LOAN AGREEMENT

Exhibit  10.25

LOAN AGREEMENT

between

MERIDIAN MALL LIMITED PARTNERSHIP, a Michigan limited partnership,

as Borrower

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Administrative Agent

and

THE FINANCIAL INSTITUTIONS NOW OR HEREAFTER SIGNATORIES HERETO AND THEIR ASSIGNEES PURSUANT TO SECTION 11.13, as Lenders

 

Entered into as of November _7_, 2008

 

WFB LOAN NO. 1000856

 

 

TABLE OF CONTENTS

Page

ARTICLE 1. DEFINITIONS............................................................................................................................................1

 

1.1

DEFINED TERMS................................................................................................................1

 

1.2

SCHEDULES AND EXHIBITS INCORPORATED................................................................................................................8

 

ARTICLE 2. LOAN....................................................................................................................................8

 

2.1

LOAN.

...............................................................................................................................8

 

2.2

LOAN FEES...........................................................................................................................9

 

2.3

LOAN DOCUMENTS..........................................................................................................9

 

2.4

EFFECTIVE DATE...............................................................................................................9

 

2.5

MATURITY DATE; OPTION TO EXTEND....................................................................9

 

2.6

INTEREST AND PRINCIPAL PAYMENTS ON THE LOAN........................................9

 

(a)

Interest Payments....................................................................................................10

 

(b)

Reserved...................................................................................................................10

 

(c)

Default Interest........................................................................................................10

 

(d)

Late Fee....................................................................................................................10

 

(e)

Computation of Interest.........................................................................................11

 

(f)

Effective Rate...........................................................................................................11

 

(g)

Selection of Fixed Rate...........................................................................................11

 

(h)

Fixed Rate Taxes, Regulatory Costs and Reserve Percentages.......................12

 

(i)

Fixed Rate Price Adjustment..................................................................................13

 

(j)

Purchase, Sale and Matching of Funds................................................................13

 

2.7

PAYMENTS.......................................................................................................................13

 

(a)

Manner and Time of Payment................................................................................13

 

(b)

Payments on Non-Business Days........................................................................13

 

(c)

Voluntary Prepayment............................................................................................14

 

2.8

FULL REPAYMENT AND RECONVEYANCE.............................................................14

 

2.9

LENDERS' ACCOUNTING..............................................................................................14

 

2.10

SECURED SWAP OBLIGATIONS................................................................................14

 

2.11

DEBT SERVICE COVERAGE RATIO & OCCUPANCY TEST..................................14

 

ARTICLE 3. DISBURSEMENT.............................................................................................................15

 

3.1

CONDITIONS PRECEDENT...........................................................................................15

 

3.2

ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT

 

AUTHORIZATION......................................................................................................15

 

3.3

LOAN DISBURSEMENTS..............................................................................................15

 

3.4

FUNDS TRANSFER DISBURSEMENTS......................................................................15

 

ARTICLE 4. INSURANCE....................................................................................................................16

 

4.1

TITLE INSURANCE........................................................................................................16

 

4.2

PROPERTY INSURANCE..............................................................................................16

 

4.3

FLOOD HAZARD INSURANCE..................................................................................17

 

4.4

LIABILITY INSURANCE..............................................................................................17

 

4.5

OTHER COVERAGE......................................................................................................17

 

4.6

GENERAL. ......................................................................................................................17

 

ARTICLE 5. REPRESENTATIONS AND WARRANTIES............................................................17

 

5.1

AUTHORITY/ENFORCEABILITY..............................................................................17

 

 

5.2

BINDING OBLIGATIONS...........................................................................................17

 

5.3

FORMATION AND ORGANIZATIONAL DOCUMENTS....................................17

 

5.4

NO VIOLATION...........................................................................................................18

 

5.5

COMPLIANCE WITH LAWS...................................................................................18

 

5.6

LITIGATION................................................................................................................18

 

5.7

FINANCIAL CONDITION.........................................................................................18

 

5.8

NO MATERIAL ADVERSE CHANGE.....................................................................18

 

5.9

ACCURACY................................................................................................................18

 

5.10

TAX LIABILITY........................................................................................................18

 

5.11

TITLE TO ASSETS; NO LIENS...............................................................................19

 

5.12

MANAGEMENT AGREEMENTS...........................................................................19

 

5.13

UTILITIES..................................................................................................................19

 

5.14

COMPLIANCE..........................................................................................................19

 

5.15

AMERICANS WITH DISABILITIES ACT COMPLIANCE...............................19

 

5.16

BUSINESS LOAN.....................................................................................................19

 

5.17

DEBTS TO AFFILIATES........................................................................................19

 

5.18

BANKRUPTCY/INSOLVENCY..............................................................................19

 

ARTICLE 6. HAZARDOUS MATERIALS..................................................................................19

 

6.1

SPECIAL REPRESENTATIONS AND WARRANTIES.......................................19

 

(a)

Hazardous Materials........................................................................................20

 

(b)

Hazardous Materials Laws.............................................................................20

 

(c)

Hazardous Materials Claims...........................................................................20

 

6.2

HAZARDOUS MATERIALS COVENANTS........................................................20

 

(a)

No Hazardous Activities................................................................................20

 

(b)

Compliance.......................................................................................................20

 

(c)

Notices..............................................................................................................20

 

(d)

Remedial Action..............................................................................................21

 

6.3

INSPECTION BY ADMINISTRATIVE AGENT...................................................21

 

6.4

HAZARDOUS MATERIALS INDEMNITY..........................................................21

 

ARTICLE 7. COVENANTS OF BORROWER.............................................................................21

 

7.1

EXPENSES.................................................................................................................21

 

7.2

ERISA COMPLIANCE.............................................................................................22

 

7.3

LEASING. 22

 

7.4

APPROVAL OF LEASES.........................................................................................22

 

7.5

INCOME TO BE APPLIED TO DEBT SERVICE..................................................22

 

7.6

SUBDIVISION MAPS..............................................................................................22

 

7.7

OPINION OF LEGAL COUNSEL............................................................................23

 

7.8

FURTHER ASSURANCES......................................................................................23

 

7.9

ASSIGNMENT..........................................................................................................23

 

7.10

MANAGEMENT OF PROPERTY.........................................................................23

 

7.11

REQUIREMENTS OF LAW..................................................................................23

 

7.12

SPECIAL COVENANTS; SINGLE PURPOSE ENTITY......................................23

 

7.13

LIMITATIONS ON DISTRIBUTIONS, ETC.......................................................24

 

7.14

DERIVATIVE DOCUMENTS................................................................................24

 

ARTICLE 8. REPORTING COVENANTS....................................................................................25

 

8.1

FINANCIAL INFORMATION................................................................................25

 

8.2

BOOKS AND RECORDS.........................................................................................25

 

8.3

REPORTS...................................................................................................................25

 

8.4

LEASING REPORTS.................................................................................................25

 

8.5

OPERATING STATEMENTS FOR PROPERTY...................................................25

 

 

8.6

KNOWLEDGE OF DEFAULT; ETC.......................................................................25

 

8.7

LITIGATION, ARBITRATION OR GOVERNMENT

 

INVESTIGATION..............................................................................................26

 

8.8

ENVIRONMENTAL NOTICES...............................................................................26

 

8.9

CERTIFICATE OF BORROWER............................................................................26

 

ARTICLE 9. DEFAULTS AND REMEDIES...............................................................................26

 

9.1

DEFAULT. ...............................................................................................................26

 

(a)

Monetary.........................................................................................................26

 

(b)

Performance of Obligations..........................................................................26

 

(c)

Use....................................................................................................................26

 

(d)

Liens, Attachment; Condemnation.............................................................27

 

(e)

Representations and Warranties.................................................................27

(f) Voluntary Bankruptcy; Insolvency; Dissolution...........................................27

(g)

Involuntary Bankruptcy...............................................................................27

 

(h)

Partners; Guarantors.....................................................................................27

 

(i)

Change in Management or Control............................................................27

