_________________________________________________________
$85,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 26, 1996
By and Among
CBL & ASSOCIATES LIMITED PARTNERSHIP,
a Delaware limited Partnership, as Borrower,
and
XXXXX FARGO BANK, N.A.
as successor in interest to
Xxxxx Fargo Realty Advisors Funding, Incorporated,
NATIONSBANK, N.A. (SOUTH), successor by merger to
NationsBank of Georgia, N.A.,
FIRST BANK NATIONAL ASSOCIATION,
UNION BANK OF SWITZERLAND (NEW YORK BRANCH),
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT TO SECTION 9.6
as Lenders,
and
XXXXX FARGO BANK, N.A.,
as successor in interest to
Xxxxx Fargo Realty Advisors Funding, Incorporated,
as Agent
_______________________________________________________
TABLE OF CONTENTS
ARTICLE 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.2 Use of Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . 17
1.3 Accounting Terms, Calculation. . . . . . . . . . . . . . . . . . . . 17
1.4 Terminology. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 2.
2.1 Commitment to Lend. . . . . . . . . . . . . . . . . . . . . . . 19
2.2 Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3 Method of Borrowing. . . . . . . . . . . . . . . . . . . . . . . . . 22
2.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.5 Interest Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.6 Special Provisions for LIBOR Advances. . . . . . . . . . . . . . . . 25
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
2.8 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.9 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . 31
2.10 Option to Replace Lenders . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE 3.
3.1 Borrowing Base. . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Leases and Major Agreements. . . . . . . . . . . . . . . . . . . . . 38
3.3 Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.4 Major Construction . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 4.
4.1 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.2 Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
4.3 Conditions Precedent to a Project Becoming An Eligible Project . . . . . .43
4.4 Conditions to Conversion to Term Loan. . . . . . . . . . . . . . . . 45
ARTICLE 5.
5.1 Organization and Power. . . . . . . . . . . . . . . . . . . . . 45
5.2 Validity of Loan Instruments . . . . . . . . . . . . . . . . . . . . 46
5.3 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
5.4 Financial Information. . . . . . . . . . . . . . . . . . . . . . . . 47
5.5 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.6 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
5.7 Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . . . 47
5.8 Taxes and Other Payments . . . . . . . . . . . . . . . . . . . . . . 49
5.9 Not an Investment Company. . . . . . . . . . . . . . . . . . . . . . 50
5.10 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.11 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.12 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
5.13 Title to the Projects . . . . . . . . . . . . . . . . . . . . . . . 50
5.14 Governmental Requirements . . . . . . . . . . . . . . . . . . . . . 50
5.15 ERISA; Plan Assets. . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 6.
6.1 Reporting Requirements. . . . . . . . . . . . . . . . . . . . . 51
6.2 Payment and Performance. . . . . . . . . . . . . . . . . . . . . . . 53
6.3 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . 54
6.4 Business; Existence. . . . . . . . . . . . . . . . . . . . . . . . . 54
6.5 Payment of Impositions . . . . . . . . . . . . . . . . . . . . . . . 54
6.6 Compliance with Legal Requirements . . . . . . . . . . . . . . . . . 55
6.7 Inspection of Property, Books and Records. . . . . . . . . . . . . . 55
6.8 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.9 Consolidations, Mergers and Sales of Assets. . . . . . . . . . . . . 56
6.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . 56
6.11 Investment Concentration. . . . . . . . . . . . . . . . . . . . . . 56
6.12 Total Obligations to Gross Asset Value. . . . . . . . . . . . . . . 57
6.13 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.14 Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . 58
6.15 Debt Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . 58
6.16 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.17 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.18 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 7.
7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . 59
7.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7.3 Actions in Respect of the Letters of Credit Upon Default . . . . . . 63
7.4 Curing Defaults Under Collateral Documents . . . . . . . . . . . . . 63
7.5 Permitted Deficiency . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE 8.
8.1 Appointment and Authorization . . . . . . . . . . . . . . . . . 65
8.2 Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . 65
8.3 Action by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.4 Consultation with Experts. . . . . . . . . . . . . . . . . . . . . . 66
8.5 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.6 Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.8 Credit Decision. . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.9 Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.10 Resignation or Removal of Agent; Co-Agent . . . . . . . . . . . . . 67
8.11 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . 68
8.12 Agency Provisions Relating to Collateral. . . . . . . . . . . . . . 71
8.13 Defaulting Lenders. . . . . . . . . . . . . . . . . . . . . . . . . 73
8.14 Borrower Not a Beneficiary. . . . . . . . . . . . . . . . . . . . . 75
ARTICLE 9.
9.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.2 No Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
9.3 Expenses; Documentary Taxes; Indemnification . . . . . . . . . . . . 77
9.4 Waiver of Set-Offs; Sharing of Set-Offs. . . . . . . . . . . . . . . 78
9.5 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . 78
9.6 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . 80
9.7 Capital Adequacy . . . . . . . . . . . . . . . . . . . . . . . . . . 81
9.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.9 Notice of Final Agreement. . . . . . . . . . . . . . . . . . . . . . 82
9.10 Invalid Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 82
9.11 Maximum Rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
9.12 Limitation Upon Liability . . . . . . . . . . . . . . . . . . . . . 83
9.15 Conflict of Terms . . . . . . . . . . . . . . . . . . . . . . . . . 84
9.16 Governing Law; Submission to Jurisdiction . . . . . . . . . . . . . 85
9.17 Waiver of Right to Trial by Jury. . . . . . . . . . . . . . . . . . 85
9.18 Amendment and Restatement . . . . . . . . . . . . . . . . . . . . . 85
Schedule 3.1 List of Projects
Schedule 5.5 Litigation
Schedule 0 ERISA Plans
Schedule 5.11 Insurance
Exhibit A Notes
Exhibit B Notice of Borrowing
Exhibit C Rate Selection Notice
Exhibit D Form of Mortgage
Exhibit E Form of Environmental Indemnity Agreement
Exhibit F Form of Closing Certificate
Exhibit G Form of Guaranty
Exhibit H Form of Assignment
Exhibit I Form of Extension Request
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement") is
made and entered into as of this 26th day of September, 1996, by and
between CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited
partnership (hereinafter referred to as the "Borrower"), XXXXX FARGO
BANK, N.A., a national banking association, as successor in interest
to Xxxxx Fargo Realty Advisors Funding, Incorporated, a Colorado
corporation, NATIONSBANK, N.A. (SOUTH), successor by merger to
NationsBank of Georgia, N.A., a national banking association, FIRST
BANK NATIONAL ASSOCIATION, a national banking association, and UNION
BANK OF SWITZERLAND (NEW YORK BRANCH) (hereinafter referred to
individually as a "Lender" and collectively as the "Lenders") and
XXXXX FARGO BANK, N.A., a national banking association, as successor
in interest to Xxxxx Fargo Realty Advisors Funding, Incorporated, a
Colorado corporation, as agent for the benefit of each of the Lenders
(in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, Borrower, Xxxxx Fargo Realty Advisors Funding,
Incorporated, NationsBank of Georgia, N.A., and First Bank National
Association (collectively, the "Original Lenders") and Agent entered
into that certain Credit Agreement dated as of July 28, 1994 (the
"Credit Agreement"), pursuant to which the Original Lenders agreed
to extend to Borrower a credit facility (the "Credit Facility") in
the aggregate principal amount of up to Seventy-Five Million Dollars
($75,000,000.00) at any one time outstanding; and
WHEREAS, Borrower, Original Lenders, Union Bank of Switzerland
(New York Branch) ("UBS") and Agent entered into that certain First
Amendment to Credit Agreement dated as of May 5, 1995 (the "First
Amendment") to, among other matters, add UBS as a "Lender" and
increase the aggregate principal amount of the Credit Facility to up
to Eighty-Five Million Dollars ($85,000,000.00) at any one time
outstanding; and
WHEREAS, Borrower, Lenders and Agent entered into that certain
Second Amendment to Credit Agreement dated as of July 5, 1995 (the
"Second Amendment"); and
WHEREAS, Borrower, Lenders and Agent entered into that certain
Third Amendment to Credit Agreement dated as of May 23, 1996 (the
"Third Amendment"); and
WHEREAS, Borrower, Lenders and Agent entered into that certain
Fourth Amendment to Credit Agreement dated as of July 26, 1996 (the
"Fourth Amendment") (the Credit Agreement, the First Amendment, the
Second Amendment, the Third Amendment and the Fourth Amendment being
collectively referred to herein as the "Original Credit Agreement");
and
WHEREAS, Borrower, Lenders and Agent desire to modify, amend
and restate the Original Credit Agreement in the manner and for the
purposes set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
obligations and covenants hereinafter contained, the parties hereto
hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Definitions. When used herein, the following
terms shall have the following meanings:
"Adjusted Asset Value" means, as of a given date, (a) EBITDA
for Borrower's fiscal quarter most recently ended multiplied by (b)
4 and divided by (c) the Capitalization Rate. For purposes of
determining Adjusted Asset Value, EBITDA shall be adjusted by the
Agent in its reasonable discretion to take into account acquisitions
and dispositions of property by Borrower and shall exclude any EBITDA
from property not owned by Borrower for the entire fiscal quarter
most recently ended or upon which construction was in progress at the
end of the fiscal quarter most recently ended.
"Advance" shall have the meaning given such term in Section 2.1
hereof. An Advance may be either a LIBOR Advance or a Base Rate
Advance.
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, owns or controls, on an aggregate
basis, including all beneficial ownership and ownership or control
as a trustee, guardian or other fiduciary, at least ten percent (10%)
of the outstanding shares of Capital Stock or other ownership
interest having ordinary voting power to elect a majority of the
board of directors or other governing body (irrespective of whether,
at the time, stock of any other class or classes of such corporation
shall have contingency) of such Person or at least ten percent (10%)
of the partnership or other ownership interest of such Person; or
which controls, is controlled by or is under common control with such
Person. For the purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause
the direction of management and policies, whether through the
ownership of voting securities, by contract or otherwise.
Notwithstanding the foregoing, a pension fund, university or other
endowment funds, mutual fund investment company or similar fund
having a passive investment intent owning such a ten percent (10%)
or greater interest in a Person shall not be deemed an Affiliate of
such Person unless such pension, mutual, endowment or similar fund
either (i) owns fifty percent (50%) or more of the Capital Stock or
other ownership interest in such Person, or (ii) has the right or
power to select one or more members of such Person's board of
directors or other governing body.
"Applicable Law" means, in respect of any Person, all
provisions of statutes, rules, regulations and orders of any
Governmental Authority applicable to such Person, and all orders and
decrees of all courts and arbitrators in proceedings or actions in
which the Person in question is a party.
2
"Appraisal" means, in respect of any Project or proposed
Project, a M.A.I. appraisal commissioned by and addressed to Agent
(acceptable to Agent, in Agent's reasonable judgment, as to form,
substance and appraisal date), prepared by a professional appraiser
acceptable to Agent, in Agent's reasonable judgment, having at least
the minimum qualifications required under applicable regulations
governing Agent, including FIRREA, and determining the "as is" market
value of such Project or proposed Project as between a willing buyer
and a willing seller.
"Appraised Value" means, as to any Project or proposed Project,
the "as is" market value of such Project as reflected in the then
most recent Appraisal of such Project as the same may have been
adjusted by Agent based upon its internal review of such Appraisal
which is based on criteria and factors then generally used and
considered by Agent in determining the value of similar projects,
which review shall be conducted prior to acceptance of such Appraisal
by Agent and in any event within thirty (30) days after receipt by
Agent of such Appraisal. In the event that an Appraisal of a Project
is performed after the occurrence of either (a) a casualty affecting
such Project or (b) a condemnation of a portion of such Project which
results in a loss of less than 10% of the acreage of the Project and
of no portion of the principal structures, but prior to complete
restoration of the same, the Appraised Value shall, to the extent
permitted by applicable regulations, be made on an "as-restored"
basis.
"Approved Percentage" means with respect to the Appraised Value
of any Project, a percentage not to exceed sixty five percent (65%),
as determined by Agent and disclosed to Borrower prior to admission
of such Project into the Borrowing Base. With respect to the
Appraised Value of the Property listed in Schedule 3.1 attached
hereto, the Approved Percentage is sixty five percent (65%).
"Base Rate" shall mean an interest rate per annum, fluctuating
daily, equal to the higher of (a) the rate announced by Agent from
time to time at its principal office in San Francisco, California as
its prime rate in effect on such day, or (b) the Federal Funds Rate
in effect on such day plus 0.5%. The Base Rate is not necessarily
intended to be the lowest rate of interest charged by Agent or any
Lender in connection with extensions of credit. Each change in Base
Rate shall result in a corresponding change in the interest rate
hereunder with respect to a Base Rate Advance and such change shall
be effective on the effective date of such change in the Base Rate.
"Base Rate Advance" means any Advance hereunder with respect to
which the interest rate is calculated by reference to the Base Rate.
"Borrowing Base" has the meaning set forth in Section 3.1(b)
hereof.
"Business Day" means any day on which all major departments of
Agent are open for business at its downtown headquarters in San
Francisco, California.
"Capital Stock" shall mean, as to any Person, any and all
shares, interests, warrants, participations or other equivalents
(however designated) of corporate stock of such Person.
"Capitalization Rate" means nine and one-quarter percent
(9.25%).
"CBL Management, Inc." means CBL & Associates Management, Inc.,
a Delaware corporation.
3
"CBL Properties, Inc." means CBL & Associates Properties, Inc.,
a Delaware corporation, and a qualified public REIT and sole general
partner of Borrower.
"Collateral" means the real and personal property comprising
each Eligible Project securing payment of the Loan pursuant to the
Collateral Documents.
"Collateral Documents" means the Mortgages, assignments,
security agreements, financing statements, subordination, attornment
and non-disturbance agreements, tenant estoppel letters, title
insurance policies and other loan and collateral documents creating,
evidencing, perfecting insuring or relating to the Liens and security
interests in the Collateral.
"Combined" means, as to any calculation hereunder, that such
calculation shall be made on a combined basis for Borrower, CBL
Properties, Inc. and CBL Management, Inc., with each such calculation
being made, (a) in respect of Borrower, on a consolidated basis for
Borrower and its Subsidiaries, (b) in respect of CBL Properties,
Inc., on a consolidated basis for CBL Properties, Inc. and its
Subsidiaries, and (c) in respect of CBL Management, Inc., on a
consolidated basis for CBL Management, Inc. and its Subsidiaries.
"Commitment" means, in respect of each Lender, the obligation
of such Lender to make Advances to Borrower, subject to the terms and
conditions hereof, up to an aggregate principal amount not to exceed
at any one time outstanding the amount set forth opposite such
Lender's name on the signature pages hereto or as set forth in any
amendment to this Agreement, subject to adjustment, in the case of
any Lender, from time to time by assignment pursuant to Section 9.6
hereof or decrease by Borrower pursuant to Section 2.1 hereof, and
"Commitments" shall mean the Commitment of all the Lenders in an
aggregate principal amount not to exceed at any one time outstanding
Eighty-Five Million Dollars ($85,000,000).
"Consequential Loss" means, for any Lender with respect to (a)
Borrower's payment of all or any portion of the then-outstanding
principal amount of a LIBOR Advance on a day other than the last day
of the Interest Period applicable thereto or (b) any of the
circumstances specified in Section 2.3(c) upon which a Consequential
Loss may be incurred, any loss, cost or expense incurred by such
Lender as a result of the timing of such payment or Advance or in the
redepositing, redeploying or reinvesting the principal amount so paid
or affected by the timing of such Advance or the circumstances
described in Section 2.3(c) including the sum of (i) the interest
which, but for the payment or timing of the Advance, such Lender
would have earned in respect of such principal amount, reduced, if
such Lender is able to redeposit, redeploy, or reinvest such
principal amount by the interest earned by such Lender as a result
of so redepositing, redeploying or reinvesting such principal amount,
plus (ii) any expense or penalty incurred by such Lender on
redepositing, redeploying or reinvesting such principal amount.
"Contingent Obligations" means, for any Person, any material
commitment, undertaking, Guarantee or other material obligation
constituting a contingent liability under GAAP, but only to the
extent the same are required to be reflected on such Person's audited
financial statements.
"Conversion Date" has the meaning set forth in Section 2.3(c)
hereof.
4
"Debt Coverage Ratio" shall mean, as of any date the same is
calculated, the ratio of (a) EBITDA for the fiscal quarter ending on
or most recently ended prior to such date to (b) Debt Service during
such fiscal quarter, in each case calculated on a Combined basis in
accordance with GAAP.
"Debt Service" means, with respect to Borrower, CBL Properties,
Inc., and their respective Subsidiaries for any period, the sum of
(a) Interest Expense of Borrower, CBL Properties, Inc. and their
respective Subsidiaries for such period, plus (b) regularly scheduled
principal payments on Indebtedness of Borrower, CBL Properties, Inc.
and their respective Subsidiaries during such period other than (x)
in respect of any period following the Term Loan Conversion Date, the
scheduled principal payments on the Term Loan and (y) any regularly
scheduled principal payment payable on any Indebtedness which repays
such Indebtedness in full, to the extent the amount of such final
scheduled principal payment is greater than the scheduled principal
payment immediately preceding such final scheduled principal payment,
determined in each case on a Combined basis in accordance with GAAP.
For purposes of this definition, a voluntary prepayment of
Indebtedness shall not constitute a regularly scheduled principal
payment even if, under the terms of the agreement governing such
Indebtedness, the notice of prepayment has the effect of causing the
amount of the prepayment to become due and payable on the date set
for such notice for such prepayment.
"Default" means any condition or event which, with the giving
of notice or lapse of time or both would, unless cured or waived,
become an Event of Default.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period
specified for performance of such obligation or, if no time frame is
specified, if such failure or refusal continues for a period of five
(5) days after notice from Agent.
"EBITDA" means, for any period, the sum of (i) Net Income of
Borrower, CBL Properties, Inc. and their respective Subsidiaries for
such period (excluding equity in net earnings (or loss) of their
Unconsolidated Affiliates), plus (ii) depreciation and amortization
expense and other non-cash charges of Borrower, CBL Properties, Inc.
and their respective Subsidiaries for such period, plus (iii)
interest expense of Borrower, CBL Properties, Inc. and their
respective Subsidiaries for such period, plus (iv) income tax expense
(federal and state) in respect of such period, plus (v) cash
dividends and distributions actually received by Borrower, CBL
Properties, Inc. and their respective Subsidiaries during such period
from Unconsolidated Affiliates, plus (vi) extraordinary losses (and
any unusual losses arising in or outside the ordinary course of
business of Borrower, CBL Properties, Inc. and their respective
Subsidiaries not included in extraordinary losses determined in
accordance with GAAP that have been reflected in the determination
of Net Income) for such period, minus (vii) extraordinary gains of
Borrower, CBL Properties, Inc. and their respective Subsidiaries (and
any unusual gains arising in or outside the ordinary course of
business of Borrower, CBL Properties, Inc. or such respective
Subsidiaries not included in extraordinary gains determined in
accordance with GAAP that have been reflected in the determination
of Net Income) for such period, determined in each case on a Combined
basis in accordance with GAAP.
"Effective Date" means the date this Agreement becomes
effective in accordance with Section 4.1 hereof.
5
"Eligible Project" means a Project which the Agent and the
Lenders have agreed, in their reasonable discretion, to include in
the Borrowing Base.
"Environmental Laws" means any and all federal, state, local
and foreign statutes, laws, judicial decisions, regulations,
ordinances, rules, judgments, orders, decrees, plans, injunctions,
permits, concession, grants, franchises, licenses, agreements and
other governmental restrictions relating to the environment, the
effect of the environment on human health or to emissions, discharges
or releases of pollutants, contaminants, Hazardous Substances or
wastes into the environment including, without limitation, ambient
air, surface water, ground water, or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of pollutants, contaminants,
Hazardous Substances or wastes or the clean-up or other remediation
thereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and all rules and regulations
from time to time promulgated thereunder.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which, together with Borrower, is treated as a single
employer under Sections 414(b), (c), (m) or (o) of the Internal
Revenue Code.
"ERISA Plan" means any employee benefit plan subject to Title
I of ERISA.
"Event of Default" has the meaning set forth in Section 7.1
hereof.
"Federal Funds Rate" means, on any day, the rate per annum
(rounded upward, if necessary, to the nearest 1/100th of 1%) equal
to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the Federal
Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is published on
such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Agent on such day of such
transactions as determined by Agent.
"FIRREA" means the Financial Institution Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
"Funds from Operations" means, as to any period, an amount
equal to (a) income (loss) from operations of Borrower, CBL
Properties, Inc. and their respective Subsidiaries for such period,
excluding gain (loss) from debt restructuring and sale of properties,
plus (b) depreciation and amortization of real estate assets, plus
(minus) (c) to the extent not included in clause (a) above, gain
(loss) on the sales of outparcels made in the ordinary course of
business, and after adjustments for Unconsolidated Affiliates,
determined in each case on a Combined basis in accordance with GAAP.
Adjustments for Unconsolidated Affiliates will be calculated to
reflect funds from operations on the same basis.
6
"GAAP" shall mean generally accepted accounting principles
applied on a basis consistent with those which, in accordance with
the last sentence of Section 1.3(a) hereof, are to be used in making
the calculations for purposes of determining compliance with this
Agreement.
"Governmental Authority" means, in respect any Person, any
government (or any political subdivision or jurisdiction thereof) ,
court, bureau, agency or other governmental authority having
jurisdiction over such Person or any Affiliate of such Person or any
of its or their business, operations or properties.
"Gross Asset Value" means, at a given time, the sum of (a)
Adjusted Asset Value at such time, plus (b) all of Borrower's cash
and cash equivalents at the end of the fiscal quarter most recently
ended, plus (c) the current book value of all real property of
Borrower upon which construction was in progress at the end of the
fiscal quarter most recently ended, plus (d) the purchase price paid
by Borrower for any real property purchased by Borrower during the
fiscal quarter most recently ended.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or
pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise), or (ii) entered into
for the purpose of assuring in any other manner the obligee of such
Indebtedness or other obligation of the payment thereof or to protect
such obligee against loss in respect thereof (in whole or in part),
provided that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Hazardous Substances" shall mean any pollutant, contaminant,
hazardous, toxic or dangerous waste, substance or material, or any
other substance or material regulated or controlled pursuant to any
Environmental Law, including, without limiting the generality of the
foregoing, asbestos, PCBs, petroleum products (including crude oil,
natural gas, natural gas liquids, liquified natural gas or synthetic
gas) or any other substance defined as a "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "hazardous
material," "hazardous chemical," "hazardous waste," "regulated
substance," "toxic chemical," "toxic substance" or other similar term
in any Environmental Law.
"Impositions" shall mean (i) all real estate and personal
property taxes, charges, assessments, excises and levies and any
interest, costs or penalties with respect thereto, general and
special, ordinary and extraordinary, foreseen and unforeseen, of any
kind and nature whatsoever, which at any time prior to or after the
execution hereof may be assessed, levied or imposed upon the
Collateral or the ownership, use, occupancy or enjoyment thereof, or
any portion thereof, or the sidewalks, streets or alleyways adjacent
thereto; (ii) any charges, fees, license payments or other sums
7
payable for any easement, license or agreement maintained for the
benefit of the Collateral; and (iii) water, gas, sewer, electricity,
telephone and other utility charges and fees that are or may become
a Lien against the Collateral.
"Indebtedness" shall mean, as applied to any Person at any
time, without duplication (a) all indebtedness, obligations or other
liabilities of such Person (i) for borrowed money or evidenced by
debt securities, debentures, acceptances, notes or other similar
instruments, and any accrued interest, fees and charges relating
thereto; (ii) with respect to letters of credit issued for such
Person's account; (iii) under agreements for the prospective purchase
or repurchase assets other than obligations arising under unexercised
option agreements; (iv) to make future Investments in any Person; (v)
to pay the deferred purchase price of property or services previously
purchased or rendered, except unsecured trade accounts payable and
accrued expenses arising in the ordinary course of business; or (vi)
as a lessee arising under a lease that is required to be capitalized
in accordance with GAAP; (b) all indebtedness, obligations or other
liabilities of such Person or others secured by a Lien on any asset
of such Person, whether or not such Person is otherwise obligated on
such indebtedness, obligations or liabilities are assumed by such
Person, all as of such time; (c) all indebtedness, obligations or
other liabilities of such Person in respect of any foreign exchange
contract or any interest rate swap, cap or collar agreement or
similar arrangement, net of liabilities owed to such Person by the
counterparties thereon; (d) all shares of Capital Stock or equivalent
ownership interest subject (upon the occurrence of any contingency
or otherwise) to mandatory redemption prior to the date the Loan is
scheduled to be repaid in full; (e) obligations of others to the
extent Guaranteed by such Person or to the extent such Person is
otherwise liable on a recourse basis; and (f) such Person's pro rata
share of non-recourse Indebtedness of a partnership in which such
Person is a partner (it being understood that the remaining portion
of such non-recourse partnership Indebtedness shall not constitute
Indebtedness of such Person).
"Indemnitee" has the meaning set forth in Section 9.3(c)
hereof.
"Interest Coverage Ratio" means, as of any date the same is
calculated, the ratio of (a) EBITDA for the fiscal quarter ending on
or most recently ended prior to such date to (b) Interest Expense for
such fiscal quarter, determined in each case on a Combined basis in
accordance with GAAP.
"Interest Expense" means, for any Person for any period, total
interest expense on Indebtedness of such Person, whether paid or
accrued, but without duplication (including the interest component
of capital leases), including, without limitation, (a) all
commissions, discounts and other fees and charges owed with respect
to letters of credit, and (b) one hundred percent (100%) of any
interest expense, whether paid or accrued, of any other Person for
which such Person is wholly or partially liable (whether by
Guarantee, pursuant to Applicable Law or otherwise) but excluding (i)
interest on Reserved Construction Loan and (ii) swap or other
interest hedging breakage costs, all as determined in conformity with
GAAP and (iii) all Interest to a Project.
"Interest Period" means, with respect to a LIBOR Advance, a
period commencing:
(a) on the borrowing date of such LIBOR Advance made
pursuant to Section 2.3(a) of this Agreement; or
(b) on the Conversion Date pertaining to such LIBOR
Advance, if such LIBOR Advance is made pursuant to a conversion
as described in Section 2.3(c) hereof; or
9
(c) on the last day of the preceding Interest Period in
the case of a rollover to a successive Interest Period;
and ending 1, 2, 3, 6 or 12 months thereafter, as Borrower shall
elect in accordance with Section 2.3(c) of this Agreement; provided,
that:
(i) any Interest Period that would otherwise end
on a day which is not a LIBOR Business Day shall be
extended to the next succeeding LIBOR Business Day,
unless such LIBOR Business Day falls in another calendar
month in which case such Interest Period shall end on the
next preceding LIBOR Business Day;
(ii) any Interest Period that begins on the last
LIBOR Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month or at the end of such Interest Period)
shall, subject to Clause (i) above, end on the last LIBOR
Business Day of a calendar month;
(iii) if the Interest Period for any LIBOR Advance
would otherwise end after the final maturity date of the
Loan, then such Interest Period shall end on the final
maturity date of the Loan; and
(iv) if Borrower elects an Interest Period of 12
months with respect to any LIBOR Advance, and any Lender
determines that either deposits in United States Dollars
(in the applicable amounts) are not being offered to it
in the interbank eurodollar market for such Interest
Period or that quotes of the LIBOR Rate are not available
for such Interest Period, then Agent shall give notice
thereof to Borrower, and Borrower shall be deemed to have
elected an Interest Period of 6 months.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Investment" in any Person shall mean any investment, whether
by means of share purchase, loan, advance, extension of credit,
capital contribution or otherwise, in or to such Person, the
Guarantee of any Indebtedness of such Person, or the subordination
of any claim against such Person to other Indebtedness of such
Person.
"Issuing Bank" means Agent or an affiliate of Agent, as the
issuer of Letters of Credit hereunder.
"Lease" means any lease, sublease, license, concession or other
agreement (written or verbal, now or hereafter in effect) to which
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership is a party and which grant a possessory interest in
and to, or the right to use, all or any part of an Eligible Project,
save and except any lease or sublease pursuant to which Borrower, any
Wholly Owned Subsidiary of Borrower or any Subpartnership is granted
a possessory interest in the land underlying such Eligible Project.
