FIXED INTEREST ONLY NOTE
TIAA Appl. #IL-735
M - 000460400
PROMISSORY NOTE
$75,000,000.00 Fairview Heights, IL
Dated:_March 11, 1999_
FOR VALUE RECEIVED, ST. CLAIR SQUARE LIMITED PARTNERSHIP
("Borrower"), an Illinois limited partnership having its principal place
of business at c/o CBL & Associates Properties, Inc., One Park Place,
6148 Lee Highway, Suite 300, Chattanooga, TN 37421-6511, promises to pay
to TEACHERS INSURANCE AND ANNUITY ASSOCIATION OF AMERICA ("Lender"), a
New York corporation, or order, at Lender's offices at 730 Third Avenue,
New York, New York 10017 or at such other place as Lender designates in
writing, the principal sum of SEVENTY-FIVE MILLION DOLLARS
($75,000,000.00) (the principal sum or so much of the principal sum as
may be advanced and outstanding from time to time, the "Principal"), in
lawful money of the United States of America, with interest on the
Principal from the date of this Promissory Note (this "Note") through
and including the first day of the 121st calendar month immediately
following the date hereof (the "Maturity Date") at the fixed rate of
seven percent (7%) per annum (the "Fixed Interest Rate").
This Note is secured by, among other things, the Mortgage,
Assignment of Leases and Rents, Security Agreement, and Fixture Filing
Statement (the "Mortgage") dated the date of this Note made by Borrower
for the benefit of Lender as security for the Loan. All capitalized
terms not expressly defined in this Note will have the definitions set
forth in the Mortgage.
Section 1. Payments of Principal and Fixed Interest.
(a) Borrower will make monthly installment payments ("Debt
Service Payments") as follows:
(i) On the first day of the first calendar month immediately
following the date hereof (hereinafter called the "First Payment
Date"), a payment of accrued interest on the Principal at the
Fixed Interest Rate; and
(ii) On the first day of the second calendar month immediately
following the date hereof and on the first day of each succeeding
calendar month through and including the first day of the 120th
calendar month immediately following the date hereof, payments in
the amount of Five Hundred Thirty Thousand Eighty-Four and
40/100ths Dollars ($530,084.40), each of which will be applied
first to accrued interest on the Principal at the Fixed Interest
Rate and then to the Principal (each such payment being
hereinafter called a "Regular Monthly Payment").
(b) On the Maturity Date, Borrower will pay the Principal in full
together with accrued interest at the Fixed Interest Rate and all other
amounts due under the Loan Documents.
Section 2. Prepayment Provisions.
(a) The following definitions apply:
"Discount Rate" means the yield on a U.S. Treasury issue selected by
Lender, as published in The Wall Street Journal four days prior to
prepayment, having a maturity date corresponding (or most closely
corresponding, if not identical) to the Maturity Date, and, if
applicable, a coupon rate corresponding (or most closely corresponding,
if not identical) to the Fixed Interest Rate.
"Default Discount Rate" means the Discount Rate less 300 basis points.
"Discounted Value" means the Discounted Value of a Note Payment based on
the following formula:
NP
(1 + R/12)n = Discounted Value
NP = Amount of Note Payment
R = Discount Rate or Default Discount Rate as
the case may be.
n = The number of months between the date of
prepayment and the scheduled date of the
Note Payment being discounted rounded to
the nearest integer.
"Note Payments" means (i) the scheduled Debt Service Payments for the
period from the date of prepayment through the Maturity Date and (ii)
the scheduled repayment of Principal, if any, on the Maturity Date.
"Prepayment Date Principal" means the Principal on the date of
prepayment.
(b) Except as provided in (c) below, this Note may not be prepaid
in full or in part before the first day of the sixty-first (61st)
calendar month immediately following the date hereof. Commencing on the
first day of the sixty-first (61st) calendar month immediately following
the date hereof, provided there is no Event of Default then existing and
not cured, Borrower may prepay this Note in full, but not in part, on
the first day of any calendar month, upon 60 days prior notice to Lender
and upon payment in full of the Debt which will include a payment (the
"Prepayment Premium") equal to the greater of (i) an amount equal to
the product of 1% times the Prepayment Date Principal and (ii) the
amount by which the sum of the Discounted Values of Note Payments,
calculated at the Discount Rate, exceeds the Prepayment Date Principal.
Provided there is no Event of Default then existing and not cured, this
Note may be prepaid in full without payment of the Prepayment Premium
during the last 120 days of the Term. This Note may not be prepaid
without simultaneous prepayment in full of any other notes secured by
the Loan Documents.