 

(j)

Loss of Priority..............................................................................................27

 

(k)

Hazardous Materials....................................................................................28

 

(m)

Default Under Ground Lease....................................................................28

 

(n)

Swap Agreements........................................................................................28

 

9.2

ACCELERATION UPON DEFAULT; REMEDIES.................................................28

 

9.3

DISBURSEMENTS TO THIRD PARTIES............................................................28

 

9.4

REPAYMENT OF FUNDS ADVANCED.............................................................28

 

9.5

RIGHTS CUMULATIVE, NO WAIVER...............................................................29

 

ARTICLE 10. THE ADMINISTRATIVE AGENT; INTERCREDITOR PROVISIONS.........29

 

10.1

APPOINTMENT AND AUTHORIZATION......................................................29

 

10.2

WELLS FARGO AS LENDER..............................................................................30

 

10.3

LOAN DISBURSEMENT.....................................................................................30

10.4      DISTRIBUTION AND APPORTIONMENT OF PAYMENTS;

            DEFAULTING LENDERS......................................................................................31

10.5

PRO RATA TREATMENT..................................................................................32

 

10.6

SHARING OF PAYMENTS, ETC........................................................................32

 

10.7

COLLATERAL MATTERS; PROTECTIVE ADVANCES ..............................32

 

10.8

POST-FORECLOSURE PLANS...........................................................................33

 

10.9

APPROVALS OF LENDERS................................................................................34

 

10.10

NOTICE OF DEFAULTS.....................................................................................34

 

10.11

ADMINISTRATIVE AGENT'S RELIANCE, ETC............................................35

 

10.12

INDEMNIFICATION OF ADMINISTRATIVE AGENT................................35

 

10.13

LENDER CREDIT DECISION, ETC...................................................................36

 

10.14

SUCCESSOR ADMINISTRATIVE AGENT....................................................36

 

10.15

INTENTIONALLY DELETED...........................................................................37

 

10.16

NO SET-OFFS.....................................................................................................37

 

ARTICLE 11. MISCELLANEOUS PROVISIONS...................................................................37

 

11.1

INDEMNITY.........................................................................................................37

 

11.2

FORM OF DOCUMENTS...................................................................................38

 

11.3

NO THIRD PARTIES BENEFITED...................................................................38

 

11.4

NOTICES. ............................................................................................................38

 

11.5

ATTORNEY-IN-FACT.......................................................................................38

 

11.6

ACTIONS. ...........................................................................................................38

 

 

11.7

RIGHT OF CONTEST........................................................................................38

 

11.8

RELATIONSHIP OF PARTIES........................................................................38

 

11.9

DELAY OUTSIDE LENDER'S CONTROL......................................................39

 

11.10

ATTORNEYS' FEES AND EXPENSES; ENFORCEMENT..........................39

 

11.11

IMMEDIATELY AVAILABLE FUNDS.........................................................39

 

11.12

AMENDMENTS AND WAIVERS.................................................................39

 

(a)

Generally.....................................................................................................39

 

(b)

Unanimous Consent.................................................................................39

 

(c)

Amendment of Administrative Agent's Duties, Etc............................40

 

11.13

SUCCESSORS AND ASSIGNS......................................................................40

 

(a)

Generally....................................................................................................40

 

(b)

Participations............................................................................................41

 

(c)

Assignments.............................................................................................41

 

(d)

Tax Withholding......................................................................................41

 

(e)

Federal Reserve Bank Assignments.....................................................42

 

(f)

Information to Assignee, Etc.................................................................42

 

11.14

CAPITAL ADEQUACY.................................................................................42

 

11.15

INTENTIONALLY DELETED.......................................................................42

 

11.16

LENDER'S AGENTS.......................................................................................42

 

11.17

TAX SERVICE.................................................................................................42

 

11.18

WAIVER OF RIGHT TO TRIAL BY JURY.................................................43

 

11.19

SEVERABILITY..............................................................................................43

 

11.20

TIME.

..........................................................................................................43

 

11.21

HEADINGS.....................................................................................................43

 

11.22

GOVERNING LAW........................................................................................43

 

11.23

USA PATRIOT ACT NOTICE. COMPLIANCE........................................43

 

11.24

ELECTRONIC DOCUMENT DELIVERIES.................................................44

 

11.25

INTEGRATION; INTERPRETATION.........................................................44

 

11.26

JOINT AND SEVERAL LIABILITY.............................................................44

 

11.27

COUNTERPARTS...........................................................................................44

 

11.28

LIMITATION OF LIABILITY ON BORROWER'S DIRECTORS,

 

OFFICERS, ETC..........................................................................................44

 

11.29

LIMITATION OF LIABILITY OF BORROWER'S GENERAL

 

PARTNER..................................................................................................44

 

 

EXHIBITS AND SCHEDULES

 

SCHEDULE 1.1 - PRO RATA SHARES

SCHEDULE 5.5 - COMPLIANCE WITH LAWS DISCLOSURE

SCHEDULE 5.6 - LITIGATION DISCLOSURE

SCHEDULE 6.1 - ENVIRONMENTAL REPORTS

 

EXHIBIT A - DESCRIPTION OF PROPERTY

EXHIBIT B - DOCUMENTS

EXHIBIT C - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

EXHIBIT D - FORM OF PROMISSORY NOTE

EXHIBIT E - FIXED RATE NOTICE

EXHIBIT F - TRANSFER AUTHORIZER DESIGNATION

 

 

 

LOAN AGREEMENT

THIS LOAN AGREEMENT ("Agreement") dated as of November _7_, 2008 by and among MERIDIAN MALL LIMITED PARTNERSHIP, a limited partnership formed under the laws of the State of Michigan (" Borrower "), each of the financial institutions initially a signatory hereto together with their assignees under Section 11.13 (" Lenders "), and WELLS FARGO BANK, NATIONAL ASSOCIATION (" Wells Fargo ") as contractual representative of the Lenders to the extent and in the manner provided in Article 12 (in such capacity, the " Administrative Agent ").

R E C I T A L S

A.

Borrower owns or ground leases certain improved real property described in Exhibit A hereto and owns all improvements now or hereafter located thereon including the approximately 974,545 square foot regional mall known as Meridian Mall located at 1982 W. Grand River Avenue, Lansing (Okemos), Michigan (" Property ").

 

B.	Borrower has requested from Lenders a loan for the purpose of refinancing the Property.

NOW, THEREFORE, Borrower, Administrative Agent and Lenders agree as follows:

ARTICLE 1. DEFINITIONS

1.1        DEFINED TERMS. The following capitalized terms generally used in this Agreement shall have the meanings defined or referenced below. Certain other capitalized terms used only in specific sections of this Agreement are defined in such sections.

" Account " - means the account with Wells Fargo, if any, in the name of Borrower or Borrower's designee into which Loan proceeds will be deposited.

" ADA " - means the Americans with Disabilities Act, of July 26, 1990, Pub. L. No. 101-336, 104 Stat. 327, 42 U.S.C. § 12101, et seq., as amended from time to time.

" Administrative Agent " - means Wells Fargo Bank, National Association, or any successor Administrative Agent appointed pursuant to Section 10.14 .

“ Adjusted Operating Revenue ” shall mean an amount equal to the Gross Operating Revenue minus the following: (i) rental income received from month to month leases (but income received from license agreements for seasonal occupancy, such as the Christmas holiday season, is not required to be subtracted to obtain Adjusted Operating Revenue); (ii) for any tenant whose lease grants to such tenant a right to terminate because of such tenant’s economic performance or because of a failure to satisfy cotenancy requirements, rental income received from such tenant during any period in which the tenant has the right to terminate due to such economic performance or any period in which such cotenancy requirements are not being satisfied, as applicable; and (iii) any income from the sale of any portion of the Property.