"Legal Requirements" shall mean (i) any and all present and
future judicial decisions, statutes, rulings, rules, regulations,
permits, certificates or ordinances of any Governmental Authority in
any way applicable to Borrower, any Wholly Owned Subsidiary of
9
Borrower or any Subpartnership owning an Eligible Project, or the
Collateral, including, without limiting the generality of the
foregoing, the ownership, use, occupancy, possession, operation,
maintenance, alteration, repair or reconstruction thereof; (ii) any
and all covenants, conditions and restrictions contained in any deed
or other form of conveyance or in any other instrument of any nature
that relate in any way or are applicable to the Collateral or the
ownership, use or occupancy thereof; (iii) Borrower's and each such
Wholly Owned Subsidiary's and Subpartnership's presently or
subsequently effective Articles of Partnership, Limited Partnership,
Joint Venture, Trust or other form of business association agreement;
(iv) any Major Agreements and Major Leases; and (v) any lease or
other contract pursuant to which Borrower is granted a possessory
interest in any land.
"Lending Office" means Agent's office located 000 Xxxxxxxxxx
Xxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, or such other
office as Agent may hereafter designate as its Lending Office by
notice to Borrower and Lenders.
"Letter of Credit Obligations" means, collectively, (a) all
reimbursement and other obligations of Borrower in respect of Letters
of Credit, (b) all amounts paid by Agent to the Issuing Bank in
respect of Letters of Credit and (c) all amount paid by the Lenders
to the Agent and/or the Issuing Bank in respect of Letters of Credit.
"Letters of Credit" means the letters of credit made in
connection with the Loan issued by the Issuing Bank for the account
of Borrower in an aggregate face amount not to exceed $10,000,000.00
outstanding at any one time, as they may be drawn on, advanced,
replaced, or modified from time to time.
"LIBOR Advance" means any Advance hereunder with respect to
which the interest rate is calculated by reference to the LIBOR Rate
for a particular Interest Period.
"LIBOR Business Day" means a Business Day on which dealings in
United States Dollars are carried out in the London interbank market.
"LIBOR Rate" means, with respect to any Interest Period, the
rate per annum which is equal to the quotient of the average rate per
annum (determined solely by the Agent and rounded upwards, if
necessary, to the next higher 1/16 of 1%) at which deposits in United
States Dollars are offered to Xxxxx Fargo Bank by brokers in the
London interbank market as of 11:00 a.m. (London time) two (2) LIBOR
Business Days prior to the first day of such Interest Period, in an
amount equal to LIBOR Advance so requested and for a period equal to
such Interest Period. Each determination of the LIBOR Rate by Agent
shall, in absence of manifest error, be conclusive and binding.
"LIBOR Reserve Requirement" means the daily average during the
Interest Period of the maximum aggregate reserve requirement
(including all basic, supplemental, marginal and other reserves and
taking into account any transitional adjustments or other schedule
changes in reserve requirements during the Interest Period) which is
imposed under Regulation D against "Eurocurrency liabilities" as
defined in Regulation D. Each determination by Agent of the LIBOR
Reserve Requirement shall, in the absence of manifest error, be
conclusive and binding.
"Lien" means any deed to secure debt, mortgage, deed of trust
or similar security instruments (including any Mortgage), pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority
10
or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, any title
retention agreement, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of, or
agreement to give, any financing statement perfecting a security
interest under the Uniform Commercial Code or comparable law of any
jurisdiction).
"Loan" means the aggregate principal amount of outstanding
Advances made by Lenders pursuant to Article 2 hereof. From and
after the Term Loan Conversion Date, the term "Loan" shall mean and
refer to the Term Loan.
"Loan Documents" means this Agreement, the Notes and the
Collateral Documents.
"Major Agreements" means, at any time, (a) each operating,
cross-easement, restrictions or similar agreement encumbering or
affecting an Eligible Project and any adjoining property material to
the use and operation of such Project; (b) each management agreement
with respect to an Eligible Project; and (c) any other agreement,
such as engineers' contracts, utility contracts, maintenance
agreements and service contracts, which in any way relates to the
use, occupancy, operation, maintenance, enjoyment or ownership of an
Eligible Project, the breach or loss of which would have a material
adverse effect on such Project.
"Major Lease", with respect to any Eligible Project, shall mean
any lease of 50,000 or more leasable square feet, in the case of any
Project which is a regional mall or 20,000 or more leasable square
feet, in the case of any Project which is a strip center, or (ii)
collectively, the leases of space in the Projects by one or more
tenants which are affiliates or operate under separate leases of
space within the Projects if the aggregate leasable square footage
leased by such affiliates is 50,000 or more leasable square feet, in
the case of any Project which is a regional mall or 20,000 or more
leasable square feet, in the case of any Project which is a strip
center.
"Majority Lenders" shall mean, at any time, Lenders holding at
least sixty-six and two-thirds percent (66_%) of the aggregate
principal amount of the Commitment or, if the Commitment has been
terminated, Lenders holding at least sixty-six and two-thirds percent
(66_%) of the aggregate outstanding principal amount of the Loan;
provided however, in determining such percentage at any given time,
all then existing Defaulting Lenders will be disregarded and excluded
and the Pro Rata Shares of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of such Defaulting
Lenders.
"Maximum Rate" means the highest nonusurious rate of interest
(if any) permitted from day to day by applicable law.
"Mortgage" shall mean a mortgage, deed of trust, deed to secure
debt or similar security instrument made or to be made by a Person
owning real estate or an interest in real estate granting a Lien on
such real estate or interest in real estate as security for the
payment of Indebtedness.
"Net Income" means, with respect to Borrower, CBL Properties,
Inc., and their respective Subsidiaries for any period, net earnings
(or loss) after deducting therefrom all operating expenses, income
taxes and reserves and net earnings (or loss) attributable to
minority interests in Subsidiaries for the period in question,
determined in each case on a Combined basis in accordance with GAAP.
Without limiting the generality of the foregoing, earnings (or
11
losses) from the sale of outparcels in the ordinary course of
business shall be included in determining Net Income.
"Net Operating Income" means, for any Project for the period in
question, but without duplication (a) any cash rentals, proceeds,
expense reimbursements or income earned by such Project (but
excluding security or other deposits, late fees, early lease
termination or other penalties, and other charges deemed by Agent to
be of a non-recurring nature and excluding rent dedicated to the
repayment of Indebtedness secured by a Lien permitted by Section
6.17(b) hereof) during such period; less (b) all cash costs and
expenses that Borrower incurred during such period, as a result of,
or in connection with, the development, operation, or leasing of such
Project (but excluding principal and interest payments during such
period); plus (less) (c) gains (losses) from the sale of outparcels
made in the ordinary course of business; less (c) to the extent
exceeding the amounts for the applicable costs and expenses incurred
by Borrower pursuant (b) above, appropriate accruals for items such
as taxes, insurance, or other expenses reasonably determined by
Agent, in each case determined in accordance with GAAP.
"Net Worth" means, with respect to Borrower, CBL Properties,
Inc. and their Subsidiaries as of any date, the sum of (a) the total
shareholders' equity of CBL Properties, Inc., plus (b) the value of
all minority interests in Borrower, plus (c) cumulative depreciation
and amortization after June 30, 1996, minus (d) all intangible
assets, determined on a Combined basis in accordance with GAAP.
"Non-ERISA Plan" means any Plan subject to Section 4975 of the
Internal Revenue Code.
"Non Pro Rata Advance" means an Advance with respect to which
less than all Lenders have funded their respective Pro Rata Shares
of such Advance and the failure of the non-funding Lender or Lenders
to fund its or their respective Pro Rata Shares of such Advance
constitutes a breach of this Agreement. For purposes of this
definition, the Pro Rate Shares of the Lenders will be calculated
without regard to the proviso contained in the definition of "Pro
Rata Share".
"Notes" means the amended and restated promissory notes
executed by Borrower, substantially in the form of Exhibit A hereto,
payable to each of the Lenders in an amount equal to such Lender's
Commitment, as the same may be amended, supplemented, modified, or
restated from time to time, evidencing the obligation of Borrower to
repay the Loan, and all renewals, modifications and extensions
thereof, and "Note" means any one of the Notes.
"Notice of Borrowing" means a notice substantially in the form
of Exhibit B attached hereto.
"Obligations" means the Loan, the Letter of Credit Obligations
and any and all other Indebtedness, liabilities and obligations of
Borrower to the Lenders, or any of them, or to any Indemnitee, of
every kind and nature (including, without limitation, interest
charges, expenses, attorneys' fees and other sums chargeable to
Borrower by Lenders and future advances made to or for the benefit
of Borrower), arising under this Agreement or under any of the other
Loan Documents, whether direct or indirect, absolute or contingent,
primary or secondary, due or to become due, now existing or hereafter
acquired.
"Permanent Loan Estimate" means, as of any date and with
respect to any Project included in the Borrowing Base, an amount
equal to the quotient of (a) an amount equal to the aggregate Net
Operating Income of such Project for the immediately preceding
twelve (12) month period divided by (b) the product of (i) 1.25 and
(ii) the percent of a principal amount of a loan required to be paid
each year in order to repay the principal amount of such loan in full
based on a twenty-five (25) year amortization, and to pay the amount
of interest due at each installment, utilizing a rate of interest
equal to 1.5% in excess of the average of the rates published during
the four fiscal quarters ending on or most recently prior to such
date in the United States Federal Reserve Statistical Release (H.15)
for 10-year Treasury Constant Maturities, in equal monthly
installments of principal and interest.
"Permitted Liens" means (i) pledges or deposits made to secure
payment of worker's compensation (or to participate in any fund in
connection with worker's compensation insurance), unemployment
insurance, pensions or social security programs, (ii) encumbrances
consisting of zoning restrictions, easements, or other restrictions
on the use of real property, provided that such items do not
materially impair the use of such property for the purposes intended
and none of which is violated in any material respect by existing or
proposed structures or land use, (iii) the following to the extent
no Lien has been filed in any applicable jurisdiction or agreed to:
(A) Liens for taxes not yet due and payable; and (B) Liens imposed
by mandatory provisions of law such as for materialmen's, mechanic's,
warehousemen's and other like Liens arising in the ordinary course
of business, securing payment of Indebtedness whose payment is not
yet due, (iv) Liens for taxes, assessments and governmental charges
or assessments that are being contested in good faith by appropriate
proceedings diligently conducted, and for which reserves or other
adequate security acceptable to Agent have been provided, (v) to the
extent expressly approved in writing by Agent, Liens on Projects
where Borrower and Agent are insured against such Liens by title
insurance acceptable to the Lenders, (vi) Liens securing assessments
or charges payable to a property owner association or similar entity,
which assessments are not yet due and payable, or (vii) other Liens
expressly permitted by the terms of the Mortgages granted by Borrower
or its Affiliates in favor of the Agent.
"Person" means an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other
entity or organization, including a government or political
subdivision or an agency or instrumentality thereof.
"Plan" means at any time an employee pension benefit plan which
is covered by Title IV of ERISA or subject to the minimum funding
standards under Section 412 of the Internal Revenue Code.
"Projects" means the real estate projects owned by Borrower, a
Wholly Owned Subsidiary of Borrower, a Subpartnership or, to the
extent approved by the Supermajority Lenders, any other Person and
"Project" shall mean any one of the Projects.
"Pro Rata Share" means, with respect to any Lender, the
percentage obtained by dividing (a) such Lender's Commitment by (b)
the aggregate Commitments of all Lenders, or, if the Commitments
shall have been terminated, the percentage obtained by dividing (x)
the aggregate unpaid principal amount of such Lender's Note or Notes
by (y) the aggregate unpaid principal amount of all Lenders' Notes;
provided however, in determining such percentage at any given time,
all then existing Defaulting Lenders will be disregarded and excluded
and the Pro Rata Shares of Lenders shall be redetermined to exclude
the Pro Rata Shares of such Defaulting Lenders.
13
"Protective Advance" means all sums expended as determined by
Agent to be necessary to: (a) protect the priority, validity and
enforceability of the Liens on, and security interests in, any
Collateral and the instruments evidencing or securing the
Obligations, or (b) (i) prevent the value of any Collateral from
being materially diminished (assuming the lack of such a payment
within the necessary time frame could potentially cause such
Collateral to lose value), or (ii) protect any of the Collateral from
being materially damaged, impaired, mismanaged or taken, including,
without limitation, any amounts expended in accordance with
Section 9.3 or post-foreclosure ownership, maintenance, operation or
marketing of any Eligible Project.
"Rate Selection Notice" has the meaning set forth in Section
2.3(c) hereof. Each Rate Selection Notice shall be substantially in
the form of Exhibit C attached hereto.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System from time to time in effect
and shall include any successor or other regulation relating to
reserve requirements applicable to member banks of the Federal
Reserve System.
"REIT" means a real estate investment trust qualified under the
Internal Revenue Code.
"Reserved Construction Loan" shall mean a construction loan
extended to Borrower or a Subsidiary of Borrower for the construction
of a Project in respect of which: (a) neither any monetary or
material non-monetary default nor any event of default exists; (b)
interest on such loan has been budgeted to accrue at a rate of not
less than the Base Rate plus two percent (2%) at the time the
interest reserve account is established; (c) the amount of such
budgeted interest has been (i) included in the principal amount of
such loan and (ii) segregated into an interest reserve account (which
shall include any arrangement whereby loan proceeds equal to such
budgeted interest are reserved and only disbursed to make interest
payments in respect of such loan); (d) absent an event of default or
a monetary or material non-monetary default, such interest can be
paid out of such interest reserve account only for the purpose of
making interest payments on such loan; (e) the amount held in such
interest reserve account in respect of such loan, together with the
net income if any, from such Project projected by the Agent in its
reasonable judgment, will be sufficient, as reasonably determined by
the Agent from time to time, to pay all Interest Expense on such loan
until the date that the EBITDA of the Project being financed by such
loan is anticipated to be sufficient to pay all Interest Expense on
such loan; and (f) Borrower has delivered all certificates required
by Section 6.1(f) hereof.
"Senior Officer" shall mean, with respect to Borrower or CBL
Properties, Inc., the President, any Senior Executive Vice President,
Executive Vice President or Senior Vice President of CBL Properties,
Inc.
"Significant Subsidiary" shall mean any Subsidiary which either
(a) owns any of the Collateral or (b) has assets having an aggregate
book value in excess of $500,000.
"Subpartnership" means any partnership in which Borrower is the
sole general partner or managing general partner, and in which CBL
Properties, Inc. is the sole limited partner or sole other general
partner. For purposes of clarity, each Subpartnership is a
Subsidiary of Borrower.
"Subsidiary" shall mean, as to any Person, any other Person,
more than fifty percent (50%) of the outstanding shares of Capital
Stock, partnership interest or other ownership interest, having
ordinary voting power to elect a majority of the board of directors
or similar governing body of such other Person (irrespective of
14
whether or not at the time stock or other ownership interests of any
other class or classes of such other Person shall have or might have
voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or by
one or more "Subsidiaries" of such Person, and whose financial
reports are prepared on a consolidated basis with such Person.
"Wholly Owned Subsidiary" shall mean any such Person of which all of
the shares of Capital Stock or ownership interests (other than, in
the case of a corporation, directors' qualifying shares) are so owned
or controlled. For purposes of this Agreement CBL Management, Inc.
shall be deemed to be a Subsidiary of Borrower.
"Supermajority Lenders" shall mean, at any time, Lenders
holding at least eighty-five percent (85%) of the aggregate principal
amount of the Commitment or, if the Commitment has been terminated,
Lenders holding at least eighty-five percent (85%) of the aggregate
outstanding principal amount of the Loan; provided however, in
determining such percentage at any given time, all then existing
Defaulting Lenders will be disregarded and excluded and the Pro Rata
Shares of Lenders shall be redetermined, for voting purposes only,
to exclude the Pro Rata Shares of such Defaulting Lenders.
"Term Loan" has the meaning set forth in Section 2.12 hereof.
"Term Loan Conversion Date" has the meaning set forth in
Section 2.12 hereof.
"Term Loan Termination Date" means the date which is three (3)
years after the Term Loan Conversion Date.
"Termination Date" means the earlier to occur of (a) September
26, 1999, or such later date to which the Termination Date may be
extended by the written agreement of the Borrower, the Agent and all
the Lenders pursuant to Section 2.11 hereof, (b) the date Lenders'
Commitment to fund Advances are terminated pursuant to Section 7.2
hereof or (c) the date that Lender's Commitments are reduced to zero
by Borrower pursuant to Section 2.1 hereof.
"Total Obligations" means, as of any date, the sum (without
duplication) of (a) the Indebtedness of Borrower, CBL Properties,
Inc. and their respective Subsidiaries (other than Indebtedness
described in clauses (a)(iii) and (a)(iv) of the definition thereof);
plus (b) the aggregate amount of Contingent Obligations of Borrower,
CBL Properties, Inc. and their respective Subsidiaries in respect of
Indebtedness (other than Indebtedness described in clauses (a)(iii)
and (a)(iv) of the definition thereof); plus (c) Borrower's, CBL
Properties, Inc.'s or their respective Subsidiaries' proportionate
share of Indebtedness (other than Indebtedness described in clauses
(a)(iii) and (a)(iv) of the definition thereof) of any Unconsolidated
Affiliate, whether or not Borrower, CBL Properties, Inc. or such
Subsidiary is obligated on such Indebtedness; plus (d) all other
amounts which would be classified as a liability on the consolidated
balance sheets of Borrower or CBL Properties, Inc., determined in
each case on a Combined basis in accordance with GAAP.
"Unconsolidated Affiliate" shall mean, in respect of any
Person, any other Person in whom such Person holds an Investment,
which Investment is accounted for in the financial statements of such
Person on an equity basis of accounting.
15
"Unused Facility Fee" has the meaning set forth in Section
2.8(a) hereof.
1.2 Use of Defined Terms. All terms defined in this Agreement
and the Exhibits hereto shall have the same defined meanings when
used in any other Loan Document, unless the context shall require
otherwise.
1.3 Accounting Terms, Calculation. (a) Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the
Lenders hereunder shall (unless otherwise disclosed to the Lenders
in writing at the time of delivery thereof in the manner described
in subsection (b) below) be prepared, in accordance with generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the latest financial statements
furnished to the Lenders hereunder (which, prior to the delivery of
the first financial statements under Section 6.1 hereof, shall mean
the certified financial statements as at June 30, 1996 referred to
in Section 5.4 hereof). All calculations made for the purposes of
determining compliance with this Agreement shall (except as otherwise
expressly provided herein) be made by application of generally
accepted accounting principles applied on a basis consistent with
those used in the preparation of the annual or quarterly financial
statements furnished to the Lenders pursuant to Section 6.1 hereof
most recently prior to or concurrently with such calculations (or,
prior to the delivery of the first financial statements under
Section 6.1 hereof, used in the preparation of the certified
financial statements as at June 30, 1996 referred to in Section 5.4
hereof) unless (i) either (x) Borrower shall have objected to
determining such compliance on such basis at the time of delivery of
such financial statements or (y) the Majority Lenders shall so object
in writing within 30 days after delivery of such financial statements
and (ii) Borrower and the Majority Lenders have not agreed upon
amendments to the provisions of this Agreement to reflect any change
in such basis, in which event such calculations shall be made on a
basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been
made (which, if objection is made in respect of the first financial
statements delivered under Section 6.1 hereof, shall mean the
financial statements referred to in Section 5.4 hereof).
(b) Borrower shall deliver to the Lenders at the same
time as the delivery of any annual or quarterly financial statement
under Section 6.1 hereof (i) a description in reasonable detail of
any material variation between the application of accounting
principles employed in the preparation of such statement and the
application of accounting principles employed in the preparation of
the next preceding annual or quarterly financial statements as to
which no objection has been made in accordance with the last sentence
of subsection (a) above and (ii) reasonable estimates of the
difference between such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Article 6 hereof, Borrower
will not change the last day of its fiscal year from December 31 of
each year, or the last days of the first three fiscal quarters in
each of its fiscal years from March 31, June 30 and September 30 of
each year, respectively, without the prior written approval of the
Majority Lenders.
1.4 Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or neuter gender,
shall include all other genders; the singular shall include the
plural, and the plural shall include the singular. Titles of
Sections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement, and all
references in this Agreement to Sections, Subsections, paragraphs,
clauses, subclauses, Exhibits or Schedules shall refer to the
corresponding Section, Subsection, paragraph, clause, subclause of,
Exhibit or Schedule attached to, this Agreement, unless specific
16
reference is made to the articles, sections or other subdivisions
of, Exhibits or Schedules to, another document or instrument. All
Exhibits and Schedules attached hereto are by reference made a part
hereof. All references to any instrument, document or agreement
shall, unless the context otherwise requires, refer to such
instrument, document or agreement as the same may be, from time to
time, amended, modified, supplemented, renewed, extended, replaced
or restated. In the event that the Section references contained in
any Mortgage granted to the Agent on an Eligible Project (a "Project
Mortgage") vary from the Section references set forth in the form of
Mortgage attached hereto as Exhibit D (the "Form Mortgage"), any
reference contained in this Agreement to a specific section of a
Mortgage shall, when applied to such Project Mortgage, be deemed to
refer to the section in the Project Mortgage which most closely
corresponds to the text of specified section in the Form Mortgage.
ARTICLE 2.
THE LOAN
SECTION 2.1 Commitment to Lend. Subject to the terms and
conditions set forth in this Agreement, so long as there exists no
(i) Default under Sections 7.1(a), 7.1(g) or 7.1(h) hereof, (ii)
other Default as to which Agent has given Borrower notice or (iii)
Event of Default, each Lender severally agrees to make loans (each
an "Advance" and collectively the "Advances") to Borrower from time
to time on any Business Day or LIBOR Business Day, as appropriate,
during the period from and including the Effective Date to, but not
including, the Term Loan Conversion Date (in the event the Loan is
converted into the Term Loan) or the Termination Date (in the event
the Loan is not converted into the Term Loan) in a principal amount
not to exceed the lesser of (a) such Lender's Commitment less such
Lender's Pro Rata Share of the aggregate face amount of outstanding
Letters of Credit or (b) such Lender's Pro Rata Share of the amount
equal to (i) the Borrowing Base less (ii) the aggregate face amount
of the outstanding Letters of Credit. Advances hereunder made at any
one time shall be in an aggregate principal amount of not less than
$200,000.00 or any larger multiple of $25,000.00 (except that any
Base Rate Advance may be in the aggregate amount of the unused
Commitments). Within the foregoing limits, Borrower may borrow under
this Section 2.1, prepay the Advances as provided in this Agreement,
and reborrow at any time prior to the Term Loan Conversion Date (in
the event the Loan is converted into the Term Loan) or the
Termination Date (in the event the Loan is not converted into the
Term Loan) under this Section 2.1. Borrower shall have the right,
upon (3) Business Days' prior written notice to Agent, to permanently
reduce the unutilized portion of the Commitments; provided that any
portion of the reduction shall be in the minimum amount of
$1,000,000.00 or in any integral multiple thereof.
SECTION 2.2 Letters of Credit.
(a) Subject to the terms and conditions set forth in this
Agreement, at any time and from time to time through the day that is
the earlier to occur of the Term Loan Conversion Date or thirty (30)
days prior to the Termination Date, the Agent shall cause the Issuing
Bank to issue such Letters of Credit for the account of Borrower as
the Borrower may request by a request for Letter of Credit; provided
that (i) upon issuance of such Letters of Credit, the sum of the
aggregate principal amount of all outstanding Advances plus the
aggregate face amount of all outstanding Letters of Credit shall not
exceed the lesser of (A) the Borrowing Base or (B) then applicable
aggregate amount of the Commitments; (ii) the aggregate face amount
of all outstanding Letters of Credit (including without limitation
17
the requested Letter of Credit) shall not exceed Ten Million Dollars
($10,000,000); and (iii) unless all the Lenders otherwise consent in
writing, the term of any Letter of Credit shall not extend beyond the
Termination Date and no Letter of Credit shall contain an automatic
extension or renewal clause.
(b) Borrower shall deliver to the Agent a duly executed
request for Letter of Credit not later than 9:00 A.M., Pacific Time,
at least five (5) Business Days prior to the date upon which the
requested Letter of Credit is to be issued. The Borrower shall
further deliver to the Agent and the Issuing Bank such additional
instruments and documents as the Agent and/or the Issuing Bank may
require, in conformity with the then standard practices of its letter
of credit department, in connection with the issuance of such Letter
of Credit.
(c) The Agent shall, if it approves of the content of the
request for Letter of Credit (which approval shall not be
unreasonably withheld) give prompt written notice to the Lenders upon
the approval of the request, and subject to the conditions set forth
in this Agreement, cause the issuance of the Letter of Credit on or
before 5:00 p.m. Pacific Time, on or before the day five (5) Business
Days following receipt of the documents last due pursuant to Section
2.2(b). Upon issuance of a Letter of Credit, the Agent shall
promptly notify the Lenders of the amount and terms thereof. The
Agent shall provide copies of each Letter of Credit to the Lenders
promptly following issuance thereof and shall notify the Lenders
promptly of all payments, reimbursements, expirations, negotiations,
transfers and other activity with respect to outstanding Letters of
Credit.
(d) Upon the issuance of a Letter of Credit, each Lender shall
be deemed to have purchased a pro rata issuer participation therein
from the Issuing Bank in an amount equal to the Lender's Pro Rata
Share of the face amount of the Letter of Credit.
(e) If and to the extent that any amounts are drawn upon any
Letters of Credit the amount so drawn shall immediately be paid by
Agent to the Issuing Bank, and, from the date of payment thereof by
the Issuing Bank, shall be considered (i) so long as there exists no
Default or Event of Default, an Advance of the Agent for all purposes
hereunder and (ii) if there then exists a Default or Event of
Default, a purchase by the Agent of the Issuing Bank's right to
reimbursement in respect of such Letter of Credit.
(f) Promptly after payment by the Issuing Bank of any amount
drawn upon any Letter of Credit, the Agent shall, without notice to
or the consent of the Borrower, direct the Lenders to advance to the
Agent, their Pro Rata Share of the amount so drawn. The proceeds of
such advances shall be applied by the Agent to reimburse it for the
payment made by it to the Issuing Bank under the Letter of Credit.
All amounts paid by the Lenders pursuant to this Section 2.2(f) shall
be deemed to be (i) so long as there exists no Default or Event of
Default, Base Rate Advances made pursuant to this Agreement and (ii)
if there then exists a Default or Event of Default, a purchase by
each Lender of a participation in the Letter of Credit Obligations
in respect of such Letter of Credit.
(g) On the occurrence of (i) the Termination Date (in the
event the Loan is not converted into the Term Loan), or (ii) the Term
Loan Termination Date (in the event the Loan is converted into the
Term Loan), prior to the expiration of all Letters of Credit, the
Borrower shall provide to the Agent a standby letter of credit issued
by a bank satisfactory to the Agent, in form and substance
satisfactory to the Agent, in favor of the Agent in a face amount
equal to outstanding Letters of Credit on that date, or shall make
other provisions satisfactory to the Agent for the full
collateralization, by cash or cash equivalent, of such outstanding
Letter of Credit. In the event of failure of the Borrower to comply
19
with the requirement of this Section 2.2(g), such portion of the
face amount of all outstanding Letters of Credit as to which the
Borrower has failed to comply shall be deemed to be immediately due
and payable.
(h) The issuance of any supplement, modification, amendment,
renewal, or extension to or of any Letter of Credit shall be treated
in all respects the same as issuance of a new Letter of Credit.
(i) Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its
use of such Letter of Credit. Neither the Issuing Bank, the Agent,
any Lender nor any of their respective officers or directors shall
be liable or responsible for, nor shall Borrower's obligations
hereunder in respect of such Letters of Credit be impaired as a
result of:
(i) any lack of validity or enforceability of any Letter
of Credit or any other agreement or instrument relating thereto
(such Letter of Credit and any other agreement or instrument
relating thereto being, collectively, the "Letter of Credit
Documents");
(i) the use that may be made of any Letter of Credit or
any acts or omissions of any beneficiary or transferee in
connection therewith;
(ii) any statement or any other document presented under
a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iii) the existence of any claim, set-off, defense
or other right that the Borrower may have at any time against
any beneficiary or any transferee of a Letter of Credit (or any
Persons for whom any such beneficiary or any such transferee
may be acting), the Issuing Bank or any other Person, whether
in connection with the transactions contemplated by the Letter
of Credit Documents or any unrelated transaction;
(iv) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of
Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit; or
(v) any other circumstances whatsoever in making or
failing to make payment under any Letter of Credit.
In furtherance and not in limitation of the foregoing, the Issuing
Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any
notice or information to the contrary
SECTION 2.3 Method of Borrowing.
