55402-4302 Vice President
Attention: Real Estate Banking Its: ___________________________
Division Head
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