" Affiliate " - means, with respect to any Person, (a) in the case of any such Person which is a partnership or limited liability company, any partner or member in such partnership or limited liability company, respectively, (b) any other Person which is directly or indirectly controlled by, controls or is under common control with such Person or one or more of the Persons referred to in the preceding clause (a), (c) any other Person who is an officer, director, trustee or employee of, or partner in, such Person or any Person referred to in the preceding clauses (a) and (b), (d) any other Person who is a member of the immediate family of such Person or of any Person referred to in the preceding clauses (a) through (c), and (e) any other Person that is a trust solely for the benefit of one or more Persons referred to in clause (d) and of which such Person is sole trustee; provided , however , in no event shall Lender or any of its Affiliates be an Affiliate of Borrower. For purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and

 

 

policies of a Person, whether through the ownership of voting securities or by contract or otherwise. The Affiliates of a Person shall include any officer or director of such Person. In no event shall the Administrative Agent or any Lender be deemed to be an Affiliate of the Borrower.

" Agreement " - shall have the meaning given to such term in the preamble hereto.

" Alternate Rate " - is a rate of interest per annum four percent (4%) in excess of the applicable Effective Rate in effect from time to time.

"Alternate Variable Rate" – is a rate of interest per annum equal to the Prime Rate plus 75/100 percent (0.75%).

 

" Anchor Occupants " – means J.C. Penney, Macy’s, Younkers for Her, and Younkers Men, Kids & Home.

 

" Applicable LIBO Rate " - is the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (.01%), equal to the sum of : (a) until the initial Maturity Date, three percent (3.0%) [and if the Loan is extended pursuant to Section 2.5 of this Agreement, thereafter three and one-half percent (3.5%)] plus (b) the LIBO Rate, which rate is divided by one (1.00) minus the Reserve Percentage:

Applicable LIBO Rate = 3.0% or 3.5%, as applicable	+	LIBO Rate
		(1 - Reserve Percentage)

 

" Appraisal " - means a written appraisal prepared by an independent MAI appraiser acceptable to Administrative Agent and subject to Administrative Agent's customary independent appraisal requirements and prepared in compliance with all applicable regulatory requirements, including the Financial Institutions Recovery, Reform and Enforcement Act of 1989, as amended from time to time.

" Assignee " - shall have the meaning given in Section 11.13(c) .

" Assignment and Assumption Agreement " - means an Assignment and Assumption Agreement among a Lender, an Assignee and the Administrative Agent, substantially in the form of Exhibit C .

" Bankruptcy Code " - means the Bankruptcy Reform Act of 1978 (11 USC § 101-1330) as now or hereafter amended or recodified.

" Borrower " - shall have the meaning given in the preamble hereto.

" Business Day " - means (a) any day of the week other than Saturday, Sunday or other day on which the offices of Administrative Agent in San Francisco, California are authorized or required to close and (b) with reference to the LIBO Rate, any such day that is also a day on which dealings in Dollar deposits are carried out in the London interbank market. Unless specifically referenced in this Agreement as a Business Day, all references to "days" shall be to calendar days.

" Collateral " - means the Property and any personal property or other collateral with respect to which a Lien or security interest was granted to Administrative Agent, for the benefit of Lenders, pursuant to the Loan Documents.

" Commitment " - means, as to each Lender, such Lender's obligation to make disbursements pursuant to Section 3.3 and Section 10.3 , in an amount up to, but not exceeding the amount set forth for such Lender on Schedule 1.1 attached hereto as such Lender's "Commitment Amount" or as set forth in the applicable Assignment and Assumption Agreement, as the same may be reduced from time to time pursuant to the terms of this Agreement or as appropriate to reflect any assignments to or by such Lender effected in accordance with Section 11.13 .

 

 

" Commitment Letter " – means that certain letter dated _ November 7 _, 2008, between Administrative Agent and CBL & Associates Properties, Inc.

"Daily LIBO Rate" means, the rate of interest, rounded up to the nearest whole multiple of one-hundredth of one percent (.01%), obtained by dividing (i) the rate of interest, rounded upward to the nearest whole multiple of one-sixteenth of one percent (0.0625%), quoted by the Administrative Agent from time to time as the London Inter-Bank Offered Rate for deposits in U.S. Dollars at approximately 9:00 a.m. Pacific time for a period of one month, as adjusted daily by Administrative Agent by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR loans is determined or any applicable category of extensions of credit or other assets which includes loans by an officer of any Lender outside of the United States of America). Any change in such maximum rate shall result in a change in Daily LIBO Rate on the date on which such change in such maximum rate becomes effective.

“ Debt Service Coverage Ratio ” - means the quotient of (i) Net Operating Income for the most recent four (4) fiscal quarters, divided by (ii) the aggregate principal and interest required to be paid during the upcoming twelve-month period in order to repay the then outstanding principal amount of the Loan in full, and to pay the amount of interest due at each installment, in equal monthly installments of principal and interest, based on a 360 month amortization, utilizing a rate of interest equal to the greater of (a) the actual interest rate on the Loan as of the Effective Date, (b) seven percent (7%), and (c) the rate most recently published as of the date of such calculation in the United States Federal Reserve Statistical Release (H.15) for 10 year Treasury Constant Maturities plus two percent (2%) (i.e., 200 basis points) per annum.

" Default " - shall have the meaning given to such term in Section 9.1 .

" 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) Business Days after notice from Administrative Agent.

" Dollars " and " $ " - means the lawful money of the United States of America.

" Effective Date " – shall have the meaning given in Section 2.4 .

" Effective Rate " - shall have the meaning given in Section 2.6(f) .

" Eligible Assignee " - means any Person that is: (a) an existing Lender; (b) a commercial bank, trust company, savings and loan association, savings bank, insurance company, investment bank or pension fund organized under the laws of the United States of America, any state thereof or the District of Columbia, and having total assets in excess of $5,000,000,000; or (c) a commercial bank organized under the laws of any other country which is a member of the Organization for Economic Co-operation and Development, or a political subdivision of any such country, and having total assets in excess of $10,000,000,000, provided that such bank is acting through a branch or agency located in the United States of America. If such entity is not currently a Lender, such entity's (or in the case of a bank which is a subsidiary, such bank's parent's) senior unsecured long term indebtedness must be rated BBB or higher by Standard & Poor's Ratings Services (a division of The McGraw-Hill Companies, Inc.), Baa2 or higher by Moody's Investor Service or the equivalent or higher of either such rating by another rating agency acceptable to the Administrative Agent.

" ERISA " - means the Employee Retirement Income Security Act of 1974, as in effect from time to time.

" Extended Maturity Date " - means November _ 7 _, 2011.

 

 

"Federal Funds Rate" means, for any period, a fluctuating interest rate per annum equal for each day during such period to the weighted average of the rates on overnight Federal Funds transactions with members of the Federal Reserve System arranged by Federal Funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing selected by the Administrative Agent.

" Fee Letter " – means that certain letter dated _ November 7 _, 2008, between Administrative Agent and CBL & Associates Properties, Inc.

" Fixed Rate " - is the Applicable LIBO Rate as accepted by Borrower as an Effective Rate for a particular Fixed Rate Period and Fixed Rate Portion.

" Fixed Rate Commencement Date " - means the date upon which the Fixed Rate Period commences.

" Fixed Rate Notice " - is a written notice in the form shown on Exhibit E hereto which requests a Fixed Rate for a particular Fixed Rate Period and Fixed Rate Portion.

" Fixed Rate Period " - is the period or periods of (a) one, two, or three months; or (b) any other period which ends at the Maturity Date, which periods are selected by Borrower and confirmed in a Fixed Rate Notice; provided that no Fixed Rate Period shall extend beyond the Maturity Date.

" Fixed Rate Portion " - is the portion or portions of the principal balance of the Loan which Borrower selects to have subject to a Fixed Rate, each of which is an amount: (a) equal to all or a portion of the unpaid principal balance of the Loan not already subject to a Fixed Rate; and (b) is not less than ONE HUNDRED THOUSAND AND NO/100 DOLLARS ($100,000.00). In the event Borrower is subject to a principal amortization schedule under the terms and conditions of the Loan Documents, the Fixed Rate Portion(s) from time to time in effect shall in no event exceed, in the aggregate, the maximum outstanding principal balance which will be permissible on the last day of the Fixed Rate Period selected.