(a) Application for Advance. Borrower shall deliver to Agent
a Notice of Borrowing not later than 10:00 A.M. (Pacific Standard
Time or Pacific Daylight Time, as applicable) at least one (1)
Business Day prior to the date such Advance is to be made, in the
case of a Base Rate Advance, and at least three (3) LIBOR Business
Days prior to the date such Advance is to be made, in the case of a
LIBOR Advance. Prior to delivering a Notice of Borrowing, Borrower
19
may (without specifying whether the Advance shall be a Base Rate
Advance or a LIBOR Advance) request that Agent provide Borrower with
the most recent LIBOR Rate available to Agent. Agent shall endeavor
to provide such quoted rate to Borrower and to Lenders on the date
of such request.
(b) Funding.
(i) Promptly after receipt of a Notice of Borrowing under
Section 2.3(a), Agent shall send a copy thereof to each Lender
by telex or telecopy, or other similar form of transmission.
Each Lender shall deposit an amount equal to its Pro Rata Share
of the Advance requested by Borrower with Agent at its Lending
Office, in immediately available funds not later than 10:00
A.M. (Pacific Standard Time or Pacific Daylight Time, as
applicable) on the date such Advance is to be made. Upon
fulfillment of all applicable conditions set forth herein,
Agent shall make available to Borrower at Agent's Lending
Office, not later than 2:00 P.M. (Pacific Standard Time or
Pacific Daylight Time, as the case may be) on the date of each
Advance, the proceeds of such amounts received by Agent. The
failure of any Lender to deposit the amount described above
with Agent shall not relieve any other Lender of its
obligations hereunder to make its Pro Rata Share of the
Advance.
(ii) Unless Agent shall have been notified by any Lender
that such Lender will not make available to Agent such Lender's
Pro Rata Share of a proposed Advance, Agent may in its
discretion assume that such Lender has made such Advance
available to Agent in accordance with this Section 2.3(b) and
Agent may, if it chooses, in reliance upon such assumption,
make such Advance available to Borrower. If and to the extent
such Lender shall not so make its Pro Rata Share of the
proposed Advance available to Agent, such Lender and Borrower
severally agree to pay or repay to Agent within two (2) days
after demand the amount of such Advance together with interest
thereon, for each day from the date such Advance is made
available to Borrower until the date such amount is paid or
repaid to Agent at (A) in the case of Borrower, the interest
rate applicable at the time to other Lenders' Advances made on
the date of such Advance, (B) in the case of such Lender, the
Federal Funds Rate. If such Lender shall pay to Agent such
amount, such amounts so repaid shall constitute such Lender's
Advance for purposes of this Agreement. If such Lender shall
fail to pay such amount to Agent and Borrower repays such
amount to Agent, Borrower shall be entitled to pursue any
remedies it might have against such Lender under this Agreement
or at law or in equity for failure to make such Advance.
(c) Selection of Interest Period. Upon delivering a Notice
of Borrowing under Section 2.3(a) hereof, Borrower shall advise Agent
as to whether the Advance shall be (i) a LIBOR Advance, in which case
Borrower shall specify the applicable Interest Period therefor, or
(ii) a Base Rate Advance. Prior to 2:00 P.M. at least three (3)
LIBOR Business Days prior to the expiration of each Interest Period
with respect to a LIBOR Advance, Borrower shall give Agent notice (a
"Rate Selection Notice"), specifying whether such Advance shall, on
the last day of such Interest Period, be continued as a LIBOR Advance
or converted to a Base Rate Advance. With respect to any Base Rate
Advance, Borrower shall have the right, on any LIBOR Business Day,
as the case may be ("Conversion Date"), to convert such Base Rate
Advance to a LIBOR Advance, by giving Agent a Rate Selection Notice
of such selection at least three (3) LIBOR Business Days prior to
such Conversion Date. Each Rate Selection Notice shall either be in
writing or by telephone immediately followed by written notice. If
any Rate Selection Notice shall specify that said Advance shall be
a LIBOR Advance, such Rate Selection Notice shall also specify the
length of the succeeding Interest Period selected by Borrower with
respect to such Advance. If a Rate Selection Notice shall not have
been timely received by Agent in respect of a LIBOR Advance prior to
the expiration of the then-relevant Interest Period for such LIBOR
21
Advance, then Borrower shall be deemed to have elected to continue
such Advance as a LIBOR Advance, with an Interest Period of thirty
(30) days. Promptly after receipt of a Rate Selection Notice under
this Section 2.3(c), Agent shall send a copy thereof to each Lender
by telex or telecopy, or similar form of transmission.
Notwithstanding anything to the contrary contained herein, (i)
no more than four (4) Interest Periods shall be in effect at any one
time with respect to LIBOR Advances; (ii) Borrower shall have no
right to select an Interest Period of longer than one (1) month if
at the time of such LIBOR Advance, the outstanding principal balance
of the Loan exceeds the Borrowing Base or, to the extent Borrower is
then permitted to request LIBOR Advances, if there exists any Default
hereunder; (iii) Borrower shall have no right to request an Interest
Period (A) in the event the Loan has not been converted into the Term
Loan, that extends beyond the Termination Date, or (B) in the event
the Loan has been converted into the Term Loan, that extends beyond
a date on which a quarterly principal payment on the Term Loan is due
unless, giving effect to such Interest Period, the aggregate amount
of LIBOR Advances having Interest Periods ending after such date is
not greater than the principal amount of the Term Loan scheduled to
be outstanding after such date; and (iv) Borrower shall have no right
to request a LIBOR Advance if (A) there then exists any (1) Event of
Default; (2) Default under Sections 7.1(a), 7.1(g) or 7.1(h) hereof,
(3) other Default as to which Agent has given Borrower notice, or (B)
the interest rate applicable thereto under Section 2.5 would exceed
the Maximum Rate in effect on the first day of the Interest Period
applicable to such LIBOR Advance.
Each Notice of Borrowing and each Rate Selection Notice shall
be considered delivered only upon actual receipt thereof by the
Agent, shall be irrevocable and binding on Borrower and, in respect
of any LIBOR Advance specified in such Notice of Borrowing or Rate
Selection Notice, Borrower shall indemnify Agent and each Lender
against any Consequential Loss incurred by Agent and each Lender as
a result of (i) any failure to fulfill, on or before the date
specified for such Advance, the conditions to such Advance set forth
herein, or (ii) Borrower's requesting that an Advance not be made,
continued or converted on the date specified for such Advance in the
Notice of Borrowing or Rate Selection Notice. A certificate of Agent
and each Lender establishing the amount due from Borrower according
to the preceding sentence, together with a description in reasonable
detail of the manner in which such amount has been calculated, shall
be conclusive in the absence of manifest error.
SECTION 2.4 Notes. Each Lender's Pro Rata Share of the Loan
shall be evidenced by a Note payable to the order of such Lender in
the principal face amount equal to such Lender's Commitment.
SECTION 2.5 Interest Rate.
(a) All Advances. The unpaid principal of each Base Rate
Advance shall bear interest from the date of such Advance to but not
including the date such Advance is either converted pursuant to
Section 2.3(c) or is repaid in full at a rate per annum that shall
from day to day be equal to the lesser of (i) the Base Rate in effect
from day to day, or (ii) the Maximum Rate. The unpaid principal of
each LIBOR Advance shall bear interest from the date of such Advance
to but not including the date such Advance is either converted
pursuant to Section 2.3(c) or is repaid in full at a rate per annum
that shall be equal to the lesser of (i) the LIBOR Rate for the then
applicable Interest Period plus one and one-half percent (1.50%), or
(ii) the Maximum Rate.
21
(b) Default Rate. Upon the occurrence of an Event of Default,
all principal of, and to the extent permitted by applicable law,
interest on the Obligations shall bear interest until paid at the
lesser of (i) the Base Rate from time to time in effect plus two
percent (2%), or (ii) the Maximum Rate. Such lesser rate is referred
to herein and in the Loan Documents as the "Default Rate".
(c) Late Fee. Borrower acknowledges that late payment to
Agent will cause Agent and Lenders to incur costs not contemplated
by this Agreement, including, but not limited to, processing and
accounting charges. Accordingly, in the event Borrower fails to make
any payment hereunder within fifteen (15) days after the date such
payment is due and payable, Borrower shall pay to the Agent, for the
benefit of the Lenders, as liquidated damages for the purpose of
defraying the expense incident to handling such delinquent payment
and not as a penalty, a late charge equal to three percent (3%) of
the amount of such payment, whether such payment is of principal,
interest, fees, expenses or other amounts due hereunder or under the
Loan Documents; provided, however, that in the event that (i)
Borrower has not been invoiced for any payment hereunder (other than
principal payments) within fifteen (15) days after the date such
payment was due, and (ii) Borrower requested in writing such invoice
from Agent not later than ten (10) days after the date such payment
was due, Borrower shall not be required to pay such late fee unless
such payment remains unpaid fifteen (15) days after Borrower's
receipt of such invoice. Borrower and Agent agree that this late
charge represents a reasonable sum considering all of the
circumstances existing on the date hereof and represents a fair and
reasonable estimate of the costs that Agent and Lenders will incur
by reason of late payment. Borrower and Agent further agree that
proof of actual damages would be costly and inconvenient. Acceptance
of any late charge shall not constitute a waiver of the default with
respect to the overdue installment (except to the extent payment of
such late charge is accompanied by payment of the Obligations in
full), and shall not prevent Agent from exercising any of the other
rights available hereunder or any other Loan Document. Such late
charge shall be paid without prejudice to any other rights of Agent.
Payment of any late charge hereunder may be waived upon the consent
of the Majority Lenders.
(d) Recapture Rate. If the applicable interest rate ever
exceeds the Maximum Rate thereby causing the interest charged on the
Obligations to be limited to the Maximum Rate, then, to the extent
permitted by Applicable Law, any subsequent reductions in the
applicable interest rate shall not reduce the rate of interest
charged hereunder below the Maximum Rate until the total amount of
interest accrued on the Obligations equals the amount of interest
that would have accrued thereon if the applicable contract rate had
at all times been in effect.
SECTION 2.6 Special Provisions for LIBOR Advances.
(a) Inadequacy of LIBOR Pricing. If with respect to an
Interest Period for any LIBOR Advance, Agent reasonably determines
that, by reason of circumstances occurring subsequent to the date
hereof affecting the interbank eurodollar market generally, either
deposits in United States Dollars (in the applicable amounts) are not
being offered to Xxxxx Fargo Bank in the interbank eurodollar market
for such Interest Period or that quotes of the LIBOR Rate are not
generally available, then Agent shall forthwith give notice thereof
to Borrower and Lenders, whereupon until Agent notifies Borrower that
the circumstances giving rise to such suspension no longer exist, (A)
the obligation of Lenders to make LIBOR Advances shall be suspended,
and (B) Borrower shall either (x) repay in full the then-outstanding
principal amount of the LIBOR Advances, together with accrued
interest thereon on the last day of the then-current Interest Period
applicable to such LIBOR Advances, or (y) convert such LIBOR Advances
to Base Rate Advances in accordance with Section 2.3(c) of this
Agreement
22
on the last day of the then-current Interest Period applicable to
each such LIBOR Advance.
(b) Illegality of LIBOR Advances. If, after the date of this
Agreement, the adoption of any applicable law, rule or regulation,
or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender with any request
or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency shall make it unlawful
or impossible for any Lender to make, maintain or fund its LIBOR
Advances, such Lender shall forthwith give notice thereof to Agent
and Borrower. Before giving any notice pursuant to this Section
2.6(b) such Lender shall designate a different LIBOR lending office
if such designation will avoid the need for giving such notice and
will not be otherwise disadvantageous to such Lender (as determined
in good faith by such Lender). Upon receipt of such notice, Borrower
shall either (i) repay in full the then outstanding principal amount
of any of such Lender's LIBOR Advances, together with accrued
interest thereon, or (ii) convert such Lender's LIBOR Advances to
Base Rate Advances, on either (A) the last day of the then-current
Interest Period applicable to such LIBOR Advance if such Lender may
lawfully continue to maintain and fund such LIBOR Advance to such day
or (B) immediately if such Lender may not lawfully continue to fund
and maintain such LIBOR Advance to such day.
(c) Increased Costs. If, after the date hereof, any
Governmental Authority, central bank or other comparable authority,
shall at any time impose, modify or deem applicable any reserve
(including, without limitation, the LIBOR Reserve Requirement and any
other reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender, or shall impose on any Lender (or its eurodollar
lending office) or the interbank eurodollar market any other
condition affecting its LIBOR Advances, such Lender's Note, its
obligation to make LIBOR Advances or its obligations to issue,
maintain or participate in Letters of Credit; and the result of any
of the foregoing is to increase the cost to such Lender of making or
maintaining its LIBOR Advances or of agreeing to issue or of issuing,
maintaining or participating in Letters of Credit, or to reduce the
amount of any sum received or receivable by such Lender under this
Agreement, or under such Lender's Note, by an amount deemed by such
Lender to be material, then, within five (5) days after demand by
such Lender, Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender for such increased cost or
reduction with respect to such Lender's Note, its obligation to make
or maintain LIBOR Advances or its obligations to issue, maintain or
participate in Letters of Credit. Such Lender will use good faith
and reasonable efforts to designate a different lending office for
such Lender's LIBOR Advances if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the
sole opinion of such Lender, be disadvantageous to such Lender. A
certificate of such Lender claiming compensation under this Section
2.6(c) and setting forth in reasonable detail the calculation of the
additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. If such Lender demands
compensation under this Section 2.6(c) in respect of its LIBOR
Advances, then Borrower may at any time, upon at least five (5)
Business Days' prior notice to such Lender, either (i) repay in full
such Lender's then outstanding LIBOR Advances, together with accrued
interest thereon to the date of prepayment or (ii) convert such
Lender's LIBOR Advances to Base Rate Advances in accordance with the
provisions of this Agreement; provided, however, that Borrower shall
be liable for any Consequential Loss arising pursuant to such
actions, unless the requirement or condition giving rise to the
incurred costs is not generally applicable to lenders similar to the
affected Lender, but rather is applicable solely to such Lender.
23
(d) Effect on Base Rate Advances. If notice has been given
pursuant to Section 2.6(a) or Section 2.6(b) requiring LIBOR Advances
of a Lender to be repaid or converted, then unless and until Agent
notifies Borrower that the circumstances giving rise to such
repayment no longer apply, all Advances shall be Base Rate Advances.
If Agent notifies Borrower that the circumstances giving rise to such
repayment no longer apply, Borrower may thereafter select Advances
from such Lender to be LIBOR Advances in accordance with Section 0
of this Agreement.
(e) Payments Not At End of Interest Period. If Borrower makes
any payment of principal with respect to any LIBOR Advance on any day
other than the last day of an Interest Period applicable to such
LIBOR Advance (other than any such payment required by Section 0
hereof), then Borrower shall reimburse Lenders on demand the
Consequential Loss incurred by Lenders as a result of the timing of
such payment. A certificate of any Lender setting forth in
reasonable detail the basis for the determination of the amount of
Consequential Loss shall be delivered to Borrower by Agent and shall,
in the absence of manifest error, be conclusive and binding. Any
conversion of a LIBOR Advance to a Base Rate Advance on any day other
than the last day of the Interest Period for such LIBOR Advance shall
be deemed a payment for purposes of this Section 0.
(f) Each Lender shall notify Borrower and the Agent of any
event occurring after the date of this Agreement entitling such
Lender to compensation under Section 2.6(c) within 45 days after such
Lender obtains actual knowledge thereof; provided that if any Lender
fails to give such notice to Borrower within 45 days after it obtains
actual knowledge of such an event, such Lender shall, with respect
to compensation payable pursuant to such subsection (c) in respect
of any costs resulting from such event, only be entitled to payment
under subsection (c) for costs incurred from and after the date 45
days prior to the date that such Lender gives such notice.
SECTION 2.7 Payments.
(a) Payment of Interest. Interest on the unpaid principal
amount of each Advance shall be payable monthly as it accrues on the
first day of each month, commencing with the first such day occurring
after the date of the Initial Advance, and thereafter until the Loan
is paid in full.
(b) Payment of Principal of Loan. Subject to Section 2.12,
the Loan shall be due and payable in full on the Termination Date.
(c) Payment of Principal of Term Loan. Borrower shall repay
the principal balance of the Term Loan in twelve equal consecutive
quarterly installments, with the first installment due on the first
day of the month immediately following the date which is ninety (90)
days after the Term Loan Conversion Date, the second through eleventh
installments due on the first day of the month every three (3) months
thereafter, and the final installment due on the Term Loan
Termination Date.
(d) Optional Prepayments. Borrower may, upon at least one (1)
Business Day's notice to Agent, prepay the Loan in whole at any time,
or from time to time in part in an amount equal to $100,000.00 or
any greater amount which would reduce the outstanding principal
balance of the Loan to a multiple of $100,000.00, by paying the
principal amount to be prepaid together with accrued interest thereon
to the date of prepayment; provided, however, that if Borrower shall
prepay the principal of any LIBOR Advance on any date other than the
last day of the Interest
24
Period applicable thereto, Borrower shall simultaneously therewith
make the payments required by Section 2.1 hereof; provided further,
however, that Borrower shall not make any prepayment which would
reduce the outstanding principal balance of the Loan to zero unless
Borrower concurrently reduces the Commitments to zero pursuant to
Section 2.1. Any such prepayment made on the Term Loan on or after
the Term Loan Conversion Date shall be applied to the principal
installments of the Loan in the inverse order of their maturity.
(e) Mandatory Prepayments.
(i) In the event the sum of the outstanding principal
balance of the Advances made by any Lender plus such Lender's Pro
Rata Share of the aggregate face amount of the outstanding Letters
of Credit exceeds such Lender's Commitment, Borrower shall, within
two (2) days after demand therefor, pay to Agent for the benefit of
such Lender, the amount by which such Advances and the Lender's Pro
Rata Share of the outstanding Letters of Credit exceeds such lender's
Commitment.
(ii) In the event the sum of the outstanding principal
balance of the Loan plus the aggregate face amount of the outstanding
Letters of Credit exceeds the Borrowing Base at any time other than
by reason of a reduction of the Borrowing Base pursuant to Section
3.1(b)(ii), Borrower shall, within thirty (30) days after such date,
deliver to each Lender a plan acceptable to the Lenders for bringing
the Loan within the Borrowing Base within ninety (90) days after the
acceptance of such plan through the payment of such excess, the
admission of additional Projects into the Borrowing Base, or through
other means acceptable to Lenders in their sole discretion. Lenders
agree that they will review and respond to such proposed plan in a
reasonably prompt manner. In the event either (A) Borrower fails to
deliver an acceptable plan to the Lenders within said thirty (30)
days or (B) the Loan continues to exceed the Borrowing Base for
ninety (90) days following delivery of an acceptable plan (or, if the
Lenders, in their discretion, consent to a period longer than 90 days
as a part of any such plan, beyond the end of such longer period),
Borrower shall prepay the amount of the Loan in excess of the
Borrowing Base, together with accrued interest thereon (collectively,
the "Overadvance Amount"), as follows:
(1) on such thirtieth (30th) day, ninetieth (90th) day
or the last day of such longer period as the Lenders, in their
discretion, have approved, as the case may be, (the "Applicable
Date"), Borrower shall prepay an amount equal to the lesser of
the Overadvance Amount and the outstanding principal amount of
Base Rate Advances;
(2) to the extent that the outstanding principal amount
of Base Rate Advances are less than the Overadvance Amount, on
the last day of each Interest Period to expiring after the
Applicable Date, Borrower shall prepay an amount equal to the
lesser of the amount of the LIBOR Advance to which such
Interest Period relates and the unpaid portion of the
Overadvance Amount; and
(3) on thirtieth (30th) day after the Applicable Date,
Borrower shall prepay the remaining portion of the Overadvance
Amount.
(iii) Failure by Borrower to have complied with the
foregoing in a timely manner shall constitute an Event of Default
without further notice or grace period hereunder. No further
Advances, or release of all or any portion of any Eligible Project,
shall be permitted so long as such excess borrowing condition shall
continue to exist. Nothing in this Section 2.7(e) shall excuse
Borrower's
25
compliance with all terms, conditions, covenants and other
obligations imposed upon it under the Loan Documents during the
period of such excess borrowing, nor in any manner condition or
impair Agent's or Lenders' rights thereunder in respect of any such
breach thereof.
(f) General Provisions as to Payments. Borrower shall make
each payment of principal of, and interest on, the Loan or fees
payable hereunder, not later than 11:00 A.M. (Pacific Standard Time
or Pacific Daylight Time, as the case may be) on the date when due,
without offset, deduction or counterclaim, in Federal or other funds
immediately available, at Agent's Lending Office. Whenever any
payment of principal of, or interest on, the Loan or fees (if any)
shall be due on a day which is not a Business Day, the date for
payment thereof shall be extended to the next succeeding Business
Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon shall be payable for
such extended time.
(g) Application of Recoveries. Except to the extent otherwise
provided in Section 8.13 hereof, all payments made and actually
received by the Agent in respect of the Loan (from any person or
source including, without limitation, proceeds of title insurance
policies with respect to any Eligible Project) shall be applied in
the following order of priority:
(i) to the reimbursement of any reasonable costs
incurred by the Agent to administer, enforce, collect or deal with
the Loan (including payments made pursuant to Section 8.11 or Section
8.12 hereof) (or to reimbursement of the Lenders to the extent such
costs have been paid by the Lenders) (based on Pro Rata Shares
thereof);
(ii) to the repayment of any Protective Advances (to
the extent not paid pursuant to clause (i) above) (based on Pro Rata
Shares thereof);
(iii) to the payment of all interest (including default
interest) due and payable on the Notes (based on Pro Rata Shares
thereof);
(iv) to the payment of fees payable under the Loan
Documents (based on Pro Rata Shares thereof); and
(v) to the payment of principal of the Notes (based
on Pro Rata Shares thereof).
Agent shall wire transfer to each Lender, at such Lender's bank
account as designated by such Lender to Agent in writing, its Pro
Rata Share of any payments (to the extent payable to Lender pursuant
to this Section 2.7(g)) within one (1) Business Day of Agent's
receipt of such payment. Agent shall pay to the Lenders interest
thereon, at the Federal Funds Rate, from the Business Day following
receipt of such funds by Agent until such funds are paid in
immediately available funds to the Lender. The Agent shall in any
event not be bound to inquire into or determine the validity, scope
or priority of any interest or entitlement of any Lender and may
suspend all payments and seek appropriate relief (including, without
limitation, instructions from the Majority Lenders or all Lenders,
as applicable, or an action in the nature of interpleader) in the
event of any doubt or dispute as to any apportionment or distribution
contemplated hereby. In the absence of gross negligence or willful
misconduct, the Agent shall not be liable for any apportionment or
distribution of payments made by it in good faith pursuant to this
Section, and if any such apportionment or distribution is
subsequently determined to have been made in error, the sole recourse
of any person to whom payment was 26
due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are
determined to have been entitled.
(h) Excess Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) on account of its interest in the Loan in
excess of its Pro Rata Share in the Loan, then such Lender shall
forward such excess payment to Agent and Agent shall distribute such
excess payment to each Lender Pro Rata Shares thereof; provided,
however, that if all or any portion of such excess payment is
thereafter recovered by the Borrower or other party entitled thereto
through legal action or otherwise, each Lender shall reimburse the
party returning such excess payment in an amount equal to such
Lender's Pro Rata Share of the excess payment.
SECTION 2.8 Fees.
(a) Unused Fee. Borrower agrees to pay to the Agent, for the
benefit of the Lenders an Unused Facility Fee for each calendar
quarter, or portion thereof, during which any of the Commitments are
in effect, during the period commencing on the date hereof and
continuing to but not including the Term Loan Conversion Date (in the
event the Loan is converted into the Term Loan) or the Termination
Date (in the event the Loan is not converted into the Term Loan),
equal to the average daily unused portion of the Commitments during
such quarter times one-eighth percent (_%) per annum; provided,
however, that if the average daily unused portion of the Commitments
is greater than fifty percent (50%) of the Commitment, during any
quarter (or portion thereof for which such fee is computed), such
Unused Facility Fee shall be equal to the sum of (i) fifty percent
(50%) of the Commitments times one-eighth percent (1/8%) per annum,
plus (ii) the amount by which the average daily unused portion of the
Commitments exceeds fifty percent (50%) of the Commitments, times
one-quarter percent (1/4%) per annum. Such Unused Facility Fee on the
unused portion of the Commitments shall be payable quarterly in
arrears on the first day of each December, March, June and September,
commencing on December 1, 1996, and continuing regularly thereafter
so long as the Commitment is in effect, and shall also be payable on
the Term Loan Conversion Date or the Termination Date, as applicable.
By way of illustration, the Unused Facility Fee for the calendar
quarter ending on September 30 shall be due and payable on December
1. Borrower acknowledges that the Unused Facility Fees payable
hereunder are bona fide commitment fees and are intended as
reasonable compensation to Lenders for committing to make funds
available to Borrower as described herein and for no other purposes.
For purposes of this Section 2.8(a), the unused portion of the
Commitments shall mean the amount by which the aggregate amount of
the Commitments exceeds the sum of (x) the aggregate principal amount
of the outstanding Advances plus (y) the aggregate face amount of the
outstanding Letters of Credit.
(b) Extension Fee. If, pursuant to Section 2.11, Lenders
grant an extension of the Termination Date, Borrower agrees to pay
to Agent, for the benefit of the Lenders, an extension fee equal to
fifteen one-hundredths percent (0.15%) of the aggregate amount of the
Commitments at such time. Such fee shall be payable on the date on
which Lenders grant such extension.
(c) Term Loan Conversion Fee. If, pursuant to Section 2.12,
the outstanding balance of the Loan is converted into the Term Loan,
Borrower agrees to pay to Agent, for the benefit of the Lenders, an
annual conversion fee, payable on each of the first anniversary and
the second anniversary of the Term Loan Conversion Date, equal to
fifteen one-hundredths percent (0.15%) of the principal balance of
the Term Loan outstanding on each such date (taking into account any
principal payment made on such dates).
27
(d) Other Fees. Borrower shall pay Agent such fees as are
provided for in the fee agreement between Agent and Borrower, as set
forth in that certain letter dated September 26, 1996 from Agent to
Borrower.
(e) Letter of Credit Fees. As additional consideration for
the issuance of any Letters of Credit pursuant to Section 2.2 hereof,
Borrower agrees to pay to the Agent, for the account of the Lenders
in accordance with their respective Pro Rata Shares, a letter of
credit fee, in addition to the processing, administrative and similar
fees normally charged by and payable to the Issuing Bank in
connection with the issuance of Letters of Credit and any other sums
due pursuant to Article 3 hereof, equal to one and one-half percent
(11/2%) per annum of the average daily aggregate undrawn amount of the
Letters of Credit, payable quarterly on the last day of each fiscal
quarter of Borrower and on the Termination Date.
SECTION 2.9 Computation of Interest and Fees. Fees and
interest on the Loan and the Letters of Credit shall be computed on
the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
SECTION 2.10 Option to Replace Lenders. If any Lender,
other than Agent, shall:
(a) become a Defaulting Lender;
(b) has either (i) declined to approve as Eligible
Projects three or more Projects which the Agent and each of the
remaining Lenders have approved as Eligible Projects or (ii)
approved three or more Projects as Eligible Project on the
condition that the Approved Percentage for each such Project is
at least fifteen percent (15%) below the average Approved
Percentage approved by the each of the remaining Lenders for
such Project;
(c) become subject to the provisions of Section 2.6(b);
(d) make any demand for payment or reimbursement
pursuant to Section 2.6(c) or Section 9.7 hereof; or
(e) has declined to approve an Extension Request and
each of the remaining Lenders have approved such Extension
Request.
then, in any of the foregoing cases, provided that (x) there does not
then exist any Default or Event of Default and (y) in the case of the
circumstances described in clauses (c) and (d), the circumstances
resulting in such demand for payment or reimbursement under Section
2.6(c) or Section 9.7 or the applicability of Section 2.6(b) are not
applicable to all Lenders, the Borrower may either (i) designate
another financial institution (such financial institution being
herein called a "Replacement Lender") acceptable to the Agent (which
acceptance will not be unreasonably withheld) and which is not an
Affiliate of the Borrower, to assume such Lender's Commitment
hereunder and to purchase the Loan of such Lender and such Lender's
rights under this Agreement and the Note held by such Lender, all
without recourse to or representation or warranty (except as to title
of such Lender's portion of the Loan and as to the authority of such
Lender to transfer the same) by, or expense to, such Lender, for a
purchase price equal to the outstanding principal amount of the Loan
payable to such Lender plus any accrued but unpaid interest on such
Loan and accrued but unpaid fees owing to such Lender plus any
29
amounts payable to such Lender under Section 2.6(c) or Section 9.7,
if any, hereof, and upon such assumption, purchase and substitution,
and subject to the execution and delivery to the Agent by the
Replacement Lender of documentation reasonably satisfactory to the
Agent (pursuant to which such Replacement Lender shall assume the
obligations of such original Lender under this Agreement), the
Replacement Lender shall succeed to the rights and obligations of
such Lender hereunder or (ii) pay to the Agent, as cash collateral,
an amount equal to such Lender's Pro Rata Share of the outstanding
Letters of Credit and pay to such Lender the outstanding principal
amount of the Advances payable to such Lender plus any accrued but
unpaid interest on such Advances and accrued but unpaid fees owing
to such Lender plus any amounts payable to such Lender under Section
2.6(c) or Section 9.7 hereof. In the event that the Borrower
exercises its rights under the preceding sentence, the Lender against
which such rights were exercised shall no longer be a party hereto
or have any rights or obligations hereunder. The remedies of
Borrower under this Section 2.10 shall be cumulative of any other
remedies Borrower may have against a Defaulting Lender under this
Agreement or at law or in equity.