(c) Notwithstanding clause (b) above, one time only, on the first
day of any calendar month prior to the thirteenth (13th) calendar month
immediately following the date hereof, Borrower may prepay the Principal
in part, in an amount not greater than $25,000,000, upon not less than
30 days prior written notice to Lender, provided i) simultaneously with
the prepayment, a transfer described in paragraph 12.2(b)(i) of the
Mortgage shall occur, which transfer shall (A) be the first transfer
made under paragraph 12.2(b)(i) of the Mortgage (and not a second or
subsequent transfer under that paragraph) and (B) be a transfer of at
least 15% of the partnership interest in Borrower; and ii) Borrower
shall simultaneously pay a prepayment premium equal to 2% of the portion
of the Principal that is prepaid. Any payments made by Borrower to
Lender under this clause (c) at a time when any interest or other sums
are due from Borrower to Lender under this Note or under any other Loan
Document shall be applied first to the payment of such interest and
other sums and second to prepayment of the Principal. From and after
the first day of the first calendar month following any such partial
prepayment (which day is hereinafter called the "Adjustment Date"), the
amount of each Regular Monthly Payment payable under this Note shall be
adjusted to equal the amount that, if paid on the first day of every
calendar month from the Adjustment Date to and including the twenty-
fifth (25th) anniversary of the First Payment Date and applied first to
accrued interest at the Fixed Interest Rate and then to amortization of
the Principal, would result in repayment of the Principal in full on
that twenty-fifth (25th) anniversary. Borrower shall make that adjusted
Regular Monthly Payment from and after the Adjustment Date. The
hypothetical amortization of the Principal on the twenty-fifth (25th)
anniversary of the First Payment Date is for the purpose only of
computing the adjusted Regular Monthly Payment; nothing herein shall
abrogate or limit Borrower's obligation to repay the Principal, all
accrued interest thereon, and all other sums due hereunder, under the
Mortgage and under the other Loan Documents on the Maturity Date.
(d) After an Acceleration or upon any other prepayment not
permitted by the Loan Documents, any tender of payment of the amount
necessary to satisfy the Debt accelerated, any judgment of foreclosure,
any statement of the amount due at the time of foreclosure (including
foreclosure by power of sale) and any tender of payment made during any
redemption period after foreclosure, will include a payment (the
"Evasion Premium") equal to the greater of (i) an amount equal to the
product of 1% plus 300 basis points times the Prepayment Date Principal,
and (ii) the amount by which the sum of the Discounted Values of the
Note Payments, calculated at the Default Discount Rate, exceeds the
Prepayment Date Principal.
(e) Borrower acknowledges that:
(i) a prepayment will cause damage to Lender;
(ii) the Evasion Premium is intended to compensate Lender for the
loss of its investment and the expense incurred and time and
effort associated with making the Loan, which will not be fully
repaid if the Loan is prepaid;
(iii) it will be extremely difficult and impractical to ascertain
the extent of Lender's damages caused by a prepayment after an
Event of Default or any other prepayment not permitted by the Loan
Documents; and
(iv) the Evasion Premium represents Lender and Borrower's
reasonable estimate of Lender's damages for the prepayment and is
not a penalty.
Section 3. Events of Default:
(a) It is an "Event of Default" under this Note:
(i) if Borrower fails to pay any amount due, as and when
required, under this Note or any other Loan Document and the
failure continues for a period of 5 days (except that, on the
first three occasions during the Term in which Borrower fails to
pay any such amount and the failure continues for such 5 day
period, an Event of Default shall not be deemed to occur unless
Borrower fails to pay the amount due within 5 days after notice of
the failure; after the third such occasion, an Event of Default
shall be deemed to occur if the failure to pay the amount due
continues for a period of 5 days whether or not notice is provided
to the Borrower); or
(ii) if an Event of Default occurs under any other Loan Document.
(b) If an Event of Default occurs, Lender may declare all or any
portion of the Debt immediately due and payable ("Acceleration") and
exercise any of the other Remedies.
Section 4. Default Rate. Interest on the Principal will accrue
at the Default Interest Rate from the date an Event of Default occurs.
Section 5. Late Charges.
(a) If Borrower fails to pay any Debt Service Payment when due or
fails to pay any amount due under the Loan Documents on the Maturity
Date (in either event, without giving consideration to any grace period
contained in the Loan Documents), Borrower agrees to pay to Lender an
amount (a "Late Charge") equal to five cents ($.05) for each one dollar
($1.00) of the delinquent payment.
(b) Borrower acknowledges that:
(i) a delinquent payment will cause damage to Lender;
(ii) the Late Charge is intended to compensate Lender for loss
of use of the delinquent payment and the expense incurred and time
and effort associated with recovering the delinquent payment;
(iii) it will be extremely difficult and impractical to ascertain
the extent of Lender's damages caused by the delinquency; and
(iv) the Late Charge represents Lender and Borrower's reasonable
estimate of Lender's damages from the delinquency and is not a
penalty.