" Fixed Rate Price Adjustment " - shall have the meaning set forth in Section 2.6(h) .

" Fixed Rate Taxes " - are, collectively, all withholdings, interest equalization taxes, stamp taxes or other taxes (except income and franchise taxes) imposed by any domestic or foreign Governmental Authority and related in any manner to a Fixed Rate.

"" Funding Date " - shall have the meaning set forth in Section 10.3(b) .

" Governmental Authority " - means any nation or government, any federal, state, local, municipal or other political subdivision thereof or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

" Gross Operating Revenue " - shall mean the sum of any and all amounts, payments, fees, rentals, additional rentals, sponsorship income, expense reimbursements (including, without limitation, all reimbursements by tenants, lessees, licensees and other users of the Property) discounts or credits to Borrower, income, interest and other monies directly or indirectly received by or on behalf of or credited to Borrower from any person with respect to Borrower's ownership, use, development, operation, leasing, franchising, marketing or licensing of the Property, including, without limitation, from parking operations. Gross Operating Revenue shall be computed on a cash basis and shall include for each quarterly statement all amounts actually received in such quarter whether or not such amounts are attributable to a charge arising in such quarter.

" Ground Lease " or " Ground Leases " – means either individually or collectively, as may be indicated by the context, any one or more of those ground lease agreements described in Exhibit A-1 of the Mortgage.

 

 

" Guarantor " – means collectively, CBL & Associates Limited Partnership, a Delaware limited partnership, and CBL & Associates Properties, Inc., a Delaware corporation, and any other person or entity who, or which, in any manner, is or becomes obligated to Lenders under any guaranty now or hereafter executed in connection with respect to the Loan (collectively or severally as the context thereof may suggest or require).

" Hazardous Materials " - shall have the meaning given to such term in Section 6.1(a) .

" Hazardous Materials Claims " - shall have the meaning given to such term in Section 6.1(c) .

" Hazardous Materials Laws " - shall have the meaning given to such term in Section 6.1(b) .

" Independent Inspecting Architect " - The architect, engineer, agent, consultant or other inspector selected and retained by Administrative Agent, at Borrower's expense, to inspect the work on behalf of the Administrative Agent and the Lenders.

" Junior Anchor Occupants " – means Dick’s Sporting Goods, Bed Bath & Beyond and Schuler Books.

" Lender " - means each financial institution from time to time party hereto as a "Lender", together with its respective successors and permitted assigns. With respect to matters requiring the consent or approval of all Lenders at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and, for voting purposes only, "all Lenders" shall be deemed to mean "all Lenders other than Defaulting Lenders".

" LIBO Rate " - is the rate of interest, rounded upward to the nearest whole multiple of one-hundredth of one percent (.01%), quoted by Administrative Agent from time to time as the London Inter-Bank Offered Rate for deposits in U.S. Dollars at approximately 9:00 a.m. California time, two (2) Business Days prior to a Fixed Rate Commencement Date or a Price Adjustment Date, as appropriate, for purposes of calculating effective rates of interest for loans or obligations making reference thereto for an amount approximately equal to a Fixed Rate Portion and for a period of time approximately equal to a Fixed Rate Period or the time remaining in a Fixed Rate Period after a Price Adjustment Date, as appropriate.

" Lien " - means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance (including, but not limited to, easements, rights-of-way, zoning restrictions and the like), lien (statutory or other), preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever, including without limitation any conditional sale or other title retention agreement, the interest of a lessor under a capital lease, any financing lease having substantially the same economic effect as any of the foregoing, and the filing of any financing statement or document having similar effect (other than a financing statement filed by a "true" lessor pursuant to Section 9408 (or a successor section) of the Uniform Commercial Code) naming the owner of the asset to which such Lien relates as debtor, under the Uniform Commercial Code or other comparable law of any jurisdiction.

" Loan " - means the principal sum that Lenders agree to lend and Borrower agrees to borrow pursuant to the terms and conditions of this Agreement: FORTY MILLION AND NO/100 DOLLARS ($40,000,000.00).

" Loan Documents " - means those documents, as hereafter amended, supplemented, replaced or modified, properly executed and in recordable form, if necessary, listed in Exhibit B as Loan Documents.

" Loan Party " - means Borrower, Guarantor, and any other person or entity obligated under the Loan Documents or Other Related Documents.

" Mall Shop Space " – means all retail space in the Property that is not occupied by the Anchor Occupants and the Junior Anchor Occupants.

 

 

" Maturity Date " - means November _ 7 _, 2010.

" Mortgage " - means the Mortgage of even date herewith executed by Borrower, as Mortgagor, in favor of Administrative Agent, for the benefit of Lenders, as Mortgagee, as hereafter amended, supplemented, replaced or modified.

“ Net Operating Income ” - means the Adjusted Operating Revenue for the immediately preceding four fiscal quarters minus the Permitted Operating Expenses for the immediately preceding four fiscal quarters.

" Non-Pro Rata Advance " - shall mean a Protective Advance or a disbursement under the Loan with respect to which fewer than all Lenders have funded their respective Pro Rata Shares in breach of their obligations under this Agreement.

" Note " or " Notes " - means each Promissory Note Secured by Mortgage, collectively in the original principal amount of the Loan, executed by Borrower and payable to the order of a Lender, together with such other replacement notes as may be issued from time to time pursuant to Section 11.13 , as hereafter amended, supplemented, replaced or modified.

" Operating Agreement " - shall have the meaning given to such term in the Mortgage.

" Operating Statement " - shall have the meaning given to such term in Section 8.5 .

" Other Related Documents " - means those documents, as hereafter amended, supplemented, replaced or modified from time to time, properly executed and in recordable form, if necessary, listed in Exhibit B as Other Related Documents.

" Participant " - shall have the meaning given to such term in Section 11.13 .

" Permit " - means any permit, approval, authorization, license, variance or permission required from a Governmental Authority under an applicable Requirement of Law.

" Permitted Lease " - shall have the meaning given to such term in Section 7.4 .

" Permitted Liens " - means:

(a)

Liens (other than environmental Liens and any Lien imposed under ERISA) for taxes, assessments or charges of any Governmental Authority for claims not yet due;

 

(b)

any laws, ordinances or regulations affecting the Property;

 

(c)

Liens imposed by laws, such as mechanics' liens and other similar liens, arising in the ordinary course of business which secure payment of obligations not more than thirty (30) days past due;

 

(d)

All matters shown on the Title Policy as exceptions to Lender's coverage thereunder; and

 

(e)

Liens in favor of Administrative Agent, for the benefit of Lenders, under the Mortgage.

" Permitted Operating Expenses " - shall mean an amount equal to the actual cash basis expenditures made by Borrower for the following expenses but only to the extent that such expenses are reasonable in amount and customary for properties of this type: (i) taxes and assessments imposed upon the Property to the extent that such taxes and assessments are required to be paid by Borrower and are actually paid or reserved for by Borrower; (ii) bond assessments; (iii) insurance premiums for casualty insurance (including, without limitation, earthquake and terrorism coverage) and liability insurance carried in connection with the Property, provided, however, if any, insurance is maintained as part of a blanket policy covering the Property and other properties, the insurance premium included in this subparagraph shall be the premium fairly allocable to the Property; (iv) project reserves of $0.20 per rentable square

 

 

foot of space in the Property; (v) a management fee equal to the greater of management fees actually incurred or three percent (3%) of Adjusted Operating Revenue; and (vi) other operating expenses incurred by Borrower for the management, operation, cleaning, leasing, maintenance and repair of the Property. Permitted Operating Expenses shall not include any interest or principal payments on the Loan or any allowance for depreciation.