SECTION 2.11 Extension of Termination Date. Borrower
may request Agent and Lenders to extend the current Termination Date
by successive one-year intervals by executing and delivering to Agent
at least ninety (90) days but no more than one hundred twenty (120)
days prior to the date which is one (1) year prior to the current
Termination Date, a written request in the form of Exhibit I (an
"Extension Request"). Agent shall forward to each Lender a copy of
each Extension Request delivered to Agent promptly upon receipt
thereof. Borrower understands that this Section 2.11 has been
included in this Agreement for Borrower's convenience in requesting
an extension and acknowledges that none of Lenders nor Agent has
promised (either expressly or impliedly), nor has any obligation or
commitment whatsoever, to extend the Termination Date at any time.
If all Lenders shall have notified Agent on or prior to the date
which is forty-five (45) days prior to the date which is one (1) year
prior to the current Termination Date that they accept such Extension
Request, the Termination Date shall be extended for one (1) year.
If one and only one Lender shall not have notified Agent on or prior
to the date which is forty-five (45) days prior to the date one year
prior to the Termination Date that it accepts such Extension Request,
the Termination Date shall not be extended unless Borrower proceeds
pursuant to Section 2.10, in which event the Termination Date shall
be extended as to all Lenders which have accepted such Extension
Request. If two or more Lenders shall not have notified Agent on or
prior to the date which is forty-five (45) days prior to the date one
year prior to the Termination Date that they accept such Extension
Request, the Termination Date shall not be extended. Agent shall
promptly notify Borrower whether the Extension Request has been
accepted or rejected.
SECTION 2.12 Term Loan Conversion. Subject to the terms
and conditions of this Agreement, if any Extension Request of
Borrower shall be denied, Borrower may then elect to convert the
aggregate principal amount of the Loan then outstanding into a term
loan owing to Lenders (the "Term Loan") provided (a) Borrower has
given Agent notice of Borrower's intention to so convert the Loan not
less than thirty (30) days following receipt by Borrower of notice
from Agent that Borrower's Extension Request has been rejected, and
(b) the conditions set forth in Section 4.4 have been satisfied as
of the date one year prior to the current Termination Date. Any such
conversion shall become effective on the date which is one (1) year
prior to the Termination Date (the "Term Loan Conversion Date").
Upon the effectiveness of the conversion of the outstanding principal
balance of Loan into the Term Loan as contemplated by this Section,
Borrower shall have no right to request or borrow, and no Lender
shall have any obligation to make, any Advance. If the Loan is not
converted to the Term Loan, the Loan shall be due and payable in full
on the Termination Date. 29
ARTICLE 3.
BORROWING BASE; ELIGIBLE PROJECTS
SECTION 3.1 Borrowing Base.
(a) Admission of Projects into the Borrowing Base.
(i) As of the date hereof, the Lenders have admitted into
the Borrowing Base as Eligible Projects the Projects listed on
Schedule 3.1 attached hereto, with the amount of the Borrowing
Base attributable thereto as is set forth in respect of each
such Project on Schedule 3.1.
(ii) If Borrower desires that Lenders admit a Project
into the Borrowing Base, Borrower shall notify Agent thereof in
writing. No Project will be evaluated by Lenders for potential
inclusion into the Borrowing Base unless it is a domestic
operating regional retail shopping mall or retail strip
shopping center, and unless and until Borrower delivers to
Agent and each Lender the following, in form and substance
acceptable to Agent:
(A) A current operating statement for such Project
audited or certified by Borrower as being true and
correct in all material respects and prepared in
accordance with GAAP and a comparative sales report for
the current period and for the previous two (2) fiscal
years or, if such Project has been in operation only for
a lesser period, such lesser period; and
(B) A current rent roll for such Project,
certified by Borrower as being true and correct in all
material respects and a operating and occupancy history
of such Project for the previous three (3) fiscal years
or, if such Project has been in operation only for a
lesser period, such lesser period, in form satisfactory
to Agent, and certified by Borrower and the management
agent of such Project to be true and correct.
(iii) Within ten (10) days after the Agent and the Lenders
have received the foregoing documents and information, each
Lender shall notify the Agent whether or not such Lender is
willing to consider such Project and the Agent shall notify the
Borrower as to whether the Agent and the Lenders are prepared
to consider such Project for inclusion in the Borrowing Base;
provided, however, that failure to give such notice within such
period shall not constitute approval to consider such Project
as an Eligible Project. If the Lenders agree to so consider
such Project, Agent will promptly notify Borrower and obtain an
Appraisal of such Project in order to determine the Appraised
Value thereof. Upon request of Borrower, Agent shall notify
Borrower of the reasons, to the Agent's knowledge, for any
Lender's rejection of a Project as an Eligible Project. No
Project will be further evaluated by Lenders for potential
inclusion into the Borrowing Base unless and until Borrower
delivers to the Agent and each Lender the following, in form
and substance acceptable to Agent and/or the Majority Lenders:
(A) A copy of the most recent ALTA Owner's Policy
of Title Insurance covering such Project showing the
identity of the fee titleholder thereto and all matters
of record;
(B) Copies of all documents of record reflected in
Schedule B of the Owner's Policy of Title Insurance and
a copy of the most recent real estate tax xxxx and notice
of assessment;
30
(C) A survey of such Project certified by a
surveyor licensed in the applicable jurisdiction to have
been prepared in accordance with the then effective
Minimum Standard Detail Requirements for ALTA/ACSM Land
Title Surveys;
(D) A "Phase I" environmental assessment of such
Project not more than twelve (12) months old;
(E) A certificate from a licensed engineer or
other professional satisfactory to Agent that such
Project is not located in a Special Flood Hazard Area as
defined by the Federal Insurance Administration;
(F) Copies of (I) all Major Leases, (II) all Major
Agreements, (III) the form or forms of tenant lease used
at such Project, and (IV) all material maintenance or
service agreements affecting such Project;
(G) In the case of a Project which was owned by
Borrower or any Wholly Owned Subsidiary of Borrower or
Subpartnership on the Effective Date, a summary, prepared
by a Senior Officer or appropriate vice president of the
CBL Properties, Inc., of any engineering, mechanical,
structural or maintenance studies performed with respect
to such Project or, in the case of any other Project,
copies of any engineering, mechanical, structural or
maintenance studies performed (if not previously
performed, such studies shall be required by Agent on
behalf of Lenders) with respect to such Project;
(H) Evidence that such Project complies with
applicable zoning and land use laws;
(I) A schedule of all personal property, including
intangible personal property owned by Borrower or any
Wholly Owned Subsidiary of Borrower or Subpartnership and
used in connection with the maintenance or operation of
such Project; and
(J) Such other information reasonably requested by
Agent in order to evaluate the Project for potential
inclusion in the Borrowing Base.
(iv) Within thirty (30) days after the delivery to the
Lenders of all information and other documents required hereby
or requested by the Agent relating to the Project proposed by
Borrower as an Eligible Project (including, but not limited to,
an Appraisal in respect of such Project), each Lender shall
notify the Agent whether such Lender approves such Project as
an Eligible Project and the Agent shall provide Borrower with
written notice of whether the Supermajority Lenders have
approved a Project as an Eligible Project and, if so approved,
the Approved Percentage applicable to such Project; provided,
however, that failure to give such notice within such period
shall not constitute approval of such Project as an Eligible
Project; provided, further, that is such Project is not
approved as an Eligible Project, the Agent shall, upon the
request of Borrower, notify Borrower as to Agent's
understanding of why such Project was not approved as an
Eligible Project;
(v) Upon acceptance by Supermajority Lenders and
execution and delivery of documents and completion of all other
closing requirements imposed by Agent, which shall include the
Collateral Documents and other items described in Section 4.3
and such other items or documents as may be
31
appropriate under the circumstances, including updates of the
documents described in Section 3.1(a)(ii) and Section
3.1(a)(iii)(C),(D) (if then more than twelve (12) months old),
(F) and (I), such Project shall become an Eligible Project
admitted into the Borrowing Base.
(vi) The Lenders may, in their sole discretion, notify
Borrower that a Project that is not otherwise an Eligible
Property, may be included in the Borrowing Base, provided that
Agent or the Lenders may require additional terms and
conditions (including a lower Approved Percentage or a
different method of calculating the Permanent Loan Estimate) to
be evidenced in writing as a supplement to this Agreement in
order for such Project to be an Eligible Project and to be
admitted into the Borrowing Base.
(vii) If the Appraised Value of a Project is adjusted
from that set forth in the Appraisal relating to such Project
as a result of Agent's internal review, Agent shall advise the
Borrower and, upon request of Borrower, provide a reasonably
detailed report describing the nature and amount of such
adjustments; provided, however, that failure to provide such a
report shall not affect the Appraised Value of a Project;
(viii) Pursuant to Section 9.3 hereof, Borrower shall pay
to Agent all reasonable third-party out-of-pocket expenses
(which shall be deemed to include, if outside counsel is not
used by the Agent, the allocated cost of in-house counsel of
Agent) of Agent incurred in connection with Agent's review of
requests for a Project to be admitted into the Borrowing Base.
(ix) If it shall be unlawful for Agent to require
Borrower to pay any taxes with respect to a Project or the
Collateral Documents covering a Project, then the Agent may, in
its sole discretion, refuse to submit such Project to the
Lenders for consideration whether such Project shall be an
Eligible Project and be admitted into the Borrowing Base, or,
if such Project has been admitted into the Borrowing Base, then
the Agent or the Lenders may, in its or their sole discretion,
elect to remove such Project from the Borrowing Base.
(b) Borrowing Base. The Borrowing Base for the Projects shall
be, as of any date, equal to (i) the lesser of (A) the sum of the
Approved Percentage of the Appraised Value of each of the Eligible
Projects or (B) the aggregate Permanent Loan Estimates for the
Eligible Projects less (ii) reserves established pursuant to Section
7.5 hereof. In all events, the Borrowing Base is subject to
reduction in the manner set forth in this Agreement including,
without limitation, Section 6.3 and Section 7.4 hereof.
(c) Computation of Net Operating Income. Borrower shall
deliver to Agent quarterly computations of Net Operating Income for
each Eligible Project with the Borrowing Base information required
pursuant to Section 0 herein. Agent shall notify Borrower in writing
of any additional adjustments to Net Operating Income required by
Agent and corresponding adjustments to the Borrowing Base (if any).
(d) Release of Eligible Projects. Upon repayment and
satisfaction in full of all Obligations and the termination of all
Commitments and this Agreement, Agent will release the Collateral
Documents with respect to each of the Eligible Projects. From time
to time Borrower may request, upon not less than thirty (30) days
prior written notice, that an Eligible Project or portion thereof be
released from the Liens created by the Collateral Documents
applicable thereto, which release ("Property Release") shall be
delivered by Agent if all of the following conditions are satisfied
as of the date of such Property Release:
32
(i) after giving effect to such Property Release, any of
Post Oak Mall, Georgia Square Mall or any regional mall which
may be included in the Borrowing Base and is determined by the
Majority Lenders to be of equivalent financial strength to any
of the foregoing malls, will remain as an Eligible Project in
the Borrowing Base;
(ii) no Default or Event of Default has occurred and is
then continuing or will occur after giving effect to such
Property Release and the reduction in the Borrowing Base by
reason of the release of all or a portion of such Eligible
Project;
(iii) the Termination Date has not occurred by reason
of the events described in clauses (b) or (c) of the definition
thereof;
(iv) Borrower shall have delivered to Agent a Borrowing
Base Certificate reflecting the Borrowing Base after giving
effect to such Property Release;
(v) Borrower shall have delivered to Agent all documents
and instruments reasonably requested by Agent including,
without limitation, the following:
(A) a survey of the portion of the Eligible
Project to be released;
(B) the quitclaim deed or other instrument to be
used to effect such release; and
(C) an endorsement to the mortgagee title
insurance policy in effect with respect to the
affected Eligible Project.
(vi) Agent shall have determined that the outstanding
principal balance of the Loans will not exceed the Borrowing
Base after giving effect to such Property Release and any
prepayment to be and/or the acceptance of any prepayment to be
made and/or the acceptance of any Project as an additional or
replacement Eligible Project in the Borrowing Base to be given
concurrently with such Property Release; and
(vii) with respect to a Property Release relating to
a portion of an Eligible Project, (A) the value of such
Property is $1,000,000.00 or less and (ii) after giving effect
to the proposed Property Release, the aggregate value of all
Property Releases made in respect of such Eligible Property is
$5,000,000.00 or less.
If following any such Property Release, the Wholly-Owned Subsidiary
or Subpartnership owning the Project so released does not have any
ownership interest in any of the remaining Collateral, the Agent and
the Lenders shall, at Borrower's request, release such Wholly-Owned
Subsidiary or Subpartnership from any guaranty of the Obligations
executed by it.
SECTION 3.2 Leases and Major Agreements.
(a) Borrower shall, or shall cause any Wholly Owned
Subsidiary of Borrower or Subpartnership Owning the applicable
Eligible Project to, (i) submit any and all proposed Major Agreements
and Major Leases to Agent for approval prior to the execution
thereof, which approval shall not be unreasonably withheld; (ii) duly
and punctually perform and comply with any and all material
representations,
33
warranties, covenants and agreements expressed as binding upon
Borrower under any Major Agreement or Major Lease; (iii) proceed in
a commercially reasonable manner to maintain each of the Major
Agreements and Major Leases in full force and effect during the term
thereof; (iv) appear in and defend any action or proceeding in any
manner connected with any of the Major Agreements and Major Leases;
(v) deliver to Agent execution counterparts of all Major Agreements
and Leases; (vi) act in a commercially reasonable manner in entering
into, performing and enforcing the Major Agreements and the Leases;
and (vii) deliver to Agent such further information, and execute and
deliver to Agent such further assurances and assignments, with
respect to the Major Agreements and Leases as Agent may from time to
time reasonably request. Without Agent's prior written consent,
Borrower shall not (A) do or knowingly permit to be done anything to
materially impair the value of any of the Major Agreements or Major
Leases; (B) except for deposits not to exceed one month's rent for
any one lessee, collect any of the Rent more than one (1) month in
advance of the time when the same becomes due; (C) discount any
future accruing Rent; (D) amend or modify any of the financial or
other economic terms of any Major Agreement or Major Lease; (E)
terminate any Major Agreement or Major Lease other than as a result
of a material default thereunder; or (F) assign or grant a security
interest in or to any of the Major Agreements or Leases.
(b) Borrower shall not, and shall not permit any
Subsidiary or Subpartnership owning an Eligible Project to, amend,
modify in any material manner, or terminate its management agreement
with CBL Management, Inc. except upon thirty (30) days prior written
notice to Agent. If such proposed amendment or modification limits
or extinguishes Borrower's absolute right to terminate the management
agreement upon thirty (30) days notice or Agent notifies Borrower
that, in Agent's judgment, such proposed amendment, modification or
termination, as applicable, will either (i) increase the management
fees, reimbursements or other payments to manager to levels which are
in excess of applicable market levels or (ii) have a material adverse
effect upon Borrower or any Affiliate or Subsidiary of Borrower or
its ability to perform its obligations under the Collateral
Documents, then Borrower shall not enter into such amendment,
modification or termination without the consent of Majority Lenders;
provided however, that any such termination which is required by
Applicable Law in order for CBL Properties, Inc. to maintain its
status as a real estate investment trust shall not require such
consent. Borrower shall not enter into a management agreement with
a manager other than CBL Management, Inc., or another affiliate or
subsidiary of Borrower, in respect of any Eligible Project without
the prior written consent of Majority Lenders.
(c) Within sixty (60) days after the execution of each
Major Lease, Borrower agrees to deliver or to cause to be delivered
to Agent a fully executed and acknowledged non-disturbance,
attornment, estoppel and subordination agreement from the tenant
under such Major Lease. With respect to all Leases, Borrower agrees
to exercise diligent efforts to deliver to Agent fully executed
estoppel certificates from each tenant at such times as Agent may
reasonably request, and Agent agrees to execute attornment agreements
with each such tenant who requests such an agreement; provided,
however, that such tenant is not in default of any of its obligations
under its Lease. At Agent's request, Borrower shall also exercise
diligent efforts to deliver fully executed estoppel certificates
executed by the parties to the Major Agreements. All agreements
required under the terms of this Section 3.2(c) shall be in form and
substance satisfactory to Agent in its sole but reasonable
discretion.
SECTION 3.3 Appraisals. (a) Prior to classifying any
Project as an Eligible Project, the Agent will cause, at Borrower's
expense, an Appraisal to be
34
made of such Project for use in determining the Appraised Value
thereof. From time to time an Eligible Project may be reappraised,
at Borrower's option and expense, upon notice by Borrower to Agent
of its exercise of its option to reappraise a Project, in which event
Agent shall cause such Appraisal or Appraisals to be made. Agent
shall disclose the results of such Appraisal to Borrower after
acceptance of such Appraisal by Agent.
(b) In addition, no later than June 28, 1998, upon five
(5) Business Days prior written notice to Borrower, Agent shall, at
Borrower's expense, cause an Appraisal of all of the Eligible
Projects to be performed, to redetermine the Appraised Value thereof.
(c) In addition, at any time and from time to time (but
no more often than once per year as to each Eligible Project), upon
five (5) Business Days prior written notice to Borrower, Agent may,
at Lenders' expense, cause an Appraisal of any or all Eligible
Projects to be prepared, to redetermine the Appraised Value thereof.
(d) In addition, at any time and from time to time, upon
five (5) Business Days prior written notice to Borrower, Agent may,
at Borrower's expense, redetermine the Appraised Value of any
Eligible Project if (i) in Agent's reasonable judgment a material
adverse change has occurred with respect to such Eligible Project,
including without limitation, an anchor or tenant under a Major Lease
in an Eligible Project closes or vacates its premises and no
commercially reasonably replacement is obtained, or a (ii) major
casualty or condemnation has occurred with respect to such Eligible
Project, or (iii) reasonably necessary or advisable in order to
comply with Legal Requirements applicable to Agent or any Lender.
SECTION 3.4 Major Construction. If Borrower or any Wholly
owned Subsidiary or Subpartnership intends to engage in any
construction, remodeling or demolition project or series of related
projects, with respect to an Eligible Project (each, a "Construction
Project"), the aggregate cost of which will exceed $1,000,000.00,
Borrower shall first notify Agent, provided that (i) if any
Construction Project (whether or not carried on simultaneously or in
conjunction with other Construction Projects) consists of
construction of improvements which would materially adversely affect
the value of such Eligible Project or (ii) the aggregate cost of such
Construction Project (other than for tenant improvements) will exceed
$5,000,000.00 (a "Major Construction Project"), such Major
Construction Project shall be subject to approval of the Majority
Lenders, which approval shall not be unreasonably withheld.
ARTICLE 4.
CONDITIONS
SECTION 4.1 Effectiveness. This Agreement shall become
effective on September 26, 1996, provided that on or before said date
all of the following conditions shall have been satisfied (the
"Effective Date"):
(a) receipt by Agent of counterparts of this Agreement signed
by each of the parties hereto;
(b) receipt by Lenders of the duly executed Notes on or before
the Effective Date, complying with the provisions of Section 2.4
hereof;
35
(c) receipt by Agent of the opinions of Shumacker & Xxxxxxxx,
P.C. and such other counsel located in the jurisdictions where the
Eligible Projects are located, addressed to Agent and each Lender and
satisfactory in form and substance to Agent covering the legal
matters addressed in Article 0 hereof and such additional matters
relating to the transactions contemplated hereby as Agent may
reasonably request;
(d) receipt by Agent of a certificate of Borrower approving
the execution, delivery and performance of this Agreement (when
executed and delivered pursuant to this Agreement) and the
transactions contemplated therein, duly adopted by Borrower in
accordance with the terms of Borrower's Partnership Agreement;
(e) receipt by Agent of (i) certificates of existence and good
standing for Borrower issued by the State of Delaware and
certificates of qualification and good standing for Borrower issued
by each of the states wherein any Eligible Project is located and
such qualification is required, and (ii) certificates of existence
and good standing for each Subpartnership which is a party to any
Collateral Document issued by the state of each such Subpartnership's
formation and the state in which the Eligible Project owned by such
Subpartnership is located;
(f) receipt by Agent of a certificate of an officer of
Borrower, certifying that there have been no amendments to Borrower's
certificate of partnership, partnership agreement or other
organizational documents since July 28, 1994, other than such
amendments as may be attached to such certificate and certified as
being true, correct and complete as of the date of such
certification (with any amendment to Borrower's certificate
of partnership being certified by the Secretary of State of
the State of Delaware);
(g) a certificate of the Secretary of CBL Properties, Inc.
dated as of the Effective Date certifying (A) that there have been
no amendment to the By-laws of CBL Properties, Inc., since July
28, 1994, other than such amendments as may be attached to such
certificate and certified as being true, correct and complete as
of such certification; (B) that attached thereto is a true and
complete copy of Resolutions adopted by the Board of Directors of
CBL Properties, Inc., authorizing the execution and delivery on
behalf of Borrower of this Agreement and any other documents
executed in connection herewith to which Borrower is a party,
authorizing the execution and delivery on behalf of Borrower as
general partner of each Subpartnership of each of the documents
executed in connection herewith to which such Subpartnership is a
party, and authorizing the execution, delivery and performance of
each of the documents executed in connection herewith to which CBL
Properties, Inc. is a party; and (C) as to the incumbency and
genuineness of the signatures of the officers of CBL Properties,
Inc. executing any of the documents executed in connection
herewith to which CBL Properties, Inc., Borrower or any
Subpartnership is a party;
(h) a certificate of the Secretary of CBL Properties, Inc.,
certifying that (i) there have been no amendments to the
Certificate of Incorporation of CBL
36
Properties, Inc. since July 28, 1994, other than such amendments
as may be attached to such certificate and certified by the
Secretary of State of Delaware as of a date not earlier than
fifteen (15) days prior to the Effective Date, and (ii) there have
been no amendments to the certificates of partnership, partnership
agreements or other organizational documents of any Subpartnership
which is a party to any Collateral Document since July 28, 1994,
other than such amendments as may be attached to such certificate
and certified as being true, correct and complete as of the date
of such certification;
(i) good standing certificates for CBL Properties, Inc.,
each dated as of a date close to the Effective Date, issued by the
Secretaries of State of Delaware and of each state wherein CBL
Properties, Inc. is qualified to do business and where such
qualification is required;
(j) since June 30, 1996, there shall not have occurred any
material adverse change in the business, operations (including the
operation performance of any Eligible Project), condition
(financial or otherwise), assets, liabilities, properties or
prospects of Borrower, or any event, condition, or state of facts
which would be expected materially and adversely to affect the
prospects of Borrower subsequent to consummation of the
transactions contemplated by this Agreement, in each case, as
determined by Agent in its reasonable discretion;
(k) since June 30, 1996, there shall not have occurred any
material adverse change in the business, operations, condition
(financial or otherwise), assets, liabilities, properties or
prospects of any Eligible Project included or to be included in
the Borrowing Base, or any event, condition, or state of facts
which would be expected materially and adversely to affect the
prospects of any such Project subsequent to consummation of the
transactions contemplated by this Agreement, in each case, as
determined by Agent in its reasonable discretion;
(l) there shall exist no Default or Event of Default; and
(m) all of the representations and warranties made by
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership hereunder, under any of the Notes or under any of
the Collateral Documents shall be true and correct in all material
respects as of the Effective Date with the same force and effect
as if made on and as of such date.
This Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied
on or before September 26, 1996.
SECTION 4.2 Advances. The obligation of Agent and each
Lender to make any Advance or to have any Letter of Credit issued
is subject to the satisfaction of the following conditions:
(a) receipt by Agent of a Notice of Borrowing as required
by Section 0, in the case of an Advance, or a request for a Letter
of Credit as required by Section 0, in the case of a Letter of
Credit, and a compliance certificate as described in Section 0
hereof;
(b) the fact that the proposed use of proceeds of such
Advance set forth in the Notice of Borrowing or the proposed use
of such Letter of Credit set forth in such request for Letter of
Credit is consistent with the provisions of Section 6.1 and
Section 2.2, respectively;
37
(c) (i) in the case of the issuance of a Letter of Credit,
there shall exist no Default or Event of Default nor any event or
condition which, with the issuance of such Letter of Credit, would
constitute a Default or Event of Default or (ii) in the case of
the making of an Advance, there shall exist no (A) Event of
Default, (B) Default under Sections 0, 0 or 0 hereof, or (C) other
Default as to which Agent has given Borrower notice nor any event
or condition which, with the making of such Advance, would
constitute an Event of Default or any such Default;
(d) all of the representations and warranties made by
Borrower, any Wholly Owned Subsidiary of Borrower or any
Subpartnership hereunder, under any of the Notes or under any of
the Collateral Documents shall be true and correct in all material
respects as of the date of such Advance or the date of such Letter
of Credit with the same force and effect as if made on and as of
such date, except to the extent such representations or warranties
specifically relate to an earlier date and except for changes
therein occurring in the ordinary course of business which do not
otherwise constitute a Default or Event of Default hereunder;
(e) all of the Collateral Documents for each Eligible
Project comprising the Borrowing Base shall be in full force and
effect and shall constitute a first priority perfected Lien on and
security interest in each such Project, subject only to Permitted
Liens.
Acceptance by Borrower of an Advance hereunder or the issuance of
a Letter of Credit shall be deemed to be a representation and
warranty by Borrower on the date of such Advance or such Letter of
Credit as to the facts specified in clauses (b), (c), (d) and (e)
of this Section 0.
SECTION 4.3 Conditions Precedent to a Project Becoming An
Eligible Project. No Project shall become an Eligible Project
until Borrower shall have granted, or shall have caused any Wholly
Owned Subsidiary or Subpartnership owning such Project to grant,
to Agent, for the benefit of Lenders, as security for the payment
and performance of the Obligations of Borrower, a valid,
enforceable, perfected, first priority and (except for Permitted
Liens) only security interest and Lien in and to such Project and
all real and personal property relating thereto and, in connection
therewith, Borrower shall have executed and delivered, or shall
have caused any Wholly-Owned Subsidiary or Subpartnership owning
such Project to execute and deliver, to Agent, in form and
substance reasonably satisfactory to Agent, the following
instruments, documents and agreements in respect of such Project:
(a) a Mortgage encumbering such Project in favor of the
Agent for the benefit of Lenders, such Mortgage to be
substantially in the form of Exhibit D attached hereto and
incorporated herein by reference, modified as appropriate to
conform to the laws of the jurisdiction in which the Project is
situate;
(b) an environmental indemnity agreement, substantially in
the form of Exhibit E attached hereto and incorporated herein by
reference;
(c) a closing certificate and affidavit, in substantially
the form of Exhibit F attached hereto and incorporated herein by
reference;
(d) if requested by the Agent or the Majority Lenders,
collateral assignments of operating agreements, reciprocal
easement agreements, management agreements and other agreements
requested by the Agent or the Majority Lenders, all in form and
substance reasonably satisfactory to the Agent and the Lenders;
38
(e) assurance from a title insurance company satisfactory
to the Agent (the "Title Company") that such Title Company is
committed to cause the Mortgage to be recorded and, upon recorda-
tion of the Mortgage, to issue its ALTA lender's title insurance
policies in a form reasonably acceptable to the Agent and in an
amount equal to the Borrowing Base to be attributable to the
Eligible Project described therein or such higher amount as may be
reasonably requested by the Agent, showing the Agent as the
"insured mortgagee" and insuring the validity and priority of the
Mortgage as a first priority Lien upon the Eligible Project and
Collateral described therein, subject to Permitted Liens;
(f) receipt by Agent of an opinion of outside counsel
reasonably acceptable to the Agent, addressed to Agent and each
Lender and satisfactory in form and substance to Agent covering
the legal matters addressed in Article 0 hereof and such
additional matters relating to the transactions contemplated
hereby as Agent may reasonably request;
(g) receipt by Agent of a Borrowing Base report certified
by the chief financial officer or the chief accounting officer of
Borrower, setting forth in reasonable detail the calculations
establishing the Borrowing Base;
(h) if such Eligible Project is owned by a Wholly Owned
Subsidiary of Borrower or Subpartnership of Borrower, a guaranty,
substantially in the form of Exhibit G hereto, by such Wholly
Owned Subsidiary or Subpartnerships of the obligations of Borrower
under this Agreement, duly executed and delivered by such Wholly
Owned Subsidiary or Subpartnership;
(i) if such Eligible Project is owned by a Wholly Owned
Subsidiary of Borrower, instruments, documents, certificates and
items in respect of such Wholly Owned Subsidiary as are comparable
to the instruments, documents, certificates and other items
described in subsections (g) through (i) of Section 0 in respect
of CBL Properties, Inc. and/or Borrower;
(j) if such Eligible Project is owned by a Subpartnership,
instruments, documents, certificates and items in respect of such
Subpartnership, as are comparable to the instruments, accounts,
certificates and other items described in subsections (d) through
(i) of Section 0 in respect of Borrower.