Section 6. Limitation of Liability. This Note is subject to the
limitations on liability set forth in the Article of the Mortgage
entitled "Limitation of Liability".
Section 7. WAIVERS. IN ADDITION TO THE WAIVERS SET FORTH IN THE
ARTICLE OF THE MORTGAGE ENTITLED "WAIVERS", BORROWER WAIVES PRESENTMENT
FOR PAYMENT, DEMAND, DISHONOR AND, EXCEPT AS EXPRESSLY SET FORTH IN THE
LOAN DOCUMENTS, NOTICE OF ANY OF THE FOREGOING. BORROWER FURTHER WAIVES
ANY PROTEST, LACK OF DILIGENCE OR DELAY IN COLLECTION OF THE DEBT OR
ENFORCEMENT OF THE LOAN DOCUMENTS. BORROWER AND ALL INDORSERS, SURETIES
AND GUARANTORS OF THE OBLIGATIONS CONSENT TO ANY EXTENSIONS OF TIME,
RENEWALS, WAIVERS AND MODIFICATIONS THAT LENDER MAY GRANT WITH RESPECT
TO THE OBLIGATIONS AND TO THE RELEASE OF ANY SECURITY FOR THIS NOTE AND
AGREE THAT ADDITIONAL MAKERS MAY BECOME PARTIES TO THIS NOTE AND
ADDITIONAL INDORSERS, GUARANTORS OR SURETIES MAY BE ADDED WITHOUT NOTICE
AND WITHOUT AFFECTING THE LIABILITY OF THE ORIGINAL MAKER OR ANY
ORIGINAL INDORSER, SURETY OR GUARANTOR.
Section 8. Commercial Loan. The Loan is made for the purpose of
carrying on a business or commercial activity or acquiring real or
personal property as an investment or carrying on an investment activity
and not for personal or household purposes.
Section 9. Usury Limitations. Borrower and Lender intend to
comply with all Laws with respect to the charging and receiving of
interest. Any amounts charged or received by Lender for the use or
forbearance of the Principal to the extent permitted by Law, will be
amortized and spread throughout the Term until payment in full so that
the rate or amount of interest charged or received by Lender on account
the Principal does not exceed the Maximum Interest Rate. If any amount
charged or received under the Loan Documents that is deemed to be
interest is determined to be in excess of the amount permitted to be
charged or received at the Maximum Interest Rate, the excess will be
deemed to be a prepayment of Principal when paid, without premium, and
any portion of the excess not capable of being so applied will be
refunded to Borrower. If during the Term the Maximum Interest Rate, if
any, is eliminated, then for purposes of the Loan, there will be no
Maximum Interest Rate.
Section 10. Applicable Law. This Note is governed by and will be
construed in accordance with the Laws of the State or Commonwealth in
which the Property is located, without regard to conflict of law
provisions.
Section 11. Time of the Essence. Time is of the essence with
respect to the payment and performance of the Obligations.
Section 12. Cross-Default. A default under any other note now or
hereafter secured by the Loan Documents or under any loan document
related to such other note constitutes a default under this Note and
under the other Loan Documents. When the default under the other note
constitutes an Event of Default under that note or the related loan
document, an Event of Default also will exist under this Note and the
other Loan Documents.
Section 13. Construction. Unless expressly provided otherwise in
this Note, this Note will be construed in accordance with the Exhibit
attached to the Mortgage entitled "Rules of Construction".
Section 14. Mortgage Provisions Incorporated. To the extent not
otherwise set forth in this Note, the provisions of the Articles of the
Mortgage entitled "Expenses and Duty to Defend", "Waivers", "Notices",
and "Miscellaneous" are applicable
to this Note and deemed incorporated by reference as if set forth at
length in this Note.
Section 15. Joint and Several Liability; Successors and Assigns.
If Maker consists of more than one entity, the obligations and
liabilities of each such entity will be joint and several. This Note
binds Borrower and successors, assigns, heirs, administrators,
executors, agents and representatives and inures to the benefit of
Lender and its successors, assigns, heirs, administrators, executors,
agents and representatives.
Section 16. Absolute Obligation. Except for the Section of this
Note entitled "Limitation of Liability", no reference in this Note to
the other Loan Documents and no other provision of this Note or of the
other Loan Documents will impair or alter the obligation of Borrower,
which is absolute and unconditional, to pay the Principal, interest at
the Fixed Interest Rate and any other amounts due and payable under this
Note, as and when required.
IN WITNESS WHEREOF, Borrower has executed and delivered this Note
as of the date first set forth above.
ST. CLAIR SQUARE LIMITED PARTNERSHIP,
an Illinois limited partnership
By: St. Clair Square, GP, Inc.,
a general partner
/s/ John N. Foy
By:_________________________
Name:_John N. Foy__________
Title:_Vice Chairman _____