" Person " - means any natural person, corporation, limited partnership, general partnership, joint stock company, limited liability company, limited liability partnership, joint venture, association, company, trust, bank, trust company, land trust, business trust or other organization, whether or not a legal entity, or any other nongovernmental entity, or any Governmental Authority.

" Potential Default " - means an event, circumstance or condition which, with the giving of notice or the lapse of time, or both, would constitute a Default.

" Price Adjustment Date " - shall have the meaning set forth in Section 2.6(h) .

" Prime Rate " - means a base rate of interest which Administrative Agent establishes from time to time and which serves as the basis upon which the effective rates of interest are calculated for those loans making reference thereto. Any change in an effective rate due to a change in the Prime Rate shall become effective on the day each such change is announced by Administrative Agent at its principal office in San Francisco, California.

" Property " - shall have the meaning given to such term in Recital A .

" Pro Rata Share " - means, as to each Lender, the ratio, expressed as a percentage, of (a) the amount of such Lender's Commitment to (b) the aggregate amount of the Commitments of all Lenders hereunder; provided , however , that if at the time of determination the Commitments have terminated or been reduced to zero, the "Pro Rata Share" of each Lender shall be the Pro Rata Share of such Lender in effect immediately prior to such termination or reduction.

" Protective Advance " - shall mean any advances made by Administrative Agent in accordance with the provisions of Section 10.7(e) to protect the Collateral securing the Loan.

" Reference Date " - shall have the meaning given in Section 2.11 .

" Regulatory Costs " - are, collectively, future, supplemental, emergency or other changes in Reserve Percentages, assessment rates imposed by the Federal Deposit Insurance Corporation, or similar requirements or costs imposed by any domestic or foreign Governmental Authority and related in any manner to a Fixed Rate.

" Requirements of Law " - means, as to any entity, the charter and by-laws, partnership agreement or other organizational or governing documents of such entity, and any law, rule or regulation, Permit, or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such entity or any of its property or to which such entity or any of its property is subject, including without limitation, applicable securities laws and any certificate of occupancy, zoning ordinance, building, environmental or land use requirement or Permit or occupational safety or health law, rule or regulation.

" Requisite Lenders " - means, as of any date, Lenders (which must include the Lender then acting as Administrative Agent) having at least 51% of the aggregate amount of the Commitments, or, if the Commitments have been terminated or reduced to zero, Lenders holding at least 51% of the principal amount outstanding under the Loan, provided that in determining such percentage at any given time, all then existing Defaulting Lenders will be disregarded and excluded and the Pro Rata Shares of the Loan of Lenders shall be redetermined, for voting purposes only, to exclude the Pro Rata Shares of the Loan of such Defaulting Lenders.

 

 

" Reserve Percentage " - is at any time the percentage announced by Administrative Agent as the reserve percentage under Regulation D for loans and obligations making reference to an Applicable LIBO Rate for a Fixed Rate Period or time remaining in a Fixed Rate Period on a Price Adjustment Date, as appropriate. The Reserve Percentage shall be based on Regulation D or other regulations from time to time in effect concerning reserves for Eurocurrency Liabilities as defined in Regulation D from related institutions as though Administrative Agent were in a net borrowing position, as promulgated by the Board of Governors of the Federal Reserve System, or its successor.

“ Secured Swap Obligations" - means all liabilities of Borrower under any Swap Agreement.

" Subdivision Map " - shall have the meaning given to such term in Section 7.6 .

" Swap Agreement " means (a) any transaction (including any master agreement, confirmation or other agreement with respect to any such transaction) now existing or hereafter entered into by the Borrower with any party which at the time such transaction is entered into is then a Lender or is an affiliate of a party which is then a Lender (i) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred to in clause (i) above that is currently, or in the future becomes, recurrently entered into in the financial markets (including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made, and (b) any combination of these transactions.

" Title Policy " - means the ALTA Lender's Policy of Title Insurance as issued by First American Title Insurance Company.

“ Unsecured Agreement ” – means the Unsecured Term Loan Agreement dated as of April 22, 2008, between CBL & Associates Limited Partnership, CBL & Associates Properties, Inc., Wells Fargo Bank, National Association, as Administrative Agent and Lead Arranger, Aareal Capital Corporation, as Syndication Agent, and the financial institutions a party thereto and their assignees.

"Variable Rate" means the Daily LIBO Rate; provided, that if for any reason the Daily LIBO Rate is unavailable, the Variable Rate shall be the Alternate Variable Rate.

 

" Wells Fargo " - shall have the meaning given to such term in the preamble hereto.

 

1.2        SCHEDULES AND EXHIBITS INCORPORATED . Schedules   1.1 , 5.5 , 5.6 and 6.1 , and Exhibits   A , B , C , D , E and F , all attached hereto, are hereby incorporated into this Agreement.

ARTICLE 2. LOAN

2.1        LOAN. Subject to the terms of this Agreement, Lenders agree to lend to Borrower, and Borrower agrees to borrow from Lenders, the principal sum of FORTY MILLION AND NO/100 DOLLARS ($40,000,000.00), said sum to be evidenced by the Notes. The Notes shall be secured, in part, by the Mortgage encumbering certain real property and improvements as legally defined therein. Amounts disbursed to or on behalf of Borrower pursuant to the Notes shall be used to refinance the Property and for such other purposes and uses as may be permitted under this Agreement and the other Loan Documents.

 

 

2.2        LOAN FEES.     (a) Borrower shall pay to Administrative Agent, at Loan closing, a loan fee as set forth in the Fee Letter. Additionally, Borrower shall pay to Administrative Agent, for the sole benefit of Administrative Agent, certain other fees, each in the amount and at the times as set forth in the Fee Letter.

(b) If, pursuant to Section 2.5 of this Agreement, Borrower exercises its right to extend the Maturity Date, the Borrower agrees to pay to the Administrative Agent for the benefit of the Lenders an extension fee equal to one-half of one percent (0.50%) (i.e. fifty [50] basis points) of the amount of the outstanding principal balance of the Note on the Maturity Date. Such fee shall be paid to the Administrative Agent prior to, and as a condition to, such extension.

2.3        LOAN DOCUMENTS. Borrower shall execute and deliver to Administrative Agent (or cause to be executed and delivered) concurrently with this Agreement each of the documents, properly executed and in recordable form, as applicable, described in Exhibit B as Loan Documents, together with those documents described in Exhibit B as Other Related Documents.

2.4        EFFECTIVE DATE. The date of the Loan Documents is for reference purposes only. The “Effective Date” of the Loan Documents shall be the earlier of the date and time the initial proceeds of the Loan are advanced to Borrower or the date and time the Mortgage is recorded in the Office of the County Recorder of the county where the Property is located.

2.5  MATURITY DATE; OPTION TO EXTEND. (a)  All sums due and owing under this Agreement and the other Loan Documents shall be repaid in full on or before the Maturity Date. All payments due to Administrative Agent and Lenders under this Agreement, whether at the Maturity Date or otherwise, shall be paid in Dollars in immediately available funds.

(b)  Borrower shall have the option to extend the term of the Loan (the “Option to Extend”) from the Maturity Date to the Extended Maturity Date, upon receipt of written notice from Borrower of Borrower’s request to exercise the Option to Extend, which notice shall be provided to Administrative Agent not more than 120 days but not less than 60 days prior to the Maturity Date, and upon satisfaction of each of the following conditions precedent:

(i)

As of the date of Borrower’s delivery of notice of request to exercise the Option to Extend, and as of the Maturity Date, no Default shall have occurred and be continuing, and no event or condition which, with the giving of notice or the passage of time or both, would constitute a Default shall have occurred and be continuing, and Borrower shall so certify in writing;

 

(ii)

Borrower shall execute or cause the execution of all documents reasonably required by Administrative Agent to exercise the Option to Extend and shall deliver to Administrative Agent, at Borrower’s sole cost and expense, such title insurance endorsements reasonably required by Administrative Agent;

 

(iii)

There shall have occurred no material adverse change, as determined by Administrative Agent in its sole discretion, in the financial condition of Borrower or any Guarantor from that which existed as of the later of: (A) the Effective Date; or (B) the date upon which the financial condition of such party was first represented to Administrative Agent;

 

(iv)

As of the date of Borrower’s delivery of notice of request to exercise the Option to Extend, and as of the Maturity Date, (A) not fewer than three (3) of the Anchor Occupants shall be open and operating for business in the same space such Anchor Occupants occupied on the Effective Date and (B) not less than seventy percent (70%) of the Mall Shop Space

 

 

shall be open and operating for business and leased to and occupied by tenants who are paying rent;

(v)

The Debt Service Coverage Ratio for the Property is greater than or equal to 3.00 (Borrower having the right to pay down the outstanding principal balance of the Loan so that said test may be met.).