(k) receipt by Agent of all documents it may reasonably
request relating to the validity and enforceability of the Loan
Documents and the Collateral Documents (when executed and
delivered pursuant to this Agreement) and any other matters
relevant hereto, all in form and substance satisfactory to Agent;
(l) such other instruments, documents, agreements,
financing statements, certificates, opinions and other Collateral
Documents as the Agent or the Majority Lenders may reasonably
request.
Borrower shall perform, and shall cause the Wholly Owned
Subsidiaries and Subpartnerships to perform, any and all
reasonable steps requested by Agent to perfect, maintain and
protect Agent's Lien in the Projects and the Collateral pledged to
the Agent, including, without limitation, executing and filing
Mortgage Supplements, financing or continuation statements, or
amendments thereof, in form and substance satisfactory to Agent;
and delivering to Agent all documents, notes and other instruments
or chattel paper included in the Collateral, the possession
39
of which is necessary or appropriate to perfect Agent's security
interest therein. Agent may file one or more financing statements
disclosing Agent's Lien under the Collateral Documents without
Borrower's or any such Subsidiary's signature appearing thereon
and Borrower shall pay the costs of, or incidental to, any
recording or filing of any financing statements concerning the
Collateral.
SECTION 4.4 Conditions to Conversion to Term Loan.
The right of Borrower to convert Loan into the Term Loan
under Section 2.12 is subject to the condition precedent that the
following conditions be satisfied in the judgment of Agent:
(a) timely receipt by Agent of the notice required under
such Section;
(b) immediately before and after such conversion, no Event
of Default shall have occurred and be continuing; and
(c) the representations and warranties of Borrower
contained in this Agreement and the other Loan Documents shall be
true in all material respects on and as of the date of such
conversion except to the extent such representations or warranties
specifically relate to an earlier date or such representations or
warranties become untrue by reason of events or conditions
otherwise permitted hereunder and the other Loan Documents.
The delivery of the notice required under such Section shall
constitute a certification by Borrower to Agent and Lenders that
the statements in the immediately preceding clauses (b) and (c)
are true.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants to Agent and each
Lender that:
SECTION 5.1 Organization and Power. Borrower is a limited
partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has all requisite
partnership powers and all material governmental certificates of
authority, licenses, permits, qualifications, documentation,
consents and approvals required to own, lease and operate its
properties and to carry on its business as now conducted. CBL
Properties, Inc. is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and
has all requisite corporate powers and all material governmental
certificates of authority, licenses, permits, qualifications,
documentation, consents and approvals required to own, lease and
operate its properties and to carry on its business as now
conducted. Each of Borrower's Subsidiaries is a limited
partnership or a corporation duly organized, validly existing and
in good standing under the laws of its state of formation, and has
all requisite partnership powers and all material governmental
certificates of authority, licenses, permits, qualifications,
documentation, consents and approvals required to own, lease and
operate its properties and to carry on its business as now
conducted.
SECTION 5.2 Validity of Loan Instruments. The execution,
delivery and performance by Borrower of the Loan Documents and the
execution, delivery and performance by any Wholly Owned Subsidiary
of Borrower or by any Subpartnership of
40
any Collateral Documents to which such Wholly Owned Subsidiary or
Subpartnership is a party, when executed and delivered pursuant to
the Original Credit Agreement and/or this Agreement, (a) are
within Borrower's or such Subsidiary's or Subpartnership's powers,
(b) have been duly authorized by all necessary corporate,
partnership or other action, (c) require no action by or in
respect of, or filing with, any governmental body, agency or
official and (d) do not and will not contravene, or constitute a
default under, any Applicable Law or of the partnership agreement
or other organizational document of Borrower or such Subsidiary or
Subpartnership or of any agreement, judgment, injunction, order,
decree or other instrument binding upon Borrower or such
Subsidiary or Subpartnership or result in the creation or
imposition of any Lien on any asset of Borrower or such Subsidiary
or Subpartnership. The execution and delivery by CBL Properties,
Inc. on behalf of Borrower of the Loan Documents and the
Collateral Documents (when executed and delivered pursuant to the
Original Credit Agreement and/or this Agreement) are within CBL
Properties, Inc.'s corporate powers, have been duly authorized by
all necessary corporate action, require no action by or in respect
of, or filing with, any governmental body, agency or official and
do not and will not contravene, or constitute a default under,
Applicable Law or of the Certificate of Incorporation or by-laws
of CBL Properties, Inc. or of any agreement, judgment, injunction,
order, decree or other instrument binding upon CBL Properties,
Inc. or result in the creation or imposition of any Lien on any
asset of CBL Properties, Inc.
SECTION 5.3 Binding Effect. This Agreement constitutes a
valid and binding agreement of Borrower and the other Loan
Documents (when executed and delivered in accordance with the
Original Credit Agreement and/or this Agreement) do and will
constitute valid and binding obligations of Borrower, enforceable
in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally. All Collateral
Documents, when executed and delivered in accordance with the
Original Credit Agreement and/or this Agreement, do and will
constitute valid and binding obligations of Borrower and/or the
Subsidiary or Subpartnership which is a party thereto enforceable
in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, and other similar laws
affecting the rights of creditors generally.
SECTION 5.4 Financial Information.
(a) The balance sheet of Borrower as of June 30, 1996 and
the related statements of funds from operations, stockholders'
equity and cash flows for the fiscal year then ended, certified by
Borrower's Chief Financial Officer or Controller, and filed with
the Securities and Exchange Commission, copies of which
41
have been delivered to Agent, fairly present, in conformity with
GAAP (as modified by the rules and regulations of the Securities
and Exchange Commission and the New York Stock Exchange), the
financial position of Borrower as of such date and its results of
operations and cash flows for such fiscal year.
(b) Between June 30, 1996 and the Effective Date, there has
been no material adverse change in the business, properties,
financial position, results of operations or prospects of CBL
Properties, Inc., Borrower, the Subpartnerships or any of their
respective Subsidiaries, taken as a whole.
SECTION 5.5 Litigation. Except as set forth in Schedule 0
attached hereto, there are no actions, suits or proceedings of a
material nature pending or threatened in writing against or
affecting Borrower, CBL Properties, Inc., any of their respective
Subsidiaries or the Collateral before any court or arbitrator or
any governmental body, agency or official which (a) could have a
material adverse effect on the business, properties, financial
position, results of operations or prospects of Borrower, CBL
Properties, Inc. and their respective Subsidiaries other than a
material adverse effect which Borrower has fully disclosed to the
Agent unless the Agent notifies Borrower that Agent has determined
that such material adverse effect is likely to result in a future
Default or Event of Default under any covenant set forth in
Section 8 hereof; (b) could have a material adverse effect on any
Eligible Project; or (c) in any manner draw into question the
validity of any Loan Document or Collateral Document or the
priority of any Lien, Mortgage or security interest created hereby
or pursuant to the Collateral Documents; and, subject to the
provisions of Section 0 hereof, to the best knowledge of Borrower,
no event has occurred which will violate, be in conflict with,
result in the breach of or constitute (with due notice or lapse of
time, or both) a default of a material nature under Applicable Law
or result in the creation or imposition of any Lien, charge or
encumbrance of any nature whatsoever on the Collateral.
SECTION 5.6 ERISA. Except as set forth on Schedule 0
hereof, neither Borrower nor any ERISA Affiliate maintains, or
participates in, and has not at any time maintained or
participated in, any ERISA Plan.
SECTION 5.7 Hazardous Substances. Borrower warrants,
represents and agrees as follows:
(a) Borrower has had performed reasonable
investigations, studies and tests as to any environmental
contamination, liabilities or problems with respect to the
Collateral, including without limitation, the storage,
disposal, presence, discharge or release of any Hazardous
Substances at or with respect to the Collateral, copies of
which have been provided to the Agent prior to the date
hereof, and, except as otherwise set forth in the Mortgages,
such investigations, studies, and tests have disclosed no
Hazardous Substances or possible violations of any
Environmental Laws.
(b) No personal or real property owned by Borrower or
any of its Subsidiaries is subject to any private or
governmental Lien, or to the best of Borrower's knowledge
judicial or administrative notice or action relating to
Hazardous Substances or environmental problems, impairments
or liabilities with respect to such property or the direct or
indirect violation of any Environmental Laws, in each case
which could have a material adverse effect on the business,
properties, financial position, results of operations or
prospects of Borrower, CBL Properties, Inc. and their
respective Subsidiaries other than a material adverse effect
which Borrower has fully disclosed to the Agent unless the
Agent notifies Borrower that Agent has determined that
42
such material adverse effect is likely to result in a future
Default or Event of Default under any covenant set forth in
Section 8 hereof;
(c) Except as disclosed in the Mortgages, no Hazardous
Substances are located on or have been stored, processed or
disposed of on or released or discharged from (including
ground water contamination) the Collateral and no above or
underground storage tanks exist on the Collateral. Borrower
shall not allow, and shall not permit its Subsidiaries to
allow, any Hazardous Substances to be stored, located,
discharged, possessed, managed, processed or otherwise
handled on any of their properties or the Collateral other
than small quantities which are utilized in the ordinary
course of business of such properties, and which are used and
disposed of in a lawful manner, and shall comply, and cause
said Subsidiaries to comply, with all Environmental Laws
affecting such properties or the Collateral.
(d) Borrower shall immediately notify Agent should
Borrower become aware of (i) the existence of any Hazardous
Substance in, on or beneath any of its properties or the
properties of its Subsidiaries in violation of any
Environmental Law, or any other violation of any
Environmental Law with respect to such properties, (ii) any
"release" or threatened "release" (as defined in CERCLA and
rules and regulations promulgated thereunder) of any
Hazardous Substances on or from the Collateral or any other
real property owned by Borrower or any of its Subsidiaries,
or (iii) any Lien, action, or notice of the nature described
in subparagraph (b) above, in each case which could have a
material adverse effect on the business, properties,
financial position, results of operations or prospects of
Borrower, CBL Properties, Inc. and their respective
Subsidiaries other than a material adverse effect which
Borrower has fully disclosed to the Agent unless the Agent
notifies Borrower that Agent has determined that such
material adverse effect is likely to result in a future
Default or Event of Default under any covenant set forth in
Section 8 hereof. Upon the occurrence of any such event,
Borrower shall, and shall cause its Subsidiaries, at its or
such Subsidiary's own cost and expense, take all actions as
shall be necessary or advisable for the clean-up of any such
property including all removal, containment and remedial
actions to the extent required by applicable Environmental
Laws, and shall further pay or cause to be paid at no expense
to Agent and other Lenders all clean-up, administrative, and
enforcement costs of applicable government agencies asserted
against such property or the owner thereof. All costs,
including, without limitation, those costs set forth above,
damages, liabilities, losses, claims, expenses (including
reasonable attorneys' fees actually incurred and
disbursements) which are incurred by Agent (except to the
extent resulting from the gross negligence or willful
misconduct of Agent), without requirement of waiting for the
ultimate outcome of any other proceeding, shall be paid by
Borrower to Agent as incurred within ten (10) days after
notice from Agent itemizing the amounts incurred to the date
of such notice.
(e) Upon reasonable prior notice to Borrower, and
subject to the rights of tenants, Agent or its
representatives may from time to time (whether before or
after the commencement of a nonjudicial or judicial
proceeding) enter and inspect Collateral for the purpose of
determining the existence, location, nature and magnitude of
any past or present release or threatened release of any
Hazardous Substance into, onto, beneath or from such
properties. Except in cases of emergency, any such
inspection shall be conducted in a manner which does not
unreasonably interfere with the operation of the Collateral.
All warranties and representations contained in this Section
0 shall be deemed to be continuing and shall remain true and
correct in all material respects until the Indebtedness has been
paid in full and any limitations period expires. Notwithstanding
anything to the contrary contained herein or in any of the other
43
Loan Documents, Borrower's agreements and Borrower's
indemnification of Lenders contained in this Section 0 shall
survive the exercise of any remedy by Agent under any of the
Collateral Documents, including foreclosure (or deed in lieu
thereof), even if, as a part of such foreclosure or deed in lieu
of foreclosure, the Indebtedness is satisfied in full, but only
with respect to liability or costs arising as a result of events
occurring prior to the date upon which Borrower and its
Subsidiaries, are divested of title to the Collateral whether
voluntarily, involuntarily or by operation of law.
SECTION 5.8 Taxes and Other Payments. As of the date
hereof, no United States federal income tax returns of the
"affiliated group" (as defined in the Internal Revenue Code) of
which Borrower is a member have been examined and closed. To the
best of Borrower's knowledge, each member of such affiliated
group, including Borrower, have filed all federal, state, county,
municipal and city income and other tax returns required to have
been filed by it and has paid all taxes which have become due
pursuant to such returns or pursuant to any assessments received
by it, and each member, including Borrower, does not know of any
basis for any material additional assessment in respect of any
such taxes. Borrower has paid or will pay (or has caused to be
paid or will be caused to be paid) in full (except for such
retainages as may be permitted or required by any Legal
Requirement to be withheld pending completion of any improvements)
all sums by Borrower or its Affiliates owing or claimed from
Borrower or such Affiliates for labor, material, supplies,
personal property (whether or not forming a fixture hereunder) and
services of every kind and character used, furnished or installed
in or on the Collateral and no claim for same exists or will be
permitted to be created; provided, however, that Borrower may
contest such amounts in good faith by appropriate proceedings so
long as Borrower provides Agent adequate security therefor.
SECTION 5.9 Not an Investment Company. Neither Borrower,
any of its Subsidiaries nor CBL Properties, Inc. is an "investment
company" within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 5.10 Information. All information, reports,
papers and data given to Agent with respect to CBL Properties,
Inc., Borrower, their respective Subsidiaries or others obligated
under the terms of the Original Credit Agreement, this Agreement,
the other Loan Documents or the Collateral Documents are, or at
the time of delivery will be, when taken as a whole, accurate,
complete and correct in all material respects and do not, or will
not, omit any fact, the inclusion of which is necessary to prevent
the facts contained therein from being materially misleading; all
financial data have been, or when delivered will have been,
prepared in accordance with GAAP consistently applied and fully
and accurately present, or will present, in all material respects,
the financial condition of the subjects thereof as of the dates
thereof; and with respect to the financial data heretofore
furnished, no material adverse change has occurred in the
financial conditions reflected therein since the dates thereof
other than a material adverse change which Borrower has fully
disclosed to the Agent unless the Agent notifies Borrower that
Agent has determined that such material adverse effect is likely
to result in a future Default or Event of Default under any
covenant set forth in Section 8 hereof.
SECTION 5.11 Insurance. Schedule 0 sets forth a true and
correct description of the insurance coverage maintained by or on
behalf of Borrower and its Subsidiaries currently in effect.
SECTION 5.12 Liens. The liens and security interests
granted to Agent pursuant to the Collateral Documents (when
executed and delivered to Agent pursuant
44
to the Original Credit Agreement and/or this Agreement) are valid
and enforceable first priority liens and security interests
subject only to Permitted Liens.
SECTION 5.13 Title to the Projects. Borrower or a Wholly
Owned Subsidiary of Borrower or a Subpartnership holds full legal
and equitable title to the Eligible Projects subject only to Liens
permitted by Section 0 hereof.
SECTION 5.14 Governmental Requirements. To the best
knowledge of Borrower, no violation of any material governmental
requirement exists with respect to the Eligible Projects, and the
use or anticipated use thereof complies with applicable zoning
ordinances, regulations and restrictive covenants affecting such
Projects, and all governmental requirements for such use have been
satisfied, except where such violation or noncompliance could not
(a) have a material adverse effect on the business, properties,
financial position, results of operations or prospects of
Borrower, CBL Properties, Inc. and their respective Subsidiaries
other than a material adverse effect which Borrower has fully
disclosed to the Agent unless the Agent notifies Borrower that
Agent has determined that such material adverse effect is likely
to result in a future Default or Event of Default under any
covenant set forth in Section 8 hereof; (b) have a material
adverse effect on any Eligible Project; or (c) in any manner draw
into question the validity of any Loan Document or Collateral
Document or the priority of any Lien, Mortgage or security
interest created hereby or pursuant to the Collateral Documents.
SECTION 5.15 ERISA; Plan Assets. Borrower is a not an
"employee benefit plan" as defined in Section 3(3) of ERISA and
the assets of Borrower do not constitute "plan assets" within the
meaning of 29 C.F.R. SECTION 2510.3-101. The execution, delivery and
performance of this Agreement, and the borrowing and repayment of
amounts thereunder, do not and will not constitute on the part of
Borrower "prohibited transactions" under ERISA or the Internal
Revenue Code.
ARTICLE 6.
COVENANTS
Borrower agrees that, so long as Lenders have any Commitment
hereunder, any of the Obligations remain unpaid or any Letter of
Credit remains outstanding, unless the Majority Lenders otherwise
agree in writing:
SECTION 6.1 Reporting Requirements. Borrower shall deliver
to Agent (with copies for each Lender):
(a) as soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
Borrower, Combined audited annual financial statements of Borrower
and CBL Properties, Inc., for such fiscal year, consisting of
Combined balance sheet of the end of such fiscal year and the
related Combined statements of income and retained earnings and
Combined statements of cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the
previous fiscal year, and accompanied by the materially
unqualified opinion of Xxxxxx Xxxxxxxx & Co. or any other
nationally recognized firm of independent certified public
accountants regularly retained by Borrower and acceptable to the
Majority Lenders;
45
(b) as soon as available and in any event within sixty (60)
days after the end of each fiscal quarter of Borrower, Combined
interim unaudited financial statements of Borrower and CBL
Properties, Inc., including Combined balance sheets, Combined
statements of income and retained earnings and Combined statements
of cash flow, for the quarter and year-to-date period then ended,
prepared in accordance with GAAP, setting forth in comparative
form the figures for the corresponding quarter and the
corresponding portion of Borrower's previous fiscal year, all
certified (subject to normal year-end adjustments) by the chief
financial officer or the chief accounting officer of Borrower;
(c) simultaneously with the delivery the financial
statements referred to in clauses (a) and (b) above, a certificate
of the chief financial officer or the chief accounting officer of
Borrower (i) setting forth in reasonable detail the calculations
required to establish whether Borrower was in compliance with the
requirements of Sections 0, 0 through 0 and 0 on the date of such
financial statements, (ii) stating whether, to the actual
knowledge of such officer, any Default or Event of Default exists
on the date of such certificate and, if any Default or Event of
Default then exists, setting forth the details thereof and the
action which Borrower is taking or proposes to take with respect
thereto, and (iii) setting forth a schedule of all Contingent
Obligations of Borrower as of the date of such financial
statements;
(d) as soon as available and in any event within forty five
(45) days after the end of each fiscal quarter of Borrower, a
Borrowing Base report, certified by the chief financial officer or
the chief accounting officer of Borrower, setting forth in
reasonable detail the calculations required to establish the
Borrowing Base for each Eligible Project and the Borrowing Base
for all Eligible Projects as of the last day of such quarter, all
in reasonable detail and satisfactory to Agent; provided, however,
that any change in the Borrowing Base reflected in such Borrowing
Base report shall not become effective until Agent notifies
Borrower in writing of Agent's approval of such Borrowing Base
report. Agent shall use its reasonable efforts to notify Borrower
of its approval or non-approval of the Borrowing Base report
within ten (10) business days after Agent's receipt of the
Borrowing Base report, together with a statement, in reasonable
detail, of the reasons for any non-approval of such report;
(e) simultaneously with the delivery of each set of
financial statements referred to in clause (a) above, a statement
of the firm of independent public accountants which reported on
such statements (i) whether anything has come to their attention
in the normal course of their audit to cause them to believe that
any Default or Event of Default existed on the date of such
statements and (ii) confirming the calculations set forth in the
officer's certificate delivered simultaneously therewith pursuant
to clause (c) above;
(f) simultaneously with the delivery of each set of
financial statements referred to in clause (b) above, a
certificate of the chief financial officer or the chief accounting
officer of Borrower, certifying as to each Reserved Construction
Loan: (i) that, to the actual knowledge of such officer, no
monetary or material non-monetary default or event of default
exists thereunder; (ii) the amount currently available in the
interest reserve available for the payment of interest on such
Reserved Construction Loan; (iii) an updated cash flow projections
for the project being constructed with the proceeds of such
Reserved Construction Loan, setting forth the assumptions on which
such projections are based; (iv) the outstanding principal balance
of such Reserved Construction Loan; (v) the undisbursed amount of
such Reserved Construction Loan (other than such interest
reserve); and (vi) such other matters as the Agent or the Majority
Lenders may reasonably request;
46
(g) as soon as available and in any event within one
hundred twenty (120) days after the end of each fiscal year of
Borrower, all financial information of Borrower, CBL Properties,
Inc., CBL Management Inc., and the Eligible Projects as Agent
shall reasonably request and as shall be reasonably available to
Borrower, CBL Properties, Inc. or CBL Management, Inc.;
(h) within forty five (45) days after the end of each
fiscal quarter, operating statements for each Eligible Project for
such quarter and for the year-to-date period then ended, together
with a rent roll, lease expiration report (unless included in the
rent roll) and leasing status report for each Eligible Project;
(i) promptly after obtaining actual knowledge of any
Default or Event of Default, a certificate of the controller or
senior vice-president in accounting of Borrower setting forth the
details thereof and the action which Borrower is taking or
proposes to take with respect thereto;
(j) promptly upon the filing thereof, copies of all
registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and reports
on Forms 10-K, 10-Q and 8-K (or their equivalents) which CBL
Properties, Inc., Borrower or any of their respective Affiliates
shall have filed with the Securities and Exchange Commission;
(k) promptly upon the consummation thereof, a description
in reasonable detail of any acquisition of assets in excess of
$35,000,000.00 in a single transaction or related series of
transactions;
(l) promptly upon obtaining actual knowledge thereof, a
description in reasonable detail of any event or condition which
could materially adversely affect the business, properties,
financial position, results of operations or prospects of Borrower
or which in any material manner draws into question the validity
of any Loan Document;
(m) from time to time such additional information regarding
the financial position or business of Borrower, its Affiliates or
any Project as Agent may reasonably request, to the extent such
information is reasonably available to Borrower;
(n) concurrently with, subject to the requirements of the
Securities and Exchange Commission or any securities exchange on
which CBL Properties, Inc.'s securities are traded, issuance to
analysts and the media (after notification of the New York Stock
Exchange and release to an established wire service recognized as
an official disclosure source) of any press release concerning
Borrower, telecopy notice of such press release and the contents
thereof.
SECTION 6.2 Payment and Performance. Borrower shall pay and
discharge, and shall cause each of its Subsidiaries to pay and
discharge, at or before maturity, subject to any applicable notice
and grace periods, all material obligations and liabilities,
including, without limitation, tax liabilities, except where the
same may be contested in good faith by appropriate proceedings,
and will maintain, in accordance with GAAP, appropriate reserves
for the accrual of any of the same; and shall pay the
Indebtedness, as and when called for in this Agreement, and on or
before the due dates thereof, subject to any applicable notice and
grace periods, and will perform all of the Obligations in full and
on or before the dates
47
same are to be performed subject to any applicable notice and
grace periods.
SECTION 6.3 Maintenance of Property; Insurance.
(a) Borrower shall keep, or cause to be kept, all
Collateral in good working order and condition, ordinary wear and
tear and insured casualty losses excepted.
(b) Borrower shall obtain and maintain, or cause to be
obtained and maintained, insurance upon and relating to the
Collateral, insuring against personal injury and death, loss by
fire and such other hazards, casualties and contingencies
(including business interruption insurance covering loss of rents
for a period of twelve [12] months and builder's all risk
coverage) as are normally and usually covered by extended coverage
policies in effect where the Collateral is located and such other
risks as may be reasonably specified by Agent, from time to time,
all in such amounts and with such insurers of recognized
responsibility as are reasonably acceptable to Agent. Each
insurance policy covering the Collateral issued in connection
therewith shall provide by way of endorsements, riders or
otherwise that (a) proceeds will be payable to Agent as its
interest may appear, it being agreed by Borrower and Agent that
such payments, less Agent's expenses in collecting such insurance
proceeds, shall be applied, to the restoration, repair or
replacement of the Collateral to the extent provided for in the
Collateral Documents encumbering such Collateral, provided,
however, notwithstanding anything to the contrary contained herein
or in the Collateral Documents, so long as no Default or Event of
Default is then in existence, Borrower may instruct Agent to apply
all or any portion of casualty insurance proceeds held by Agent in
connection with damage to an Eligible Project to prepayment of the
Loan. In the event Borrower so instructs Agent to apply insurance
proceeds to the prepayment of the Loan, the Borrowing Base shall
be reduced by the amount of insurance proceeds so applied;
provided however, that notwithstanding such reduction in the
Borrowing Base, Borrower may reborrow, in accordance with the
terms hereof, an amount not greater than the amount of such
proceeds so applied to prepayment of the Loan, so long as the
amount so reborrowed is used for the restoration of the Eligible
Project giving rise to such proceeds in the manner required under
the Collateral Documents, and upon full restoration, the Borrowing
Base shall be increased by an amount equal to the prior reduction.
SECTION 6.4 Business; Existence. Neither Borrower nor any
of its wholly Owned Subsidiaries nor any Subpartnership shall
engage to any substantial extent in any line or lines of business
other than the businesses of owing, managing, leasing and
operating regional malls and retail strip shopping centers and
other related businesses to the extent incidental to the conduct
of any of the foregoing businesses. Except as otherwise expressly
permitted by the terms of this Agreement, Borrower shall, and
shall cause each of its Wholly Owned Subsidiaries and each
Subpartnership to, preserve and keep in full force and effect its
existence, rights, franchises and trade names.
SECTION 6.5 Payment of Impositions. Borrower shall duly pay
and discharge, or cause to be paid and discharged, all Impositions
not later than the due date thereof, or the day prior to the day
any fine, penalty, interest or cost may be added thereto or
imposed, or the day prior to the day any Lien may be filed, for
the nonpayment thereof (if such day is used to determine the due
date of the respective item); provided, however, that Borrower
may, if, to the extent and in the manner permitted by law, (a) pay
the Impositions in installments, whether or not interest shall
accrue on the unpaid balance of such Impositions, if such
installment payment would not create or permit the filing of a
Lien against the Collateral, and (b) contest the payment of any
Impositions in good faith and by
48
appropriate proceedings provided that: (i) any such contests
shall be prosecuted diligently and in a manner not prejudicial to
the rights, liens and security interests of Agent, (ii) Borrower
shall deposit funds with Agent or obtain a bond in form and
substance and with an issuing company reasonably satisfactory to
Agent in an amount sufficient to cover any amounts which may be
owing in the event the contest may be unsuccessful (Borrower
agreeing to make such deposit or obtain such bond, as the case may
be, within five (5) days after demand therefor and that, if made
by payment of funds to Agent, the amount so deposited shall be
disbursed in accordance with the resolution of the contest either
to Borrower or the adverse claimant), (iii) no contest may be
conducted and no payment may be delayed beyond the date on which
the Collateral could be sold for nonpayment (provided however,
that such contest may be continued beyond such date so long as
Borrower provides assurances, by bond, payment or otherwise, that
the Collateral will not be so sold) and (iv) Agent may pay over to
the taxing authority entitled thereto any or all of the funds at
any time when, in the opinion of Agent's counsel, the entitlement
of such authority to such funds is established and no reasonable
avenues for contesting such entitlement are available to Borrower.