 

(vi)

At Administrative Agent’s option, an Appraisal at Borrower’s expense confirming to the satisfaction of Administrative Agent that the Loan amount as a percentage of the fair market value of the Property (after adjustment for senior liens and regular and special tax assessments) as of the Maturity Date does not exceed thirty-five percent (35%) (“Loan-to-Value Percentage”) (Borrower having the right to pay down the outstanding principal balance of the Loan so that said test may be met.). The valuation date of such appraisal shall be within sixty (60) days of the Maturity Date;

 

(vii)

The Borrower shall have paid the Fees payable under Section 2.2(b).

 

2.6

INTEREST AND PRINCIPAL PAYMENTS ON THE LOAN .

(a)         Interest Payments . Interest accrued on the outstanding principal balance of the Loan shall be due and payable, in the manner provided in Section 2.7 , on the first day of each month commencing with the first month after the Effective Date.

(b)

Reserved .

(c)         Default Interest . Notwithstanding the rates of interest specified in Sections 2.6(e) below and the payment dates specified in Section 2.6(a) , at Requisite Lenders’ discretion at any time following the occurrence and during the continuance of any Default, the principal balance of the Loan then outstanding and, to the extent permitted by applicable law, any interest payments on the Loan not paid when due, shall bear interest payable upon demand at the Alternate Rate. All other amounts due Administrative Agent or Lenders (whether directly or for reimbursement) under this Agreement or any of the other Loan Documents if not paid when due, or if no time period is expressed, if not paid within ten (10) days after demand, shall likewise, at the option of Requisite Lenders, bear interest from and after demand at the Alternate Rate.

(d)         Late Fee . Borrower acknowledges that late payment to Administrative Agent will cause Administrative Agent and Lenders to incur costs not contemplated by this Agreement. Such costs include, without limitation, processing and accounting charges. Therefore, if Borrower fails timely to pay any sum due and payable hereunder through the Maturity Date (other than payment of the entire outstanding balance of the Loan on the Maturity Date), unless waived by Administrative Agent, a late charge of three cents ($.03) for each dollar of any such principal payment, interest or other charge due hereon and which is not paid within fifteen (15) days after such payment is due, shall be charged by Administrative Agent (for the benefit of Lenders) and paid by Borrower for the purpose of defraying the expense incident to handling such delinquent payment. Borrower and Administrative 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 Administrative Agent and Lenders will incur by reason of late payment. Borrower and Administrative 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, and shall not prevent Administrative 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 Administrative Agent.

(e)         Computation of Interest . Interest shall be computed on the basis of the actual number of days elapsed in the period during which interest or fees accrue and a year of three hundred sixty (360) days on the principal balance of the Loan outstanding from time to time. In computing interest

 

 

on the Loan, the date of the making of a disbursement under the Loan shall be included and the date of payment shall be excluded. Notwithstanding any provision in this Section 2.6 , interest in respect of the Loan shall not exceed the maximum rate permitted by applicable law.

(f)         Effective Rate . Provided no Default exists under this Agreement, the "Effective Rate" upon which interest shall be calculated for the Loan shall, from and after the Effective Date of this Agreement, be one or more of the following:

(i)

for those portions of the principal balance of the Notes which are not Fixed Rate Portions, the Effective Rate shall be the Variable Rate.

 

(ii)

for those portions of the principal balance of the Notes which are Fixed Rate Portions, the Effective Rate for the Fixed Rate Period thereof shall be the Fixed Rate selected by Borrower and set in accordance with the provisions hereof, provided , however , if any of the transactions necessary for the calculation of interest at any Fixed Rate requested or selected by Borrower should be or become prohibited or unavailable to Administrative Agent, or, if in Administrative Agent 's good faith judgment, it is not possible or practical for Administrative Agent to set a Fixed Rate for a Fixed Rate Portion and Fixed Rate Period as requested or selected by Borrower, the Effective Rate for such Fixed Rate Portion shall remain at or revert to the Variable Rate.

Notwithstanding the foregoing to the contrary, during such time as a Default exists under this Agreement; or from and after the date on which all sums owing under the Notes become due and payable by acceleration or otherwise; or from and after the date on which the Collateral or any portion thereof or interest therein, is sold, transferred, mortgaged, assigned, or encumbered, whether voluntarily or involuntarily, or by operation of law or otherwise, without Administrative Agent's prior written consent (whether or not the sums owing under the Notes become due and payable by acceleration); or from and after the Maturity Date, then at the option of Requisite Lenders in each case, the interest rate applicable to the then outstanding principal balance of the Loan shall be the Alternate Rate.

(g)         Selection of Fixed Rate . Provided no Default or Potential Default exists under this Agreement, Borrower, at its option and upon satisfaction of the conditions set forth herein, may request a Fixed Rate as the Effective Rate for calculating interest on the portion of the unpaid principal balance and for the period selected in accordance with and subject to the following procedures and conditions, provided , however , that Borrower may not have in effect at any one time more than five (5) Fixed Rates:

(i)

Borrower shall deliver to the Minneapolis Loan Center of Administrative Agent, 733 Marquette Avenue, 10 th Floor, Minneapolis, Minnesota 55402, with a copy to: Administrative Agent, Real Estate Group, 2859 Paces Ferry Road, Suite 1200, Atlanta, Georgia 30339, Attention: Loan Administration Manager, or such other addresses as Administrative Agent shall designate, an original or facsimile Fixed Rate Notice no later than 9:00 A.M. (Minnesota time), and not less than three (3) nor more than five (5) Business Days prior to the proposed Fixed Rate Period for each Fixed Rate Portion. Any Fixed Rate Notice pursuant to this subsection (i) is irrevocable.

Administrative Agent is authorized to rely upon the telephonic request and acceptance of Charles W.A. Willett, Jr. or Farzana K. Mitchell, in their respective positions as Senior Vice President of the general partner of Borrower, as Borrower's duly authorized agents, or such additional authorized agents as Borrower shall designate in writing to Administrative Agent. Borrower's telephonic notices, requests and acceptances shall be directed to such officers of Administrative Agent as Administrative Agent may from time to time designate.

 

 

(ii)

Borrower may elect (A) to convert Variable Rate advances to a Fixed Rate Portion, or (B) to convert a matured Fixed Rate Portion into a new Fixed Rate Portion, provided , however , that the aggregate amount of the advance being converted into or continued as a Fixed Rate Portion shall comply with the definition thereof as to Dollar amount. The conversion of a matured Fixed Rate Portion back to a Variable Rate or to a new Fixed Rate Portion shall occur on the last Business Day of the Fixed Rate Period relating to such Fixed Rate Portion. Each Fixed Rate Notice shall specify (A) the amount of the Fixed Rate Portion, (B) the Fixed Rate Period, and (C) the Fixed Rate Commencement Date.

 

(iii)

Upon receipt of a Fixed Rate Notice in the proper form requesting a Fixed Rate Portion advance under subsections (i) and (ii) above, Administrative Agent shall determine the Fixed Rate applicable to the Fixed Rate Period for such Fixed Rate Portion two (2) Business Days prior to the beginning of such Fixed Rate Period. Each determination by Administrative Agent of the Fixed Rate shall be conclusive and binding upon the parties hereto in the absence of manifest error. Administrative Agent shall deliver to Borrower and each Lender (by facsimile) an acknowledgment of receipt and confirmation of the Fixed Rate Notice; provided , however , that failure to provide such acknowledgment of receipt and confirmation of the Fixed Rate Notice to Borrower or any Lender shall not affect the validity of such rate.