Subject to Borrower's right to contest as provided for herein,
Borrower shall submit to Agent copies of tax statements and paid
tax receipts evidencing the due and punctual payment of all real
estate and personal property taxes, charges and assessments levied
upon or assessed or charged against the Collateral on or before
thirty (30) days of the delinquent date of any such taxes.
SECTION 6.6 Compliance with Legal Requirements. Borrower
shall, and shall cause each Wholly Owned Subsidiary or
Subpartnership owing any of the Collateral to, promptly and
faithfully comply with, conform to and obey all present and future
material Legal Requirements, whether or not same shall necessitate
structural changes in, improvements to, or interfere with the use
or enjoyment of the Collateral; provided, however, that Borrower
may contest a Legal Requirement in good faith by appropriate
proceedings; provided further, that with respect to Legal
Requirements affecting any portion of the Collateral (or any other
property of Borrower) which is leased to a financially capable
tenant, if such Lease provides that compliance with such Legal
Requirement is the obligation of the tenant thereunder, Borrower
shall be deemed to comply with its obligations under this
Agreement with respect to such Legal Requirement if Borrower is
continuing to exercise in good faith any remedies it may have
under said Lease to compel such tenant to comply with such Legal
Requirement.
SECTION 6.7 Inspection of Property, Books and Records.
Borrower will keep, and will cause each Subsidiary to keep, proper
books of record and account in which full, true and correct
entries shall be made of all dealings and transactions in relation
to its business and activities; and will permit, and will cause
each Subsidiary to permit, representatives of Agent to visit and
inspect any of their respective properties, to examine and make
abstracts from any of their respective books and records and to
discuss their respective affairs, finances and accounts with their
respective officers, employees and independent public accountants,
all at such reasonable times and as often as may reasonably be
desired.
SECTION 6.8 Indebtedness. Borrower shall not incur, assume
or suffer to exist any outstanding Indebtedness bearing interest
at a variable rate that fluctuates during the scheduled life of
such Indebtedness (other than Indebtedness under Reserved
Construction Loans) in an aggregate principal amount in excess of
twenty-five percent (25%) of Gross Asset Value at any one time
outstanding unless Borrower has obtained an interest rate swap,
cap or collar agreement or similar arrangement with a recognized
investment grade financial institution which prevents the all-in
effective interest rate payable by Borrower in respect of the
principal amount of such Indebtedness in excess of twenty-five
percent (25%) of Gross Asset
49
Value (including base rate, applicable margin and reserve and
similar costs) from increasing above ten percent (10%) per annum.
SECTION 6.9 Consolidations, Mergers and Sales of Assets.
Borrower shall not and shall not permit its Subsidiaries to, (i)
consolidate or merge with or into any other Person (other than
Borrower or another Subsidiary) (ii) sell, lease or otherwise
transfer, directly or indirectly, any of its real estate
properties or investments in ventures holding such properties to
any other Person, other than in the ordinary course of business.
SECTION 6.10 Use of Proceeds. The proceeds of the
Advances made under this Agreement shall be used by Borrower (a)
for the payment of pre-development and development costs incurred
in connection with the Projects or proposed Projects; (b) to
finance acquisitions and loans permitted by Section 0 hereof; (c)
to pay Indebtedness of Borrower and its Subsidiaries; (d) to make
equity Investments permitted hereunder (e) to provide for the
general working capital needs of Borrower and its Subsidiaries;
and (f) to make dividend payments; provided, however, that (i)
proceeds of Advances may not be used to make dividend payments (A)
more than twice during any calendar year; or (B) in respect of two
(2) consecutive fiscal quarters of Borrower. No portion of the
proceeds of any Advance may be used by Borrower in any manner
which would cause such Loan or the application of the proceeds
thereof to violate any of Regulations G, T, U or X of the Board of
Governor of the Federal Reserve System.
SECTION 6.11 Investment Concentration. (a) Borrower
shall not make, and shall not permit any of its Subsidiaries to
make, any Investment in the following items which would cause the
value of such holdings of Borrower to exceed the following
percentages of Borrower's Gross Asset Value:
(i) raw land, such that the aggregate book value of
all such raw land (other than: (A) raw land subject to a
ground lease under which Borrower is the landlord and a
Person not an Affiliate of Borrower is the tenant; (B) land
on which development of a Project has commenced; (C) land
subject to a binding contract of sale under which the
Borrower or one of its Subsidiaries is the seller, the buyer
is not an Affiliate of Borrower and (D) out-parcels held for
lease or sale) exceeds ten percent (10%) of Gross Asset
Value;
(ii) developed real estate used primarily for non-retail
purposes, such that the aggregate book value of such
real estate (other than the real estate located at 0000 Xxx
Xxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx) exceeds ten percent (10%) of
Gross Asset Value;
(iii) Capital Stock of any Person, such that the
aggregate value of such Capital Stock in Unconsolidated
Affiliates other than CBL Management, Inc., calculated on the
basis of the lower of cost or market, exceeds ten percent
(10%) of Gross Asset Value;
(iv) Mortgages, such that the aggregate principal
amount secured by Mortgages acquired by Borrower after the
Effective Date exceeds ten percent (10%) of Gross Asset
Value;
(v) Investments made after the date hereof in
partnerships, joint ventures and other non-corporate Persons
accounted using the equity basis of accounting (determined in
accordance with GAAP), such that the aggregate outstanding
amount of such Investments (other than Investments in (A)
partnerships in which (I) Borrower is the sole general
partner and the only
50
limited partners are either (a) the Person from whom the real
estate owned by such Partnership was purchased, and such
Person's successors and assigns or (b) a Person operating
stores which anchor the development constructed or to be
constructed by such partnership or (II) Borrower owns not
less than ninety percent (90%) of the partnership interests
and has the unilateral right to make all operational and
strategic decisions, or (B) partnerships, joint ventures and
other non-corporate Persons whose financial reports are
prepared on a consolidated basis with Borrower) exceeds
fifteen percent (15%) of Gross Asset Value;
(vi) items described in subsections (i), (ii), (iii)
and (v) of this Section 6.11(a), such that the aggregate
value thereof, determined in accordance with such
subsections, exceeds thirty percent (30%) of Gross Asset
Value.
(b) Neither Borrower nor any of its Subsidiaries shall
acquire the business of or all or substantially all of the assets
or stock of any Person, or any division of any Person, whether
through Investment, purchase of assets, merger or otherwise;
provided that Borrower or its Subsidiaries may make such an
acquisition so long as Borrower has delivered to Agent, not less
than thirty (30) days prior to the date such acquisition is
consummated, (i) all information related to such acquisition as is
reasonably requested by the Agent and (ii) a certificate, signed
by the chief financial officer of Borrower, certifying that,
giving effect to such acquisition, there shall not exist any
Default or Event of Default hereunder and setting forth in
reasonable detail the calculations setting forth, on a pro forma
basis giving effect such acquisition, Borrower's compliance with
Xxxxxxxx 0, 0, 0, 0, 0, 0, 0 xx 0; and
SECTION 6.12 Total Obligations to Gross Asset Value. Borrower
shall not at any time permit the ratio of (a) Total
Obligations to (b) Gross Asset Value to exceed 0.55 to 1.00.
SECTION 6.13 Minimum Net Worth. Borrower shall not
permit Net Worth at any time to be less than an amount equal to
$315,330,052 plus fifty percent (50%) of the net proceeds or value
(whether cash, property or otherwise) received by CBL Properties,
Inc. or Borrower from any issuance after the Effective Date of any
shares of Capital Stock of CBL Properties, Inc., any operating
partnership units of Borrower or any shares of Capital Stock or
other equity interest in any Subsidiary of Borrower.
SECTION 6.14 Interest Coverage Ratio. Borrower shall not
permit, as of the last day of any fiscal quarter, the Interest
Coverage Ratio to be less than 2.0 to 1.0.
SECTION 6.15 Debt Coverage Ratio. Borrower shall not
permit, as of the last day of any fiscal quarter of Borrower, the
Debt Coverage Ratio to be less than 1.75 to 1.0.
SECTION 6.16 ERISA. Borrower will operate, or will cause
its ERISA Affiliates to operate, each ERISA Plan described on
Schedule 0, and each ERISA Plan that either Borrower or its ERISA
Affiliates may adopt, sponsor or participate in after the
Effective Date, in accordance with the terms of such ERISA Plan
and in accordance with all applicable requirements of ERISA and
the Internal Revenue Code.
SECTION 6.17 Liens. Borrower shall not create, assume or
suffer to exist and shall not permit any Subsidiary to create,
assume or suffer to exist, any Lien securing Indebtedness on any
of the Collateral, except for (a) Permitted Liens; and (b) Liens
to secure Indebtedness incurred for common area maintenance,
improvements and leasing costs provided that: (i) such Lien is
expressly subordinate, on terms
51
and conditions satisfactory to the Agent and the Majority
Lenders, to the Lien created by the Collateral Documents; (ii) the
principal amount of such Indebtedness, and all interest thereon,
can be repaid from common area maintenance charges or from
additional rental charges (not a part of a rent for such Project
used most recently to determine the Appraised Value of such
Project) specifically dedicated to the repayment of such
Indebtedness; and (iii) in the case of leasing costs, such
Indebtedness does not exceed, in respect of any single Project,
$3,000,000 in aggregate principal amount at any one time
outstanding.
SECTION 6.18 Restricted Payments.
(a) Borrower shall not directly or indirectly declare or
make, or incur any liability to make, any cash or other
distributions on, or in respect of, any partnership interest in
Borrower, or other payments or transfers made in respect of the
redemption, repurchase or acquisition of such partnership
interests, except for distributions in an aggregate amount not to
exceed during any fiscal year ninety-five percent (95%) of Funds
from Operations for such fiscal year.
(b) Borrower shall not enter into any transaction with, or
pay any management or other fees to, any Affiliate, except, so
long as Borrower effectively receives at least 99% of the economic
benefit thereof, management or other fees payable to CBL
Management, Inc.
ARTICLE 7.
DEFAULTS
SECTION 7.1 Events of Default. It shall be an event of
default ("Event of Default") if one or more of the following
events shall have occurred and be continuing:
(a) Borrower shall fail, refuse or neglect to pay, in full,
any installment or portion of the Obligations as and when the same
shall become due and payable, whether at the due date thereof
stipulated in this Agreement or the Notes, or at a date fixed for
prepayment, or by acceleration or otherwise, and such failure,
refusal or neglect continues for a period of fifteen (15) days
after notice thereof from Agent; provided, however, that Agent
shall not be required to give such notice more than twice during
any twelve consecutive month period; provided, further, that if
such installment or portion of the Obligations becomes due and
payable as a result of Agent's accelerating the maturity of the
Obligations in accordance with the this Agreement, neither any
requirement of notice nor the fifteen (15) day grace/cure period
for payment set forth in this Section 0 shall apply to the
accelerated due date;
(b) Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in Sections
0, 0, 0, 0, 0, 0, 0 or 0 hereof and such failure shall continue
for ninety (90) days after the earlier of (i) the date any Senior
Officer of Borrower has actual knowledge of such failure or (ii)
the date written notice of such failure has been given to Borrower
by Agent;
(c) Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant or agreement contained in this
Agreement (other than those covered by clause (a) or (b) above)
for thirty (30) days after written notice thereof has been given
to Borrower by Agent; provided; however, that is such failure is
curable but
52
requires work to be performed, acts to be done or conditions to
be remedied which, by their nature, cannot be performed, done or
remedied, as the case may be, within such thirty (30) day period,
no Event Default shall be deemed to have occurred if Borrower or
its Subsidiaries commence same within such thirty (30) day period
and continuously prosecute the same to completion within ninety
(90) days after such notice.
(d) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall fail to observe or perform any covenant or
agreement contained in any of the Collateral Documents, or there
occurs any other default under any of the Collateral Documents,
and such failure or default shall continue beyond any applicable
grace or cure period;
(e) any representation, warranty or statement made by
Borrower, CBL Properties, Inc. or any of their Subsidiaries in,
under or pursuant to this Loan Documents or the Collateral
Documents or any affidavit or other instrument executed in
connection with the Loan Documents or Collateral Documents shall
be false or misleading in any material respect as of the date
hereof or shall become so at any time prior to the repayment in
full of the Obligation and, except in the case of fraud, such
breach is not cured with 30 days after the earlier of (i) the date
any Senior Officer of Borrower or CBL Properties, Inc. has actual
knowledge of such breach or (ii) the date written notice of such
breach is given to Borrower by Agent;
(f) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall default in the payment when due of any
Indebtedness under any Guarantee, note, indenture or other
agreement relating to or evidencing Indebtedness (other than
Indebtedness which is fully non-recourse as to Borrower, CBL
Properties, Inc. or such Subsidiary and which has a principal
balance of less than any amount equal to $10,000,000.00 less the
outstanding amount of Permitted Deficiencies), or any event
specified in any Guarantee, note, indenture or other agreement
relating to or evidencing any such Indebtedness shall occur if the
effect of such event is to cause or to permit (giving effect to
any grace or cure period applicable thereto) the holder or holders
of such Indebtedness to cause such Indebtedness to become due, or
to be prepaid in full (whether by redemption, purchase or
otherwise), prior to its stated maturity;
(g) Borrower, CBL Properties, Inc. or any of their
Significant Subsidiaries shall (1) voluntarily be adjudicated as
bankrupt or insolvent, (2) file any petition or commence any case
or proceeding under any provision or chapter of the Federal
Bankruptcy Code or any other federal or state law relating to
insolvency, bankruptcy, rehabilitation, liquidation or
reorganization, (3) make a general assignment for the benefit of
its or his creditors, (4) have an order for relief entered under
the Federal Bankruptcy Code with respect to it or him, (5) convene
a meeting of its or his creditors, or any class thereof, for the
purpose of effecting a moratorium upon or extension or composition
of its or his debts, (6) admit in writing that it or he is
generally not able to pay its or his debts as they mature or
generally not pay its or his debts as they mature, or (7) become
insolvent;
(h) (1) a petition is filed or any case or proceeding
described in Section 0 above is commenced against Borrower, CBL
Properties, Inc. or any of their Significant Subsidiaries, or
against the assets of any such persons or entities and either an
order for relief is granted or such petition and the case or
proceeding initiated thereby is not dismissed within ninety (90)
days from the date of the filing, (2) an answer is filed by
Borrower, CBL Properties, Inc. or any of their
53
Significant Subsidiaries, admitting the allegations of any such
petition, or (3) a court of competent jurisdiction enters an
order, judgment or decree appointing, without the consent of
Borrower, CBL Properties, Inc. or any of their Significant
Subsidiaries, a custodian, trustee, agent or receiver for it or
him, or for all or any part of its or his property, or authorizing
the taking possession by a custodian, trustee, agent or receiver
of it or him, or all or any part of its or his property unless
such appointment is vacated or dismissed or such possession is
terminated within ninety (90) days from the date of such
appointment or commencement of such possession, but not later than
five (5) days before the proposed sale of any assets of Borrower,
CBL Properties, Inc. or such Significant Subsidiary, by such
custodian, trustee, agent or receiver, other than in the ordinary
course of the business of Borrower, CBL Properties, Inc. or such
Subsidiary;
(i) one or more judgments or orders for the payment of
money in excess of an amount equal to $10,000,000 less the
outstanding amount of Permitted Deficiencies shall be rendered
against Borrower, CBL Properties, Inc. or any of their Significant
Subsidiaries and such judgment(s) or order(s) shall continue
unbonded, unsatisfied and unstayed for a period of sixty (60)
days;
(j) the failure of Xxxxxxx X. Xxxxxxxx to remain active in
the management of Borrower, CBL Properties, Inc. and CBL
Management, Inc.; provided, however, that in the event of the
death or incapacity of Xxxxxxx X. Xxxxxxxx, no Default or Event of
Default shall arise solely by virtue of this clause (j) if either
(i) Borrower, CBL Properties, Inc. and CBL Management, Inc. shall
have each retained, within 180 days of the date of the death or
incapacity of Xxxxxxx X. Xxxxxxxx, senior management having, in
the reasonable opinion of the Agent and the Majority Lenders,
sufficient skill and experience in Borrower's industry to manage
Borrower competently and efficiently; or (ii) at least two of
Xxxxx X. Xxxxxxx, Xxxx X. Xxx, Xxx Xxxxxx and/or Xxxxxxx Xxxxxxxx
remain active as Senior Officers of Borrower, CBL Properties, Inc.
and CBL Management, Inc.
(k) (1) Borrower, CBL Properties, Inc. or any of their
Subsidiaries shall die, dissolve, terminate or liquidate, or merge
with or be consolidated into any other entity (except as permitted
by Section 0 hereof), or shall hypothecate, pledge, mortgage or
otherwise encumber all or any part of the beneficial ownership
interest in Borrower or shall attempt to do any of the same; or
(2) Borrower or any of its Subsidiaries shall amend or modify, in
a manner which would adversely affect Agent or the Lenders, its
articles of incorporation, bylaws, articles of partnership,
certificate of partnership or other charter or enabling documents,
and Majority Lenders have not given its prior written consent to
such amendments or modifications;
(l) the failure of Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx,
Xxxx X. Xxx, Xxx Xxxxxx, Xxx X. Xxxxxxxx and/or Xxxxxxx Xxxxxxxx
to own, directly or through CBL & Associates, Inc., beneficially
and of record, at least twenty percent (20%) of the shares of
equity of Borrower and CBL Properties, Inc., on a Combined basis
(without giving effect to the issuance after the date hereof of
stock of CBL Properties, Inc. at a price equal to the fair market
value of such stock on the date of such issuance); the failure of
CBL Properties, Inc. to be the sole general partner of Borrower;
or the failure of Xxxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxx, Xxxx X.
Xxx, Xxx Xxxxxx, Xxx X. Xxxxxxxx and/or Xxxxxxx Xxxxxxxx to
collectively own, beneficially and of record, with power to vote,
an aggregate amount of at least fifty one percent (51%) of the
shares of voting stock of CBL Management, Inc., unless such
failure is the result of the merger of CBL Management, Inc. with
and into Borrower
54
or CBL Properties, Inc., with Borrower or CBL Properties, Inc. as
the surviving Person; provided, however, that Xxxxxxx X. Xxxxxxxx,
Xxxxx X. Xxxxxxx, Xxxx X. Xxx, Xxx Xxxxxx, Xxx X. Xxxxxxxx and
Xxxxxxx Xxxxxxxx shall be deemed to own any equity interest so
long as the same is owned by (i) such Person, (ii) a Subsidiary of
such Person, (iii) a trust or similar entities in which such
Person and members of such Person's family, including spouses,
children, parents, siblings and their descendants, are the sole
beneficiaries of all of the interest therein;
(m) Borrower or any of its Subsidiaries shall fail to
maintain the insurance coverage described in Schedule 0 as being
maintained by it at the date of this Agreement or any insurer
listed as providing any of such insurance coverage shall cease to
have an A.M Best policyholders rating of at least A-IX (with
respect to liability) or A-XII (with respect to property damage);
provided that it shall not constitute an Event of Default
hereunder if Borrower shall establish deductibles with respect to
any such listed insurance not exceeding $50,000.00 per occurrence;
or
(n) the assets of Borrower, CBL Properties, Inc. or any of
their Subsidiaries at any time constitute assets, within the
meaning of ERISA, the Internal Revenue Code and the respective
regulations promulgated thereunder, of any ERISA Plan or Non-ERISA
Plan.
(o) CBL Properties, Inc. shall (i) fail to have the shares
of its Capital Stock listed for trading on the New York Stock
Exchange or the American Stock Exchange, or the respective
successors thereto; (ii) fail to remain qualified as a REIT under
the Internal Revenue Code; or (iii) amend or modify its
Certificate of Incorporation in a manner which would adversely
affect Agent or the Lenders except (A) with the prior written
consent of the Majority Lenders; (B) to the extent required in
order to remain qualified as a real estate investment trust under
the Internal Revenue Code; or (C) to the extent required by
Applicable Law.
(p) Borrower shall cease to represent at least ninety
percent (90%) of the book value of CBL Properties, Inc. or the
revenues of Borrower for any fiscal year shall fail to represent
at least ninety percent (90%) of the total revenues of CBL
Properties, Inc. for such fiscal year.
(q) At any time, for any reason (i) subject to the
provisions of Section 7.3 hereof, any Collateral Document or other
Loan Document ceases to be in full force and effect in any
material respect or (ii) Borrower or any Affiliate of Borrower
seeks to repudiate its Obligations thereunder and the Liens
intended to be created thereby are, or Borrower or any Affiliate
of Borrower seeks to render such Liens, invalid and unperfected,
or (iii) subject to the provisions of Section 7.3 hereof, Liens in
favor of the Agent and/or Lenders contemplated by the Collateral
Documents shall, at any time, for any reason, be invalidated or
otherwise cease to be in full force and effect, or such Liens
shall be subordinated or shall not have the priority contemplated
by this Agreement or the other Loan Documents, and such Default
under this item (ii) continues for thirty (30) days after written
notice thereof has been given to Borrower Agent.
55
SECTION 7.2 Remedies. Upon the occurrence of an Event of
Default: (a) in the case of any Event of Default specified in
clauses 0 or 0 above with respect to Borrower, CBL Properties,
Inc. or any of their respective Significant Subsidiaries, the
Commitments shall automatically terminate and the Obligations
(together with accrued interest thereon) shall become immediately
due and payable, without any notice to Borrower or any other act
by Agent and without presentment, demand, protest, notice of
intention to accelerate or notice of acceleration, or other notice
of any kind, all of which are hereby waived by Borrower; (b) the
Agent shall, at the direction of the Majority Lenders (i) by
notice to Borrower terminate the Commitments, which shall
thereupon terminate, and (ii) by notice to Borrower declare the
Obligations (together with accrued interest thereon) to be, and
the Obligations shall thereupon become, immediately due and
payable without presentment, demand, protest, notice of intention
to accelerate or notice of acceleration, or other notice of any
kind, all of which are hereby waived by Borrower; and (c) the
Agent may exercise any and all other rights and remedies granted
to the Agent under this Agreement or under any of the Loan
Documents or pursuant to law, all of which shall be cumulative and
none of which shall be exclusive.
SECTION 7.3 Actions in Respect of the Letters of Credit Upon
Default. If any Event of Default shall have occurred and be
continuing, the Agent may, irrespective of whether it is taking
any of the actions described in Section 7.2 or otherwise, make
demand upon Borrower to, and forthwith upon such demand Borrower
will, pay to the Agent on behalf of the Lenders in same-day funds
at the Agent's Lending Office, for deposit in a cash collateral
account, an amount equal to the aggregate face amount of all
Letters of Credit then outstanding. If at any time the Agent
determines that any funds held in any such cash collateral account
are subject to any right or claim of any Person other than the
Agent and the Lenders or that the total amount of such funds is
less than the aggregate face amount of all Letters of Credit,
Borrower will, forthwith upon demand by the Agent, pay to the
Agent, as additional funds to be deposited and held in such cash
collateral account, an amount equal to the excess of (a) such
aggregate face amount of all outstanding Letters of Credit over
(b) the total amount of funds, if any, then held in such cash
collateral account that the Agent determines to be free and clear
of any such right and claim.
SECTION 7.4 Curing Defaults Under Collateral Documents.
Lenders hereby agree that Borrower may cure any Default under
Section 7.1(d) hereof relating to the Collateral Documents and any
Default under this Agreement which relates solely to an Eligible
Project by giving Agent written notice within the applicable
notice and cure period that the Eligible Project to which such
Collateral Document relates shall be removed from the Borrowing
Base, so long as both of the following conditions are satisfied:
(a) such Default does not constitute a Default or
Event of Default under any other term of this
Agreement; and
(b) the sum of the aggregate principal amount of the
outstanding Advances plus the aggregate face
amount of the outstanding Letters of Credit does
not exceed the Borrowing Base after giving effect
to the removal of such Eligible Project.
SECTION 7.5 Permitted Deficiency. Notwithstanding anything
to the contrary set forth herein, (a) failure of Borrower or any
other Person owing any of the Collateral to keep such Collateral
in the condition required under Section 6.3 hereof or under the
comparable provisions of the Mortgage applicable thereto; (b)
failure of Borrower or any of its Subsidiaries or any other Person
owning an
56
Eligible Project to pay Impositions in the manner required under
Section 6.5 hereof
or under the comparable provisions of the Mortgage applicable
thereto; (c) failure of Borrower or any other Person owning an
Eligible Project to comply with Legal Requirements applicable to
the Collateral as required under Section 0 hereof or under the
comparable provisions of the Mortgage applicable thereto; (d)
failure of Borrower or any of its Subsidiaries or any other Person
owning an Eligible Project to comply with any Legal Requirement
required under Section 5.1 of the Mortgage applicable thereto; (e)
failure of Borrower or any other Person owning an Eligible Project
to prevent alterations to any Eligible Project as required under
Section 5.2 of the Mortgage applicable thereto; (f) failure of
Borrower or any other Person owning an Eligible Project to replace
"Fixtures" or "Personalty" required under, and as such terms are
defined in, Section 5.3 of the Mortgage applicable thereto; (g)
the existence of any non-consensual Lien on the any of the
Collateral not permitted by Section 0 hereof or by the applicable
terms of the Collateral Documents; or (h) Borrower and/or its
Subsidiary, Subpartnership or other Person owing an Eligible
Project shall fail to deposit with the Agent any "Casualty
Completion Deposit" or "Escrowed Sums" required under, and as such
terms are defined in, the Mortgage to which such Eligible Project
is subject, shall not constitute a Default or Event of Default
hereunder, so long as the following conditions are satisfied:
(i) the sum (without duplication) of (A) the cost of
correcting all failures described in (a) through (f)
above, as determined by Agent in its reasonable
discretion, plus (B) the amount secured by Liens
described in (g) above plus (C) the amount of
Indebtedness secured by Liens permitted under Section
0 hereof plus (D) the aggregate amount of unpaid
Casualty Completion Deposits or Escrowed Sums (said
sum being referred to herein as the "Permitted
Deficiency"), plus (E) the amount of all judgments or
orders for the payment of money rendered against
Borrower, CBL Properties, Inc. or any of their
Significant Subsidiaries which have continued
unbonded, unsatisfied and unstayed for a period of
sixty (60) days; plus (F) the principal balance of any
Indebtedness under any Guarantee, note, indenture or
other agreement relating to or evidencing Indebtedness
of Borrower, CBL Properties, Inc. or any of their
Subsidiaries on which any payment is past due or in
respect of which any event has occurred the effect of
which is to cause or to permit (giving effect to any
grace or cure period applicable thereto) the holder or
holders of such Indebtedness to cause such
Indebtedness to become due, or to be prepaid in full
(whether by redemption, purchase or otherwise), prior
to its stated maturity does not exceed, in the
aggregate at any one time, $5,000,000.00;
(ii) Such Permitted Deficiency does not constitute a
Default or Event of Default under this Agreement or
the other Loan Documents except to the extent
described in clauses (a) through (h) above;
(iii) The aggregate amount of the Permitted Deficiencies
either secured by a Lien or consisting of unpaid
Casualty Completion Deposits or Escrowed Sums does not
exceed the difference between (A) the Borrowing Base
(prior to reduction by the amount of the Permitted
Deficiency, as required by this Section 0), minus (B)
the sum of the aggregate principal amount of all
outstanding Advances plus the aggregate face amount of
all outstanding Letters of Credit;
(iv) Borrower is proceeding to cure all such failures in a
diligent manner; and 57
(v) The Borrowing Base shall be reduced by the amount of
(A) any outstanding Permitted Deficiency secured by a
Lien on any of the Collateral and (B) any outstanding
Permitted Deficiency representing an unpaid Casualty
Completion Deposit or Escrowed Sums.
ARTICLE 8.
THE AGENT
SECTION 8.1 Appointment and Authorization. Each Lender
irrevocably appoints and authorizes Agent to take such action as
agent on its behalf and to exercise such powers under the Loan
Documents and the Collateral Documents as are granted to Agent by
the terms thereof, together with all such powers as are reasonably
incidental thereto. Borrower shall be entitled to rely upon a
written notice or written response from Agent as being made
pursuant to the requisite concurrence or consent of the Lenders
necessary to take such action without investigation or otherwise
contacting the Lenders hereunder.