 

(iv)

If Borrower does not make a timely election to convert all or a portion of a matured Fixed Rate Portion into a new Fixed Rate Portion in accordance with this Section 2.6(f) above, such Fixed Rate Portion shall be automatically, on the last day of the current Fixed Rate period therefor, be continued as a Fixed Rate Portion having a Fixed Rate Period of one (1) month.

(h)         Fixed Rate Taxes, Regulatory Costs and Reserve Percentages . Upon Administrative Agent's demand, Borrower shall pay to Administrative Agent for the account of each Lender, in addition to all other amounts which may be, or become, due and payable under this Agreement and the other Loan Documents, any and all Fixed Rate Taxes and Regulatory Costs, to the extent they are not internalized by calculation of a Fixed Rate. Further, at Administrative Agent's option, the Fixed Rate shall be automatically adjusted by adjusting the Reserve Percentage, as determined by Administrative Agent in its prudent banking judgment, from the date of imposition (or subsequent date selected by Administrative Agent) of any such Regulatory Costs. Administrative Agent shall give Borrower notice of any Fixed Rate Taxes and Regulatory Costs as soon as practicable after their occurrence, but Borrower shall be liable for any Fixed Rate Taxes and Regulatory Costs regardless of whether or when notice is so given

(i)          Fixed Rate Price Adjustment . Borrower acknowledges that prepayment or acceleration of a Fixed Rate Portion during a Fixed Rate Period shall result in Lenders' incurring additional costs, expenses and/or liabilities and that it is extremely difficult and impractical to ascertain the extent of such costs, expenses and/or liabilities. Therefore, on the date a Fixed Rate Portion is prepaid or the date all sums payable hereunder become due and payable, by acceleration or otherwise (" Price Adjustment Date "), Borrower will pay Administrative Agent, for the account of each Lender (in addition to all other sums then owing to Lenders) an amount (" Fixed Rate Price Adjustment ") equal to the then present value of (i) the amount of interest that would have accrued on the Fixed Rate Portion for the remainder of the Fixed Rate Period at the Fixed Rate set on the Fixed Rate Commencement Date, less (ii) the amount of interest that would accrue on the same Fixed Rate Portion for the same period if the Fixed Rate were set on the Price Adjustment Date at the Applicable LIBO Rate in effect on the Price Adjustment Date. The present value shall be calculated by the Administrative Agent, for the benefit of the Lenders, using as a discount rate the LIBO Rate quoted on the Price Adjustment Date.

 

 

By initialing this provision where indicated below, Borrower confirms that Lenders' agreement to make the Loan at the interest rates and on the other terms set forth herein and in the other Loan Documents constitutes adequate and valuable consideration, given individual weight by Borrower, for this agreement

Borrower Initials.

____ JNF ____

(j)          Purchase, Sale and Matching of Funds . Borrower understands, agrees and acknowledges the following: (a) Lenders have no obligation to purchase, sell and/or match funds in connection with the use of a LIBO Rate as a basis for calculating a Fixed Rate or Fixed Rate Price Adjustment; (b) a LIBO Rate is used merely as a reference in determining a Fixed Rate and Fixed Rate Price Adjustment; and (c) Borrower has accepted a LIBO Rate as a reasonable and fair basis for calculating a Fixed Rate and a Fixed Rate Price Adjustment. Borrower further agrees to pay the Fixed Rate Price Adjustment, Fixed Rate Taxes and Regulatory Costs, if any, whether or not any Lender elects to purchase, sell and/or match funds.

2.7

PAYMENTS .

(a)        Manner and Time of Payment. All payments of principal, interest and fees hereunder payable to Administrative Agent or the Lenders shall be made without condition or reservation of right and free of set-off or counterclaim, in Dollars and by wire transfer (pursuant to Administrative Agent's written wire transfer instructions) of immediately available funds, to Administrative Agent, for the account of each Lender as applicable, not later than 11:00 A.M. (San Francisco time) on the date due; and funds received by Administrative Agent after that time and date shall be deemed to have been paid on the next succeeding Business Day.

(b)        Payments on Non-Business Days. Whenever any payment to be made by Borrower hereunder shall be stated to be due on a day which is not a Business Day, payments shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest hereunder and of any fees due under this Agreement, as the case may be.

(c)        Voluntary Prepayment. Borrower may, upon not less than three (3) Business Days' prior written notice to Administrative Agent not later than 11:00 A.M. (San Francisco time) on the date given, at any time and from time to time, prepay all or any portion of the Loan without penalty, except as otherwise expressly set forth in this Section 2.8(c) . Any notice of prepayment given to Administrative Agent under this Section 2.8(c) shall specify the date of prepayment and the principal amount of the prepayment. In the event of a prepayment of any Fixed Rate Portion, Borrower shall concurrently pay any Fixed Rate Price Adjustment payable in respect thereof. Any principal balance reduction shall reduce Lenders' Commitment by a like amount, and any such amounts repaid by Borrower may not be reborrowed. Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, but subject to Section 2.12 of this Agreement, during the period beginning on the Effective Date and ending on November __, 2009, Borrower may not prepay any portion of the Loan, and during the period between November ___, 2009 and April 30, 2010, Borrower may prepay all or any portion of the Loan upon payment of a prepayment fee equal to 25/100 percent (0.25%) of the principal amount of the prepayment.

2.8        FULL REPAYMENT AND RECONVEYANCE. Upon receipt of all sums owing and outstanding under the Loan Documents, Administrative Agent shall issue a full reconveyance of the Property from the lien of the Mortgage; provided , however , that all of the following conditions shall be satisfied at the time of, and with respect to, such reconveyance: (a) Administrative Agent, for the benefit of Lenders, shall have received all escrow, closing and recording costs, the costs of preparing and delivering such reconveyance and any sums then due and payable under the Loan Documents; and (b) Administrative Agent shall have received a written release satisfactory to Administrative Agent of any set aside letter, letter of credit or other form of undertaking which Administrative Agent or any Lender has issued to any surety, Governmental Authority or any other party in connection with the Loan and/or the Property. Lenders' obligations to make further disbursements under the Loan shall terminate as to any portion of

 

 

the Loan undisbursed as of the date of issuance of such full release or reconveyance, and any commitment of Lenders to lend any undisbursed portion of the Loan shall be canceled.

2.9        LENDERS' ACCOUNTING. Administrative Agent shall maintain a loan account (the " Loan Account ") on its books in which shall be recorded (a) the names and addresses and the Pro Rata Shares of the commitment of each of the Lenders, and principal amount of the Loan owing to each Lender from time to time, and (b) all repayments of principal and payments of accrued interest, as well as payments of fees required to be paid pursuant to this Agreement. All entries in the Loan Account shall be made in accordance with Administrative Agent's customary accounting practices as in effect from time to time. Monthly or at such other interval as is customary with Administrative Agent's practice, Administrative Agent will render a statement of the Loan Account to Borrower and will deliver a copy thereof to each Lender. Each such statement shall be deemed final, binding and conclusive upon Borrower in all respects as to all matters reflected therein (absent manifest error).

2.10      SECURED SWAP OBLIGATIONS. Lenders agree that the Mortgage shall secure the payment of the Loan and the payment of Borrower's obligations under any Secured Swap Obligations on a pari passu basis.