SECTION 8.2 Agent and Affiliates. Agent shall have the same
rights and powers under the Loan Documents and the Collateral
Documents as any other Lender and may exercise or refrain from
exercising the same as though it were not Agent, and Agent and its
Affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with Borrower or Affiliate of
Borrower as if it were not Agent hereunder.
SECTION 8.3 Action by Agent. The Agent (which term as used
in this sentence and in Section 0 hereof and the first sentence of
Section 0 hereof shall include reference to its Affiliates and its
own and its Affiliates' shareholders, officers, directors,
employees and agents): (a) shall have no duties or
responsibilities except those expressly set forth in this
Agreement, and shall not by reason of this Agreement be a trustee
for any Lender; (b) shall not be responsible to the Lenders for
any recitals, statements, representations or warranties contained
in this Agreement or any of the other Loan Documents, or in any
certificate or other instrument, document or agreement referred to
or provided for in, or received by any of them under, this
Agreement or any of the other Loan Documents, or for the value,
validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement, any Note or any of the other Loan
Documents or for any failure by Borrower or any other Person to
perform any of its obligations hereunder or thereunder;
(c) subject to Section 0 hereof, shall not be required to initiate
or conduct any litigation or collection proceedings hereunder; (d)
shall have no liability to any Lender for any determination made
in good faith by the Agent that such Lender is in default of its
obligations hereunder; and (e) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any
other agreement, document or instrument referred to or provided
for herein or in connection herewith, except for its own gross
negligence or willful misconduct. The Agent may deem and treat
the payee of any Note as the holder thereof for all purposes
hereof unless and until a written notice of the assignment or
transfer complying with the terms and conditions of Section 0
hereof.
SECTION 8.4 Consultation with Experts. Agent may consult
with legal counsel (who may be counsel for Borrower) , independent
public accountants and other experts selected by it and shall not
be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel,
accountants or experts.
57
SECTION 8.5 Reliance by Agent. The Agent shall be entitled
to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, facsimile, telegram or
cable) believed by it to be genuine and correct and to have been
signed or sent by or on behalf of the proper Person or Persons.
As to any matters not expressly provided for by this Agreement,
the Agent shall in all cases be fully protected in acting, or in
refraining from acting, and no Lender shall have any right of
action against Agent as a result of Agent acting or refraining
from acting, hereunder or under the other Loan Documents in
accordance with instructions signed by the Majority Lenders (or,
where applicable, all Lenders) and such instructions and any
action taken or failure to act pursuant thereto shall be binding
on all of the Lenders; provided, however, the Agent shall not be
required to take any action which (a) the Agent reasonably
believes will expose it to personal liability unless the Agent
receives an indemnification satisfactory to it from the Lenders
with respect to such action or (b) is contrary to this Agreement,
the Notes, the other Loan Documents or Applicable Law.
SECTION 8.6 Defaults. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of
Default (other than the non-payment of principal of or interest on
Loans or of fees) unless the Agent has received notice from a
Lender or the Borrower specifying such Default or Event of Default
and stating that such notice is a "Notice of Default." In the
event of any such non-payment or in the event the Agent receives
such a notice of the occurrence of a Default or Event of Default,
the Agent shall give, and to the extent the Agent otherwise has
actual knowledge of a Default or Event of Default the Agent shall
use best efforts to give, prompt notice thereof to the Lenders.
SECTION 8.7 Indemnification. Each Lender shall, in
accordance with its Pro Rata Share, promptly (and in all events
within ten [10] days after demand therefor) reimburse (to the
extent not reimbursed by Borrower) Agent for, and indemnify Agent
against, any third- party costs (including, without limitation,
Protective Advances and costs described in Section 0 and Section
0), expense (including attorneys' fees and disbursements provided
that, if outside counsel is not used by the Agent, the allocated
cost of in-house counsel of Agent shall be deemed to be a
third-party cost and expense ), claim, demand, action, loss or liability
(except such as result from Agent's gross negligence or willful
misconduct) that Agent may pay, suffer or incur in connection with
the Loan Documents, the Collateral Documents or any action taken
or omitted by Agent. The obligations of Lenders under this
Section 0 shall survive the payment in full of all Obligations and
the termination of this Agreement. In the event that after
payment and distribution of any amount by Agent to Lenders, any
Lender or third party, including Borrower, any creditor of
Borrower or a trustee in bankruptcy, recovers from Agent any
amount found to have been wrongfully paid to Agent or disbursed by
Agent to Lenders, then Lenders, in proportion to their respective
Pro Rata Share, shall reimburse Agent for all such amounts.
Notwithstanding the foregoing, Agent shall not be obligated to
advance any amounts hereunder (other than Agent's Pro Rata Share
of each Advance) and may require the deposit with Agent by each
Lender of its Pro Rata Share of any material expenditures
anticipated by Agent before they are incurred or made payable.
SECTION 8.8 Credit Decision. Each Lender acknowledges that
it has, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to
enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Agent or any other
Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit
decisions in taking or not taking any action
58
under the Loan Documents (including without limitation
decisions with respect to the matters described in clauses (i)
through (x) of Section 0(a) of this Agreement) or the Collateral
Documents.
SECTION 8.9 Failure to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder unless it
shall receive further assurances to its satisfaction from the
Lenders of their indemnification obligations under Section 0
hereof against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such
action.
SECTION 8.10 Resignation or Removal of Agent; Co-Agent.
(a) Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders and the Borrower.
For good cause, the Majority Lenders may remove Agent at any time
by giving at least thirty (30) days prior written notice to Agent,
Borrower and the other Lenders. For purposes of this Section
8.10, in determining whether the Majority Lenders have approved
the removal of the Agent, the Agent, in its capacity as a Lender,
will be disregarded and excluded and the Pro Rata Shares of the
remaining Lenders shall be redetermined, for voting purposes only,
to exclude the Pro Rata Shares of the Agent. Such resignation or
removal shall take effect upon the acceptance of appointment as
Agent by the successor Agent. Upon any such resignation or
removal, the Majority Lenders shall have the right to appoint a
successor Agent consented to by Borrower, which consent shall not
be unreasonably withheld. If no successor Agent shall have been
so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation or the Majority Lender's removal
of the retiring Agent, the retiring Agent may, on behalf of the
Lenders appoint a successor Agent consented to by Borrower, which
consent shall not be unreasonably withheld. Any successor Agent
must be a bank (i) the senior debt obligations of which (or such
bank's parent's senior debt obligations) are rated not less than
Baa-1 by Xxxxx'x Investors Services, Inc. or a comparable rating
by a rating agency acceptable to the Majority Lenders and (ii)
which has total assets in excess of $10,000,000,000.00. Upon the
acceptance of any appointment as Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this Article 0 shall
continue in effect for its benefit in respect of any actions taken
or omitted to be taken by it while it was acting as the Agent.
Upon the acceptance of any appointment as Agent, such successor
Agent shall confirm to Borrower, in writing, the agency fees to be
paid to such successor Agent pursuant to Section 0.
(b) In the event that Applicable Law imposes any
restrictions on the identity of an agent such as the Agent or
requires the appointment of any co-agent in connection therewith,
the Agent may, in its discretion, for the purpose of complying
with such restrictions, appoint one or more co-agents hereunder
consented to by Borrower, which consent shall not be unreasonably
withheld by Borrower. Any such Co-Agent(s) shall have the same
rights, powers, privileges and obligations as the Agent and shall
be subject to and entitled to the benefits of all provisions of
this Agreement and the Loan Documents relative to the Agent but
the appointment of a co-agent shall not increase the obligation of
Borrower hereunder. In addition to any rights of the Majority
Lenders set forth in Section 0 above, any such Co-Agent may be
removed at any time by the Agent.
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SECTION 8.11 Consent and Approvals.
(a) Each Lender has authorized and directed, and hereby
authorizes and directs, Agent to enter into the Loan Documents
other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent or the Majority Lenders (or,
where required by the express terms of this Agreement, a greater
proportion of Lenders) in accordance with the provisions of this
Agreement or any Loan Document, and the exercise by Agent or the
Majority Lenders (or, where so required, such greater proportion),
of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be
authorized and binding upon all Lenders. Without limiting the
generality of the foregoing, the Agent shall have the sole and
exclusive right and authority to:
(i) act as the disbursing and collecting agent for the
Lenders with respect to all payments and collections arising
in connection with this Agreement and the Loan Documents
relating to the Collateral;
(ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the
Borrower or any of its Subsidiaries;
(iii) act as collateral agent for the Lenders for
purposes of the perfection of all security interests and
Liens created by such agreements and all other purposes
stated therein, provided, however, the Agent hereby appoints,
authorizes and directs the Lenders to act as collateral
sub-agents for the Agent and the Lenders for purposes of the
perfection of all security interests and Liens with respect
to any of the Collateral held by such Lender;
(iv) manage, supervise and otherwise deal with the
Collateral;
(v) take such action as is necessary or desirable to
maintain the perfection and priority of the security interest
and Liens created or purported to be created by the Loan
Documents;
(vi) deliver notices, including notices of default,
hereunder and under the other Loan Documents; and
(vii) except as may be otherwise specifically
restricted by the terms of this Agreement or any other Loan
Document, exercise all remedies given to the Agent or the
Lenders with respect to the Collateral under the Loan
Documents, Applicable Law or otherwise.
(b) Each of the following shall require the approval or
consent of the Majority Lenders:
(i) approval of certain actions with respect to
management agreements for the Eligible Projects pursuant to
Section 0 hereof;
(ii) approval of a Major Construction Project under
Section 0 hereof;
(iii) approval of any material amendment of the
organizational documents of Borrower, CBL Properties, Inc. or
their respective Subsidiaries prohibited by Section 0 hereof;
(iv) approval of certain changes in executive officers
otherwise prohibited by Section 0 hereof;
60
(v) acceleration of the Obligations following an Event
of Default or rescission of such acceleration under Section 0
hereof;
(vi) approval of the exercise of rights and remedies
under the Loan Documents following an Event of Default;
(vii) removal of Agent and appointment of a successor
under Section 0 hereof;
(viii) approval of a Post-Foreclosure Plan and related
matters pursuant to Section 0 hereof; and
(ix) except as otherwise provided in Section 0,
approval of any amendment, modification or termination of
this Agreement.
(c) Designation of a Project as an Eligible Project shall
require the approval or consent of the Supermajority Lenders
pursuant to Section 0 hereof.
(d) Approval of certain Protective Advances shall require
the approval of either the Majority Lenders or all of the Lenders,
all as set forth in Section 0 hereof.
(e) In addition to the required consents or approvals
referred to in Section 0 above, Agent may at any time request
instructions from the Majority Lenders with respect to any actions
or approvals which, by the terms of this Agreement or of any of
the Loan Documents, Agent is permitted or required to take or to
grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely
entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any
Person for refraining from taking any action or withholding any
approval under any of the Loan Documents until it shall have
received such instructions from the Majority Lenders. Agent shall
promptly notify each Lender at any time that the Majority Lenders
have instructed Agent to act or refrain from acting pursuant
hereto.
(f) All communications from Agent to Lenders requesting
Lenders determination, consent, approval or disapproval (i) shall
be given in the form of a written notice to each Lender, (ii)
shall be accompanied by a description of the matter or thing as to
which such determination, approval, consent or disapproval is
requested, or shall advise each Lender where such matter or thing
may be inspected, or shall otherwise describe the matter or issue
to be resolved, (iii) shall include, if reasonably requested by a
Lender and to the extent not previously provided to such Lender,
written materials and a summary of all oral information provided
to Agent by Borrower in respect of the matter or issue to be
resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall
reply promptly, but in any event within ten (10) Business Days
after receipt of the request therefor by Agent (the "Lender Reply
Period"). Unless a Lender shall give written notice to Agent that
it objects to the recommendation or determination of Agent
(together with a written explanation of the reasons behind such
objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval
of Majority Lenders or all Lenders, Agent shall submit its
recommendation or determination for
61
approval of or consent to such recommendation or determination to
all Lenders and upon receiving the required approval or consent
shall follow the course of action or determination recommended to
Lenders by Agent or such other course of action recommended by
Majority Lenders or all Lenders, as the case may be, and each
non-responding Lender shall be deemed to have concurred with such
recommended course of action.
SECTION 8.12 Agency Provisions Relating to Collateral.
(a) Agent is hereby authorized on behalf of all Lenders,
without the necessity of any notice to or further consent from any
Lender, from time to time prior to an Event of Default, to take
any action with respect to any Collateral or Loan Document which
may be necessary to perfect and maintain perfected Liens upon the
Collateral granted pursuant to the Collateral Documents. Agent
may make, and shall be reimbursed for, Protective Advance(s)
during any one calendar year with respect to each Eligible Project
up to the sum of (i) amounts expended to pay real estate taxes,
assessments and governmental charges or levies imposed upon such
Eligible Project, (ii) amounts expended to pay insurance premiums
for policies of insurance related to such Eligible Project, and
(iii) $500,000.00. Protective Advances in excess of said sum
during any calendar year for any Eligible Project shall require
the consent of Majority Lenders. Any Protective Advance which
would, when aggregated with all other Advances, cause the Lenders
to exceed their Commitments, shall require the consent of all of
the Lenders; provided, however, that each Lender will approve or
disapprove any request by the Agent for such Protective Advance
within three (3) Business Days after receipt of such request from
the Agent; provided, further, that any Lender who fails to so
approve or disapprove within such three (3) Business Day period
shall be deemed to have approved such Protective Advance.
(b) Lenders hereby irrevocably authorize Agent, at its
option and in its discretion, to release any Lien granted to or
held by Agent upon any Collateral (i) upon termination of the
Commitments and repayment and satisfaction of all Loans, and all
other Obligations and the termination of this Agreement or (ii)
constituting property being released in compliance with Section 0
hereof or (iii) if approved, authorized or ratified in writing by
Agent at the direction of all Lenders. Without in any manner
limiting Agent's authority to act without any specific or further
authorization or consent by Lenders (as set forth in Section 0),
upon request by Agent at any time, Lenders will confirm in writing
Agent's authority to release the Collateral Documents with respect
to any Eligible Project pursuant to Section 0 or this Section 0.
(c) So long as no Default or Event of Default is then
continuing, upon receipt by Agent of any such written confirmation
as referenced in Section 0 from all Lenders of its authority to
release Collateral, and upon at least five (5) Business Days prior
written request by Borrower, Agent shall (and is hereby
irrevocably authorized by Lenders to) execute such documents as
may be necessary to evidence the release of the Liens granted to
Agent for the benefit of Lenders herein or pursuant hereto upon
such Collateral; provided, that (i) Agent shall not be required to
execute any such document on terms which, in Agent's opinion,
would expose Agent to liability or create any obligation or entail
any consequence other than the release of such Liens without
recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Liens
upon (or obligations of Borrower in respect of) any Project which
shall continue to constitute part of the Collateral.
(d) Except as provided in this Agreement, Agent shall have
no obligation whatsoever to any Lender or to any other Person to
assure that the Collateral exists or is owned by Borrower or is
cared for, protected or insured or has been
63
encumbered or that the Liens granted to Agent herein or in
any of the other Loan Documents or pursuant hereto or thereto have
been properly or sufficiently or lawfully created, perfected,
protected or enforced or are entitled to any particular priority,
or to exercise at all or in any particular manner or under any
duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to
the Agent in this Agreement or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or
in any act, omission or event related thereto, the Agent may act
in any manner it may deem appropriate, in its sole discretion,
given its own interest in the Collateral as one of the Lenders and
that the Agent shall have no duty or liability whatsoever to any
Lender.
(e) Should Agent commence any proceeding or in any way seek
to enforce its rights or remedies under the Loan Documents,
irrespective of whether as a result thereof Agent shall acquire
title to any Collateral, either through foreclosure, deed in lieu
of foreclosure, or otherwise, each Lender, upon demand therefor
from time to time, shall contribute its share (based on its Pro
Rata Share) of the reasonable costs and/or expenses of any such
enforcement or acquisition, including, but not limited to, fees of
receivers or trustees, court costs, title company charges, filing
and recording fees, appraisers' fees and fees and expenses of
attorneys to the extent not otherwise reimbursed by Borrower.
Without limiting the generality of the foregoing, each Lender
shall contribute its share (based on its Pro Rata Share) of all
reasonable costs and expenses incurred by Agent (including
reasonable attorneys' fees and expenses) if Agent employs counsel
for advice or other representation (whether or not any suit has
been or shall be filed) with respect to any Collateral or any part
thereof, or any of the Loan Documents, or the attempt to enforce
any security interest or Lien on any of the Collateral, or to
enforce any rights of Agent or any of Borrower's or any other
party's obligations under any of the Loan Documents, but not with
respect to any dispute between Agent and any other Lender(s). Any
loss of principal and interest resulting from any Event of Default
shall be shared by Lenders in accordance with their respective Pro
Rata Shares. It is understood and agreed that in the event Agent
determines it is necessary to engage counsel for Lenders from and
after the occurrence of an Event of Default, said counsel shall be
selected by Agent and written notice of such selection, together
with a copy of such counsel's engagement letter and fee estimate,
shall be delivered to Lenders.
(f) In the event that all or any portion of the Collateral
is acquired by Agent as the result of a foreclosure or the
acceptance of a deed or assignment in lieu of foreclosure, or is
retained in satisfaction of all or any part the Obligations, title
to any such Collateral or any portion thereof shall be held in the
name of Agent or a nominee or subsidiary of Agent, as agent, for
the ratable benefit of Agent and Lenders. Agent shall prepare a
recommended course of action for such Collateral (the
"Post-Foreclosure Plan"), which shall be subject to the approval
of the Majority Lenders. In the event that Majority Lenders do
not approve such Post-Foreclosure Plan, any Lender shall be
permitted to submit an alternative Post-Foreclosure Plan to Agent
and Agent shall submit any and all such additional Post-Foreclosure
Plans to the Lenders for evaluation and the approval
of Majority Lenders. Agent shall manage, operate, repair,
administer, complete, construct, restore or otherwise deal with
the Collateral acquired and administer all transactions relating
thereto, including, without limitation, employing a management
agent, leasing agent and other agents, contractors and employees,
including agents of the sale of such Collateral, and the
collecting of rents and other sums from such Collateral and paying
the expenses of such Collateral. Upon demand therefor from time
to time, each Lender will contribute its share (based on its Pro
Rata Share) of all reasonable costs and expenses incurred by Agent
pursuant 64
to the Post-Foreclosure Plan in connection with the
construction, operation, management, maintenance, leasing and sale
of such Collateral. In addition, Agent shall render or cause to
be rendered by the managing agent, to each of the Lenders,
monthly, an income and expense statement for such Collateral, and
each of the Lenders shall promptly contribute its Pro Rata Share
of any operating loss for such Collateral, and such other expenses
and operating reserves as Agent shall deem reasonably necessary
pursuant to and in accordance with the Post-Foreclosure Plan. To
the extent there is net operating income from such Collateral,
Agent shall, in accordance with the Post-Foreclosure Plan,
determine the amount and timing of distributions to Lenders. All
such distributions shall be made to Lenders in accordance with
their respective Pro Rata Shares. Lenders acknowledge that if
title to any Collateral is obtained by Agent or its nominee, such
Collateral will not be held as a permanent investment but will be
liquidated as soon as practicable. Agent shall undertake to sell
such Collateral, at such price and upon such terms and conditions
as the Majority Lenders shall reasonably determine to be most
advantageous. Any purchase money mortgage or deed of trust taken
in connection with the disposition of such Collateral in
accordance with the immediately preceding sentence shall name
Agent, as agent for Lenders, as the beneficiary or mortgagee. In
such case, Agent and Lenders shall enter into an agreement with
respect to such purchase money mortgage defining the rights of
Lenders in the same Pro Rata Shares as provided hereunder, which
agreement shall be in all material respects similar to this
Agreement insofar as this Agreement is appropriate or applicable.
SECTION 8.13 Defaulting Lenders.
(a) If a Lender fails or refuses to fund its Pro Rata Share
of an Advance hereunder and each other Lender has funded its Pro
Rata Share of such Advance, Borrower may request that the Agent
deliver to such non-funding Lender a notice stating that unless
such Lender funds such Advance within five (5) days of its receipt
of such notice, such Lender shall be a Defaulting Lender. The
Agent, upon receipt of such request, shall send such notice if
either (i) the Agent determines that such Lender, by not funding
its Pro Rata Share of such Advance, has defaulted in its
obligations hereunder or (ii) Borrower has obtained a judgment
from a court of competent jurisdiction that such non-funding
Lender has breach it obligations to Borrower by failing to fund
its Pro Rata Share of such Advance. Any determination made in
good faith by the Agent pursuant to clause (i) above shall be
conclusive and binding on Borrower and such Lender unless and
until a judgment to contrary is obtained as described in clause
(ii) above.
(b) Once a Lender becomes a Defaulting Lender, the Agent
shall notify the other Lenders of such occurrence, whereupon the
Pro Rata Share of each of the other Lenders shall be recalculated
to exclude the Pro Rata Share of such Defaulting Lender.
(c) Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender has funded its Pro Rata
Share of any Advance which was previously a Non Pro Rata Advance,
or such Lender is determined by a court of competent jurisdiction
not to have defaulted in it obligations hereunder or all other
Lenders have received payment in full (whether by repayment or
prepayment) of the principal and interest due in respect of such
Non Pro Rata Advance, all of the Obligations owing to such
Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior
payment in full of all principal, interest and fees in respect of
all Non Pro Rata Advances in which the Defaulting Lender has not
funded its Pro Rata Share (such principal,
65
interest and fees being referred to as "Senior Loans").
All amounts paid by Borrower and otherwise due to be applied to
the Obligations owing to the Defaulting Lender pursuant to the
terms hereof shall be distributed by Agent to the other Lenders in
accordance with their respective Pro Rata Shares (recalculated for
purposes hereof to exclude the Defaulting Lender's Commitment),
until all Senior Loans have been paid in full. This provision
governs only the relationship among Agent, each Defaulting Lender,
and the other Lenders; nothing hereunder shall limit the
obligation of Borrower to repay all Advances in accordance with
the terms of this Agreement. The provisions of this section shall
apply and be effective regardless of whether an Event of Default
occurs and is then continuing, and notwithstanding (i) any other
provision of this Agreement to the contrary, (ii) any instruction
of Borrower as to its desired application of payments or (iii) the
suspension of such Defaulting Lender's right to vote on matters
which are subject to the consent or approval of Majority Lenders,
Supermajority Lender or all Lenders.
(d) Agent shall be entitled to (i) collect interest from
such Lender for the period from the date on which the payment was
due until the date on which the payment is made at the Federal
Funds Rate for each day during such period, (ii) withhold or
setoff, and to apply to the payment of the defaulted amount and
any related interest, any amounts to be paid to such Defaulting
Lender under this Agreement, and (iii) bring an action or suit
against such Defaulting Lender in a court of competent
jurisdiction to recover the defaulted amount and any related
interest. In addition, the Defaulting Lender shall indemnify,
defend and hold Agent and each of the other Lenders harmless from
and against any and all costs, expenses and liabilities plus
interest thereon at the Default Rate set forth in the Loan
Documents for funds advanced by Agent or any other Lender on
account of the Defaulting Lender which they may sustain or incur
by reason of or as a direct consequence of the Defaulting Lender's
failure or refusal to abide by its obligations under this
Agreement.
(e) So long as any Lender is a Defaulting Lender, (i) no
Unused Facility Fee shall accrue in favor of, or be payable to,
such Defaulting Lender; (ii) the Defaulting Lender's outstanding
portion of the Loan shall accrue interest during each month at a
rate equal to the LIBOR Rate applicable to an Interest Period
having a duration one-month and commencing on the first LIBOR
Business Day of such month; and (iii) at the request of Borrower,
all interest payable to such Defaulting Lender shall be placed by
the Agent in a cash collateral account and held as security for
the Obligations owed to all of the Lenders and such interest shall
not be paid to such Defaulting Lender until such time as either
(A) the other Lenders have been paid in full or (B) such Lender is
no longer a Defaulting Lender; provided, however, if such Lender
has been found to be a Defaulting Lender pursuant to a judgment of
a court of competent jurisdiction that such non-funding Lender has
breached its funding obligations hereunder and such judgment is
not a final, non-appealable judgment, then until Borrower obtains
such a final, non-appealable judgment that such non-funding Lender
is in breach of its funding obligations hereunder, Borrower shall
continue to pay the Unused Facility Fee on such Defaulting
Lender's Commitment and shall pay interest on the Defaulting
Lender's portion of the outstanding Loan at the rate applicable to
the other Lenders' portion of the outstanding Loan and the Agent
shall, at the request of Borrower, deposit such Unused Facility
Fee and the excess of such interest over the interest payable at
the rate set forth in clause (ii) above into a cash collateral
account, held as security for the Obligations owed to all of the
Lenders and paid (x) to the Borrower, if such non-funding Lender
is determined, in a final, non-appealable judgment from a court of
competent jurisdiction to have breached its funding
66
obligations hereunder, or (y) to such non-funding Lender,
if such non-funding Lender is determined, in a final, non-appealable
judgment from a court of competent jurisdiction not to
have breached its funding obligations hereunder.
(f) A Defaulting Lender shall cease to be a Defaulting
Lender upon (i) the payment by such Defaulting Lender to the
Agent, for the benefit of the Agent and the Lenders, as
appropriate, of its Pro Rata Share (determined without giving
affect to any recalculation thereof as a result of such Lender
being a Defaulting Lender) of an amount equal to the amount of
each Advance which was previously a Non Pro Rata Advance plus all
other amounts required to be paid or funded by Lenders hereunder
since the date such Lender became a Defaulting Lender and for
which such Defaulting Lender has not paid or funded its Pro Rata
Share, (ii) any judgment that such non-funding Lender has breached
its obligations to Borrower in respect of such Non Pro Rata
Advance is reversed or vacated for any reason; or (iii) the Agent
and all other Lenders receiving payment in full (whether by
repayment or prepayment) of the principal and interest due in
respect of all such Non Pro Rata Advances and all such other
amounts.
(g) In the event a non-funding Lender is designated as a
Defaulting Lender as a result of a judgment that such non-funding
Lender has breached its obligations to Borrower in respect of such
Non Pro Rata Advance and such judgment is subsequently reversed
for any reason, then (i) such Lender shall not longer be a
Defaulting Lender, (ii) the Pro Rata Share of each Lender shall be
adjusted to include the Commitment of such Lender, (iii) such
Lender shall be entitled to immediate payment of any and all
amounts owed to it and held in any cash collateral account
established pursuant to Section 0; (iv) the Borrower shall, within
three (3) Business Days, repay to the Agent, for the benefit of
the other Lenders, the aggregate amount by which the outstanding
Advances made by each Lender exceeds such Lender's Pro Rata Share
of the Loan (giving effect to the recomputation of Pro Rata Share
pursuant to clause (ii) above); and (v) such Lender shall have the
right to recover from Borrower any damages that such Lender may
have suffered as a result of having been categorized as
"Defaulting Lender" and (vi) such Lender such other remedies
against Borrower as it may have under this Agreement, at law or in
equity.
SECTION 8.14 Borrower Not a Beneficiary. The provisions
of this Article 0 are solely for the benefit of the Agent and the
Lenders and neither the Borrower nor any Affiliate of the Borrower
shall have any right to rely on or enforce any of the provisions
hereof; provided, however, that the Borrower shall have the rights
granted to it in subsections (a), (b), (e) and (f) of Section 0
hereof. In performing its functions and duties under this
Agreement, the Agent shall act solely as the agent of the Lenders
and does not assume and shall not be deemed to have assumed any
obligations or relationship of agency, trustee or fiduciary with
or for the Borrower or any Affiliate of the Borrower. Lenders
represent to Borrower that, other than letter agreements relating
to the payment of fees and letters committing to participate as a
Lender, the Loan Documents contain as of the date hereof all of
the written agreements establishing the relationships between the
Agent and the Lenders and among the Lenders in connection with the
Loan.
ARTICLE 9.
MISCELLANEOUS
SECTION 9.1 Notices. All notices or other communications
required or permitted to be given pursuant to this Agreement shall
be in writing and shall be 67
considered as properly given if mailed by first-class
United States mail, postage prepaid, registered or certified with
return receipt requested, if sent by national overnight courier
providing documentation of receipt, if delivered in person to the
intended addressee or if sent by prepaid telegram, telex or
telecopy, with a copy of such telegram, telex or telecopy sent by
mail, overnight courier or personal delivery as aforesaid. Notice
so mailed shall be effective three (3) Business Days after its
deposit (provided however, that any Notice of Borrowing or Rate
Selection Notice so mailed shall be effective only if and when
received by Agent). Notice given in any other manner shall be
effective only if and when received by the addressee. For
purposes of notice, the addresses of the parties shall be as set
forth on the signature pages hereto; provided, however, that any
party shall have the right to change its address for notice
hereunder to any other location within the continental United
States by the giving of thirty (30) days' notice to the other
parties in the manner set forth hereinabove.
SECTION 9.2 No Waiver. Any failure by Agent or any Lender
to insist, or any election by Agent or any Lender not to insist,
upon strict performance by Borrower or its Affiliates of any of
the terms, provisions or conditions of the Loan Documents shall
not be deemed to be a waiver of same or of any other term,
provision or condition thereof, and Agent and the Lenders shall
have the right at any time or times thereafter to insist upon
strict performance by Borrower and its Affiliates of any and all
such terms, provisions and conditions. No delay or omission by
Agent or any Lender to exercise any right, power or remedy
accruing upon any Default or Event of Default shall exhaust or
impair any such right, power or remedy or shall be construed to be
a waiver of any such Default or Event of Default, or acquiescence
therein, and every right, power and remedy given by this Agreement
to Agent or any Lender may be exercised from time to time and as
often as may be deemed expedient by Agent or any Lender. No
consent or waiver, expressed or implied, by Agent or any Lender to
or of any Default or Event of Default by Borrower or its
Affiliates in the performance of the Obligations of Borrower and
its Affiliates hereunder or to any other Event of Default shall be
deemed or construed to be a consent or waiver to or of any other
Default or Event of Default in the performance of the same or any
other Obligations of Borrower or its Affiliates hereunder.
Failure on the part of Agent or any Lender to complain of any act
or failure to act or to declare an Event of Default, irrespective
of how long such failure continues, shall not constitute a waiver
by Agent or any such Lender of its rights hereunder or impair any
rights, powers, or remedies of Agent or any Lender hereunder.
SECTION 9.3 Expenses; Documentary Taxes; Indemnification.
(a) Borrower agrees to reimburse the Agent for all of the
Agent's reasonable costs and expenses incurred in connection with
the development, preparation, execution, delivery, modification or
amendment of this Agreement, the Notes and the Collateral
Documents, including reasonable audit costs, appraisal costs, the
cost of searches, filings and filing fees, taxes and the fees and
disbursements of Agent's attorneys, Messrs. Xxxxxxxx Xxxxxxx and
any counsel retained by them. Borrower further agrees to
reimburse the Agent and each Lender for all reasonable third-party
costs and expenses incurred by the Agent or such Lender (including
attorneys' fees and disbursements provided that, if outside
counsel is not used by the Agent, the allocated cost of in-house
counsel of Agent shall be deemed to be a third-party cost and
expense) from and after the occurrence of a Default to:
(i) commence, defend or intervene in any court proceeding;
(ii) file a petition, complaint, answer, motion or other
pleading, or to take any other action in or with respect to any
suit or proceeding (bankruptcy or otherwise) relating to the
Collateral or this Agreement, the Notes or any of the Collateral
Documents; (iii) protect, collect, lease, sell, take possession
of, or liquidate any of the Collateral; (iv) attempt to enforce
any security interest in any of the Collateral or to seek any
advice with respect to such enforcement; and (v) enforce any of
the Agent's and the Lenders' rights to collect any of the
Obligations.
(b) Borrower also agrees to pay, and to save harmless the Agent
and the Lenders from any delay in paying, any intangibles,
documentary stamp and other taxes, if any, which may be payable in
connection with the execution and delivery of this
68
Agreement, the Notes, the Letters of Credit or any of the
Collateral Documents, or the recording of any thereof, or in any
modification hereof or thereof.
(c) Borrower agrees to indemnify Agent and each Lender,
their respective Affiliates and the respective directors,
officers, agents and employees of the foregoing (each an
"Indemnitee") and hold each Indemnitee harmless from and against
any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by such indemnitee
in connection with any investigative, administrative or judicial
proceeding (whether or not such Indemnitee shall be designated a
party thereto) brought or threatened relating to or arising out of
the Loan Documents or the Collateral Documents or any actual or
proposed use of proceeds of the Loan hereunder; provided that no
Indemnitee shall have the right to be indemnified hereunder for
such Indemnitee's own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
(d) In the event of the passage of any state, federal,
municipal or other governmental law, order, rule or regulation,
subsequent to the date hereof, in any manner changing or modifying
the laws now in force governing the taxation of Mortgages,
security agreements, or assignments of leases or debts secured
thereby or the manner of collecting such taxes so as to adversely
affect Agent or any Lender, Borrower will pay any such tax on or
before the due date thereof. If Borrower fails to make such
prompt payment or if, in the opinion of Agent, any such state,
federal, municipal, or other governmental law, order, rule or
regulation prohibits Borrower from making such payment or would
penalize Agent if Borrower makes such payment or if, in the
opinion of Agent, the making of such payment might result in the
imposition of interest beyond the maximum amount permitted by
applicable law, then the entire balance of the Obligations and all
interest accrued thereon shall, at the option of Agent, become
immediately due and payable.
SECTION 9.4 Waiver of Set-Offs; Sharing of Set-Offs. (a)
Each Lender hereby waives any right of set-off against the
Obligations it has with respect to any deposit account of
Borrower, its Subsidiaries or Affiliates maintained with such
Lender or any other account or property of Borrower, its
Subsidiaries or its Affiliates held by such Lender other than the
Collateral; provided however, that the within waiver is not
intended, and shall not be deemed, to waive any right of set-off
(i) any Lender has with respect to any account required to be
maintained pursuant to this Agreement or any other Loan Document
or (ii) arising other than pursuant to this Agreement, the
Collateral Documents or the other Loan Documents.
(b) As to any set-off permitted pursuant to Section 9.4(a)
above, each Lender agrees that if it shall, by exercising any
right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due
with respect to the Obligations held by it which is greater than
the proportion received by any other Lender in respect of the
aggregate amount of principal and interest due with respect to the
Obligations held by such other Lender, such Lender receiving such
proportionately greater payment shall promptly purchase such
participation in the Obligations held by the other Lenders, and
such other adjustments shall be made, as may be required so that
all such payments of principal and interest with respect to the
Obligations held by Lenders shall be shared by Lenders based upon
each Lender's Pro Rata Share; provided that nothing in this
Section shall impair the right of any Lender to exercise any right
of set-off or counterclaim it may have and to apply the amount
subject to such exercise to the payment of Indebtedness of
Borrower other than the Obligations. Borrower agrees, to the
fullest extent it may effectively do so under applicable law, that
any holder of a participation in a Obligations, whether or not
acquired pursuant to the foregoing arrangements, may exercise
rights of set-off or counterclaim and other rights with respect to
such participation as fully as if such holder of a participation
were a direct creditor of Borrower in the amount of such
participation.
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SECTION 9.5 Amendments and Waivers.
(a) No amendment or modification of any provision of this
Agreement shall be effective without the written agreement of the
Majority Lenders (after notice to all Lenders) and Borrower
(except for amendments which by the express terms of this
Agreement do not require the consent of Borrower), and (b) no
termination or waiver of any provision of this Agreement, or
consent to any departure by Borrower therefrom (except as
expressly provided in Section 0 below with respect to waivers of
late fees), shall in any event be effective without the written
concurrence of the Majority Lenders (after notice to all Lenders),
which Majority Lenders shall have the right to grant or withhold
at their sole discretion; provided, however, that any amendment to
Section 0 shall require the consent of the Supermajority Lenders;
provided, further, that the following amendments, modifications or
waivers shall require the consent of all Lenders:
(i) increasing or decreasing the Commitment of any
Lender (except for ratable decreases in the Commitments by
Borrower pursuant to Section 0);
(ii) changing the principal amount or final maturity
of the Loan;
(iii) reducing the interest rates applicable to the
Loan;
(iv) reducing the rates on which fees payable
pursuant hereto are determined;
(v) forgiving or delaying any amount payable or
receivable under Article 0 or waiving any Default or Event of
Default in respect thereof;
(vi) changing the definition of "Majority Lenders",
"Supermajority Lenders," "Pro Rata Share" or "Borrowing
Base";
(vii) changing any provision contained in this Section
0;
(viii) releasing any obligor under any Loan
Document or any Collateral, unless such release is otherwise
required or permitted by the terms of this Agreement; or
(ix) consent to assignment by Borrower of all of its
duties and Obligations hereunder pursuant to Section 0;
(x) permitting the term of any Letter of Credit to
extend beyond the Termination Date;
provided, further, any amendment, waiver or modification of the
provisions of Article 0 (other than subsections (a), (b), (e), (f)
and (g) of Section 0) may be made without the consent of the
Borrower. Agent agrees to provide Borrower with notice of any
such amendment, waiver or modification; provided, however, that
the failure to give such notice shall not invalidate such
amendment, waiver or modification.
No amendment, modification, termination or waiver of any
provision of Article 0 or any other provision referring to Agent
shall be effective without the written concurrence of Agent, but
only if such amendment, modification, termination or waiver alters
the obligations or rights of Agent. Any waiver or consent shall
be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower
70
to any other further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section 9.5 shall be
binding on each assignee, transferee or recipient of Agent's or
any Lender's Commitment under this Agreement or the Advances at
the time outstanding.
SECTION 9.6 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their
respective successors and assigns, except that Borrower may not
assign or otherwise transfer any of its rights under this
Agreement without the prior written consent of all Lenders.
(b) Any Lender may, in accordance with applicable law, at
any time sell to one or more banks or other institutions (each a
"Participant") participating interests in any Advances owing to
such Lender, the Note held by such Lender, the Commitment held by
such Lender hereunder or any other interests of such Lender
hereunder. Borrower agrees that each Participant shall be
entitled to the benefits of Sections 0, 0 and 0 hereof with
respect to its participation; provided that no Participant shall
be entitled to receive any greater amount pursuant to such Section
than such Lender would have been entitled to receive in respect of
the amount of the participation transferred by such Lender to such
Participant had no such transfer occurred. In no event shall a
Lender that sells a participation be obligated to the Participant
to take or refrain from taking any action hereunder, under such
Lender's Note or in respect of such Lender's Commitment except
that such Lender may agree that it will not, without the consent
of the Participant, agree to (i) the increase or extension of the
term, or the extension of the time or waiver of any requirement
for the reduction or termination, of such Lender's Commitment,
(ii) the extension of any date fixed for the payment of principal
of or interest on the related Loan or Loans or any portion of any
fees payable to the Participant, (iii) the reduction of any
payment of principal thereof, or (iv) the reduction of the rate at
which either interest is payable thereon to a level below the rate
at which the Participant is entitled to receive interest in
respect of such participation.
(c) Each Lender may at any time assign, pursuant to an
assignment substantially in the form of Exhibit H attached hereto
and incorporated herein by reference, with (unless such assignment
is to an existing Lender or to an Affiliate of any such Lender)
the consent of the Agent and the Borrower (not to be unreasonably
withheld) to one or more banks or other institutions (in either
case, an "Assignee") all or any part of any Advances owing to such
Lender, the Note held by such Lender, the Commitment held by such
Lender or any other interest of such Lender hereunder; provided,
however, that (i) each such assignment by a Lender shall be made
in such manner so that the same portion of its Advances, Note and
Commitment is assigned to the Assignee and (ii) unless Borrower
and the Agent consent otherwise, and except in the case of an
assignment to another Lender, any partial assignment of a Lender's
Commitment shall be in a minimum principal amount of
$10,000,000.00, and (iii) at all times prior to its resignation or
replacement, Agent's Commitment shall be equal to or greater than
the Commitment of each other Lender. Without restricting the
right of Borrower or Agent to reasonably object to any bank or
financial institutional becoming an assignee of an interest of a
Lender hereunder, each proposed assignee must be an existing
Lender or a bank or financial institution which (i) has (or, in
the case of a bank which is a subsidiary, such bank's parent has)
a rating of its senior debt obligations of not less than Baa-1 by
Xxxxx'x Investors Services, Inc. or a comparable rating by a
rating agency acceptable to Agent and (ii) has total assets in
excess of $10,000,000,000.00. Borrower and the Lenders agree
that, to the extent of any assignment, the Assignee
71
shall be deemed to have the same rights and benefits with
respect to Borrower under this Agreement and the Notes as it would
have had if it were a Lender hereunder on the date hereof with
respect to its Pro Rata Share and the assigning Lender shall be
released from its Commitment hereunder, to the extent of such
assignment. Upon the making of an assignment, the assigning
Lender shall pay to the Agent an assignment fee of $2,500.
(d) In addition to the assignments and participations
permitted under the foregoing provisions of this Section 0, any
Lender may assign and pledge all or any portion of its Advances
and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such
Federal Reserve Bank. No such assignment shall release the
assigning Lender from its obligations hereunder.
(e) Borrower authorizes each Lender to disclose to any
Participant or Assignee ("Transferee") and any prospective
Transferee any and all financial information in such Lender's
possession concerning Borrower which has been delivered to such
Lender by Borrower or the Agent pursuant to this Agreement or
which has been delivered to such Lender by Borrower in connection
with such Lender's credit evaluation of Borrower prior to entering
into this Agreement.
(f) Any Lender, at such Lender's sole cost and expense,
shall be entitled to have the Note held by it subdivided in
connection with a permitted assignment of all or any portion of
such Note and the respective Advances evidenced thereby pursuant
to Section 9.6(c) above. Any Lender, which by reason of an
assignment pursuant to Section 9.6(c) hereof or otherwise, has or
would have more than one (1) Note hereunder shall be entitled to
have such Notes consolidated into a single Note. In the case of
any such subdivision or consolidation, the new Note (the "New
Note") issued in exchange for a Note or Notes (the "Old Note(s)")
previously issued hereunder (i) shall be substantially in the form
of Exhibit A hereto, as appropriate, (ii) shall be dated the date
of such assignment or of the most recent Note held by such Lender,
as the case may be, (iii) shall be otherwise duly completed and
(iv) shall bear a legend, to the effect that such New Note is
issued in exchange for such Old Note(s) and that the indebtedness
represented by such Old Note(s) shall not have been extinguished
by reason of such exchange.
(g) Borrower will use reasonable efforts to cooperate with
Agent and Lenders in connection with the assignment of interests
under this Agreement or the sale of participations herein.
SECTION 9.7 Capital Adequacy. If, after the date hereof,
any Lender shall have determined that either (i) the adoption or
implementation of any applicable law, rule, regulation or
guideline of general applicability regarding capital adequacy, or
any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank
or comparable agency charged with the interpretation or
administration thereof, or (ii) compliance by such Lender (or any
lending office of such Lender) with any request or directive of
general applicability regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the
rate of return on such Lender's capital as a consequence of its or
Borrower's obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, implementation,
change or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, within ten
(10) days after demand by such Lender, which demands shall include
a calculation and a reference to the applicable law, rule or
regulation, Borrower shall pay to such Lender such additional
amount of
72
amounts as will adequately compensate such Lender for such
reduction. Such Lender will use good faith and reasonable efforts
to designate a different lending office for such Lender's Advances
if such designation will avoid the need for, or reduce the amount
of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender. Each Lender shall
notify the Agent and the Borrower of any event occurring after the
date of this Agreement entitling such Lender to compensation under
this Section 0 within 45 days, after such Lender obtains actual
knowledge thereof; provided that if any Lender fails to give such
notice within 45 days after it obtains actual knowledge of such an
event, such Lender shall, with respect to compensation payable
pursuant to this Section 0 in respect of any costs resulting from
such event, only be entitled to payment for costs incurred from
and after the date 45 days prior to the date that such Lender
gives such notice. A certificate of such Lender claiming
compensation under this Section 0 and setting forth the additional
amount of amounts to be paid to it hereunder, together with the
description of the manner in which such amounts have been
calculated, shall be conclusive in the absence of manifest error.
In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
SECTION 9.8 Counterparts. This Agreement may be signed in
any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were
upon the same instrument.
SECTION 9.9 Notice of Final Agreement. THIS AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS
BETWEEN THE PARTIES.
SECTION 9.10 Invalid Provisions. Any provision of any
Loan Document held by a court of competent jurisdiction to be
illegal, invalid or unenforceable shall not invalidate the
remaining provisions of such Loan Document which shall remain in
full force and effect and the effect thereof shall be confined to
the provision held invalid or illegal.
SECTION 9.11 Maximum Rate. Regardless of any provision
contained in any of the Loan Documents, Lenders shall never be
entitled to receive, collect or apply as interest (whether termed
interest herein or deemed to be interest by operation of law or
judicial determination) on the Obligations any amount in excess of
interest calculated at the Maximum Rate, and, in the event that
any Lender ever receives, collects or applies as interest any such
excess, the amount which would be excessive interest shall be
deemed to be a partial prepayment of principal and treated
hereunder as such; and, if the principal amount of the Obligations
are paid in full, any remaining excess shall forthwith be paid to
Borrower. In determining whether or not the interest paid or
payable under any specific contingency exceeds interest calculated
at the Maximum Rate, Borrower and Lenders shall, to the maximum
extent permitted under applicable law, (i) characterize any non-principal
payment as an expense, fee or premium rather than as
interest; (ii) exclude voluntary prepayments and the effects
thereof; and (iii) amortize, prorate, allocate and spread, in
equal parts, the total amount of interest throughout the entire
contemplated term of the Obligations; provided that, if the
Obligations are paid and performed in full prior to the end of the
full contemplated term thereof, and if the interest received for
the actual period of existence thereof exceeds interest calculated
at the Maximum Rate, Lenders shall refund to Borrower the amount
of such excess or credit the amount of such excess against the
principal amount of the Obligations and, in such event, Lenders
shall not be subject to any penalties provided by any laws for
contracting for, charging, taking, reserving or receiving interest
in excess of interest calculated at the Maximum Rate.
73
SECTION 9.12 Limitation Upon Liability. Subject to the
exceptions and qualifications described below, CBL Properties,
Inc., Borrower's sole general partner, its successors and assigns
(the "General Partner"), shall not be personally liable for the
payment of the Obligations. Notwithstanding the foregoing
provisions of this paragraph: (a) if an Event of Default occurs,
nothing hereinabove stated shall in any way prevent or hinder the
Agent or the Lenders in the enforcement or foreclosure of the
Liens now or at any time hereafter securing the payment of the
Obligations, or in the pursuit or enforcement of any remedy or
judgment against Borrower and its assets; and (b) the General
Partner shall be fully liable to the Agent and the Lenders to the
same extent that the General Partner would be liable absent the
foregoing provisions of this Section 0: (i) for fraud or willful
misrepresentation by the General Partner or its Affiliates (to the
full extent of losses suffered by the Agent or any Lender by
reason of such fraud or willful misrepresentations); (ii) for the
retention of any rental income or other income in excess of
operating expenses of the property arising with respect to the
property covered by any Loan Document and collected by Borrower
after the Agent has given Borrower any notice that Borrower is in
default under any of the Loan Documents and that the Agent and the
Lenders have exercised their option to accelerate the maturity of
the Obligations, foreclose or require the foreclosure of the Liens
securing payment thereof or exercise any of the other rights,
remedies and recourses of the Agent or the Lenders under the Loan
Documents (to the full extent of the rental income or other income
in excess of such operating expenses collected by Borrower after
the giving of any such notice); (iii) for the fair market value,
as of the time of the giving of any notice referred to in (ii)
above, of any personalty or fixtures removed or disposed of by
Borrower (other than in accordance with the terms of the Mortgage
encumbering the same) after the giving of any notice referred to
in (ii) above; and (iv) for the misapplication by Borrower
(contrary to the provisions of this Agreement or the Loan
Documents) of (x) any proceeds paid under any insurance policy by
reason of damage, loss or destruction to any portion of the
Collateral or the Projects (to the full extent of such proceeds so
misapplied); or (y) any proceeds or awards resulting from the
condemnation of all or any part of the Collateral or Projects (to
the full extent of such proceeds or awards so misapplied). No
subsequent owner of the Collateral or the Projects shall be liable
under the foregoing clause (b) for the acts and omissions of any
prior owner, provided such subsequent owner and any partner
therein or other party thereto is not an Affiliate of such prior
owner or any partner therein or other party thereto, and further
provided that the Agent and the Majority Lenders have given their
prior written approval to the transfer of such Collateral or
Projects to such subsequent owner, if such approval is required
under the Loan Documents.
SECTION 9.13 Course of Dealing. Borrower and Lenders
mutually agree that each shall proceed at all times in good faith
and in a commercially reasonable manner in the performance of its
obligations and in the exercise of its judgment or discretion
hereunder and under the other loan documents.
SECTION 9.14 Treatment of Certain Information;
Confidentiality.
(a) Borrower acknowledges that from time to time
financial advisory, investment banking and other services may be
offered or provided to Borrower or one or more of its Subsidiaries
(in connection with this Agreement or otherwise) by any Lender or
by one or more Subsidiaries or Affiliates of such Lender and
Borrower hereby authorizes each Lender to share any information
delivered to such Lender by Borrower and its Subsidiaries pursuant
to this Agreement, or in connection with the decision of such
Lender to enter into this Agreement, to any such Subsidiary or
74
Affiliate, it being understood that any such Subsidiary or
Affiliate receiving such information shall be bound by the
provisions of clause (b) below as if it were a Lender hereunder.
(b) Each Lender agrees (on behalf of itself and each
of its Affiliates, directors, officers, employees and
representatives) to keep confidential, in accordance with their
customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices,
any non-public information supplied to it by Borrower pursuant to
this Agreement which is identified by Borrower as being
confidential at the time the same is delivered to the Lenders,
provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for any of the
Lenders, (iii) to bank examiners, auditors or accountants, (iv) to
any other Lender, (v) in connection with any litigation to which
any one or more of the Lenders is a party (provided, that each
such Lender will promptly notify Borrower of such litigation and
of such proposed disclosure prior to the disclosure of such
information (unless prohibited from doing so by the relevant
court)) or (vi) to any Transferee (or prospective Transferee) so
long as such Transferee (or prospective Transferee) first executes
and delivers to the respective Lender a Confidentiality Agreement
containing substantially the term of this Section 0.
SECTION 9.15 Conflict of Terms. In the event of a
conflict between the terms and provisions of this Agreement and
the terms and provisions of any of the other Loan Documents, the
terms of this Agreement shall govern; provided, however, that any
term or provision of any Collateral Document applicable to the
Collateral shall be deemed to be supplemental to, and not in
conflict with, the terms and provisions of this Agreement.
SECTION 9.16 Governing Law; Submission to Jurisdiction.
THIS AGREEMENT AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA. BORROWER HEREBY
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA AND OF ANY
GEORGIA STATE COURT SITTING IN ATLANTA, GEORGIA FOR PURPOSES OF
ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY. BORROWER
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM
THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
SECTION 9.17 Waiver of Right to Trial by Jury. EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL
BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
(1) ARISING UNDER THIS AGREEMENT, ANY NOTE OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION THEREWITH, OR (2) IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO THIS AGREEMENT, ANY NOTE OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH
75
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
________________
Initials
SECTION 9.18 Amendment and Restatement. This Agreement constitutes
an amendment to and a restatement in the entirety of the Original Credit
Agreement, and the obligations set forth therein, as amended and restated
hereby, continue in full force and effect. This Agreement is not and shall
not be deemed to constitute a novation of the underlying obligations. The
Original Credit Agreement shall govern the relationship of the parties and
the Loan through the date preceding the Effective Date; from and after the
Effective Date, this Agreement shall govern and control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
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"Borrower"
CBL & ASSOCIATES LIMITED PARTNERSHIP
By: CBL & Associates Properties, Inc.,
as General Partner
/s/ Xxxx X. Xxx
By:____________________
Name Xxxx X. Xxx
Title: Ececutive Vice President
/s/ Xxxx Xxxxx
Attest:_______________________
Name Xxxx Xxxxx
Assistant Secretary
Address for Notices:
CBL & Associates Limited Partnership
c/o CBL & Associates Properties, Inc.
Xxx Xxxx Xxxxx
0000 Xxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: President
Telecopy Number: (000) 000-0000
with a copy to:
CBL & Associates Properties, Inc.
One Park Place
0000 Xxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx Xxx Xxxxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
(Signatures continued on next page)
77
(Signatures continued from previous page)
"Lenders"
Commitment:
$30,000,000 XXXXX FARGO BANK, N.A., as successor in
interest to Xxxxx Fargo Realty Advisors
Funding, Incorporated
/s/ Xxxxxx X. Xxxxxx
By: ______________________________
Xxxxxx X. Xxxxxx
Name:_________________________
Title:____Senior Vice President
Xxxxx Fargo Bank, N.A.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Loan Administration Manager
Telecopy Number: (000) 000-0000
with copies to:
Xxxxx Fargo Bank, N.A.
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxx
Telecopy Number: (000) 000-0000
Xxxxx Fargo Bank, N.A.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telecopy Number: (000) 000-0000
Xxxxxxxx Xxxxxxx LLP
Suite 5200
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Telecopy Number: (000) 000-0000
(Signatures continued on next page)
78
(Signatures continued from previous page)
Commitment:
$15,000,000 NATIONSBANK, N.A. (SOUTH), successor by
merger to NationsBank of Georgia, N.A.
/s/ Xxxxx X. Xxxxxxx
By: ______________________________
Xxxxx X. Xxxxxxx
Name:_________________________
Title:__Senior Vice President
NationsBank, N.A. (South)
NationsBank Plaza
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Commercial Real Estate Department
Telecopy Number: (000) 000-0000
Commitment:
$25,000,000 FIRST BANK NATIONAL ASSOCIATION
/s/ Xxxxxxx X. Xxxxxx
By: ______________________________
Xxxxxxx X. Xxxxxx
Name:_________________________
Title:______Vice President
First Bank National Association
First Bank Place
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Real Estate Banking Division
Telecopy Number: (000) 000-0000
(Signatures continued on next page)
79
(Signatures continued from previous page)
Commitment:
$15,000,000 UNION BANK OF SWITZERLAND
(NEW YORK BRANCH)
/s/ Xxxxxx Xxxx
By: ______________________________
Xxxxxx Xxxx
Name:_________________________
Title:___Vice President
Union Bank of Switzerland
(New York Branch)
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxx
Telecopy Number: (000) 000-0000
"Agent"
XXXXX FARGO BANK, N.A., as successor in
interest to Xxxxx Fargo Realty Advisors Funding, Incorporated, as Agent
/s/ Xxxxxx X. Xxxxxx
By: ______________________________
Xxxxxx X. Xxxxxx
Name:_________________________
Title:____Senior Vice President
Xxxxx Fargo Bank, N.A.
0000 Xxxxx Xxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Loan Administration Manager
Telecopy Number: (000) 000-0000
with copies to:
Xxxxx Fargo Bank, N.A.
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxxxx Xxxxxx
Telecopy Number: (000) 000-0000
(Signatures continued on next page)
80
(Signatures continued from previous page)
Xxxxx Fargo Bank, N.A.
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
Telecopy Number: (000) 000-0000
Xxxxxxxx Xxxxxxx LLP
Suite 5200
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Telecopy Number: (000) 000-0000
81
EXHIBIT I
FORM OF EXTENSION REQUEST
______________ __, 199_
Xxxxx Fargo Bank, N.A.
0000 Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: ________________
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of September 26, 1996, (the "Credit Agreement"), by and among CBL
& Associates Limited Partnership (the "Borrower"), Xxxxx Fargo Bank, N.A.,
NationsBank, N.A. (South), First Bank National Association and Union Bank of
Switzerland (New York Branch) and their assignees under Section 9.6 thereof
("Lenders"), and Xxxxx Fargo Bank, N.A., as Agent (the "Agent"). Capitalized
terms used herein, and not otherwise defined herein, have their respective
meanings given them in the Credit Agreement.
Pursuant to Section 2.11 of the Credit Agreement, the Borrower hereby
requests that the Lenders and Agent extend the current Termination Date of
_____________ __, 199_ by a one-year period to _________________ __, 1999_.
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof (a) no Default or Event of Default has occurred and is
continuing, and (b) the representations and warranties of the Borrower
contained in the Credit Agreement and the other Loan Documents are true and
correct in all material respects, except to the extent such representations
or warranties specifically relate to an earlier date or such representations
or warranties become untrue by reason of events or conditions otherwise
permitted under the Credit Agreement or the other Loan Documents.
CBL & ASSOCIATES LIMITED
PARTNERSHIP
By: CBL & Associates
Properties, Inc., as
General Partner
By:_______________________________
Name: _____________________
Title: ____________________
Attest: __________________________
Name: _____________________
Title: ____________________