2.11      DEBT SERVICE COVERAGE RATIO AND OCCUPANCY TEST. As of November __, 2009 (the “ Reference Date ”), the Debt Service Coverage Ratio for the Property must be greater than or equal to 3.00. If on the Reference Date, the Debt Service Coverage Ratio for the Property is less than 3.00, Borrower must within thirty (30) days after written demand from Administrative Agent pay down the outstanding principal balance of the Loan in an amount necessary to achieve the required Debt Service Coverage Ratio. Not later than three (3) Business Days following the Reference Date, Borrower must deliver satisfactory evidence to Administrative Agent that as of the Reference Date not less than seventy percent (70%) of the Mall Shop Space is open and operating for business and leased to and occupied by tenants who are paying rent (the "Occupancy Test"), provided, however, if Borrower fails the Occupancy Test on the Reference Date but delivers satisfactory evidence to Administrative Agent not later than forty-five (45) days after the Reference Date that the requirements of the Occupancy Test have been met, then the failure to meet the Occupancy Test on the Reference Date shall not constitute a Default under this Agreement.

ARTICLE 3. DISBURSEMENT

3.1        CONDITIONS PRECEDENT. Administrative Agent's and Lenders' obligation to make any disbursements or take any other action under the Loan Documents shall be subject at all times to satisfaction of each of the following conditions precedent (in addition to those set forth in any other applicable provision hereof):

(a)  There shall exist no Default or Potential Default, as defined in this Agreement, or Default as defined in any of the other Loan Documents or in the Other Related Documents; and

(b)  Administrative Agent shall have received all Loan Documents, other documents, instruments, policies, and forms of evidence or other materials reasonably requested by Administrative Agent or any Lender under the terms of this Agreement or any of the other Loan Documents; and

(c)  Administrative Agent shall have received from each Lender such Lender's Pro Rata Share of such disbursement.

3.2        ACCOUNT, PLEDGE AND ASSIGNMENT, AND DISBURSEMENT AUTHORIZATION. The proceeds of the Loan, when qualified for disbursement, shall be deposited into the Account or otherwise disbursed to or for the benefit or account of Borrower under the terms of this Agreement; provided , however , that any direct disbursements from the Loan which are made by means of wire transfer, shall be subject to the provisions of any funds transfer agreement which is identified in Exhibit B hereto. As additional security for Borrower's performance under the Loan Documents, Borrower hereby irrevocably pledges and assigns to Administrative Agent, for the benefit of Lenders, all monies at any time deposited in the Account.

 

 

3.3        LOAN DISBURSEMENTS. Subject to the conditions set forth in Section 3.1 , the proceeds of the Loan shall be disbursed in one (1) advance at closing. Such disbursement shall be held by Borrower in trust and applied by Borrower solely for the purposes for which the funds have been disbursed. Administrative Agent and Lenders have no obligation to monitor or determine Borrower's use or application of the disbursement.

3.4        FUNDS TRANSFER DISBURSEMENTS. Borrower hereby authorizes Administrative Agent, to disburse the proceeds of any Loan made by Lenders or any of their Affiliates pursuant to the Loan Documents as requested by an authorized representative of the Borrower to any of the accounts designated in the Transfer Authorizer Designation form. Borrower agrees to be bound by any transfer request: (i) authorized or transmitted by Borrower; or (ii) made in Borrower's name and accepted by Administrative Agent in good faith and in compliance with these transfer instructions, even if not properly authorized by Borrower. Borrower further agrees and acknowledges that Administrative Agent may rely solely on any bank routing number or identifying bank account number or name provided by Borrower to effect a wire of funds transfer even if the information provided by Borrower identifies a different bank or account holder than named by the Borrower. Administrative Agent is not obligated or required in any way to take any actions to detect errors in information provided by Borrower. If Administrative Agent takes any actions in an attempt to detect errors in the transmission or content of transfer requests or takes any actions in an attempt to detect unauthorized funds transfer requests, Borrower agrees that no matter how many times Administrative Agent takes these actions Administrative Agent will not in any situation be liable for failing to take or correctly perform these actions in the future and such actions shall not become any part of the transfer disbursement procedures authorized under this provision, the Loan Documents, or any agreement between Administrative Agent and Borrower. Borrower agrees to notify Administrative Agent of any errors in the transfer of any funds or of any unauthorized or improperly authorized transfer requests within fourteen (14) days after Administrative Agent's confirmation to Borrower of such transfer. Administrative Agent will, in its sole discretion, determine the funds transfer system and the means by which each transfer will be made. Administrative Agent, may delay or refuse to accept a funds transfer request if the transfer would: (a) violate the terms of this authorization, (b) require use of a bank unacceptable to Administrative Agent or any Lender or prohibited by government authority; (iii) cause Administrative Agent or any Lender to violate any Federal Reserve or other regulatory risk control program or guideline; or (iv) otherwise cause Administrative Agent or any Lender to violate any applicable law or regulation. Neither Administrative Agent nor any Lender shallbe liable to Borrower or any other parties for: (i) errors, acts or failures to act of others, including other entities, banks, communications carriers or clearinghouses, through which Borrower's transfers may be made or information received or transmitted, and no such entity shall be deemed an agent of Administrative Agent or any Lender, (ii) any loss, liability or delay caused by fires, earthquakes, wars, civil disturbances, power surges or failures, acts of government, labor disputes, failures in communications networks, legal constraints or other events beyond Administrative Agent or any Lender's control, or (iii) any special, consequential, indirect or punitive damages, whether or not (a) any claim for these damages is based on tort or contract or (b) Administrative Agent or any Lender or Borrower knew or should have known the likelihood of these damages in any situation. Neither Administrative Agent nor any Lender makes any representations or warranties other than those expressly made in this Agreement.

ARTICLE 4. INSURANCE

Borrower shall, while any obligation of Borrower or any Guarantor under any Loan Document remains outstanding, maintain at Borrower's sole expense, with licensed insurers approved by Administrative Agent, the following policies of insurance in form and substance satisfactory to Administrative Agent. Capitalized terms used in this Article shall have the same meaning as such terms are commonly and presently defined in the insurance industry.

4.1        TITLE INSURANCE. A Title Policy, together with any endorsements which Administrative Agent may reasonably require, insuring Administrative Agent, for the benefit of Lenders, in the principal amount of the Loan, of the validity and the priority of the lien of the Mortgage upon the Property, subject only to matters approved by Administrative Agent in writing. During the term of the Loan, Borrower shall deliver to Administrative Agent, within ten (10) days of Administrative Agent's written

 

 

 

request, such other endorsements to the Title Policy as Administrative Agent may reasonably require with respect to the Property.

4.2         PROPERTY INSURANCE. An All Risk/Special Form Hazard Insurance policy, including without limitation, theft coverage, terrorism coverage and such other coverages and endorsements as Administrative Agent may reasonably require, insuring Administrative Agent, for the benefit of Lenders against damage to the Property in an amount not less than 100% of the full replacement cost. Such coverage should adequately insure any and all Loan collateral, whether such collateral is onsite, stored offsite or otherwise. Administrative Agent, for the benefit of Lenders, shall be named on the policy as Mortgagee and named under a Lender's Loss Payable Endorsement(form #438BFU or equivalent).

4.3        FLOOD HAZARD INSURANCE. A policy of flood insurance, as required by applicable governmental regulations, or as deemed necessary by Administrative Agent (in its reasonable discretion), in an amount required by Administrative Agent, but in no event less than the amount sufficient to meet the requirements of applicable law and governmental regulation.

4.4        LIABILITY INSURANCE. A policy of Commercial General Liability insurance on an occurrence basis, with coverages and limits as reasonably required by Administrative Agent, insuring against liability for injury and/or death to any person and/or damage to any property occurring on the Property.

4.5        OTHER COVERAGE. Borrower shall provide to Administrative Agent evidence of such other reasonable insurance in such reasonable amounts as Administrative Agent may from time to time request against such other insurable hazards which at the time are commonly insured against for property similar to the subject Property located in or around the region in which the subject Property is located. Such coverage requirements may include but are not limited to coverage for earthquake, acts of terrorism, business income, delayed business income, rental loss, sink hole, soft costs, tenant improvement or environmental.

4.6        GENERAL. Borrower shall provide to Administrative Agent insurance certificates or other evidence of coverage in form acceptable to Administrative Agent, with coverage amounts, deductibles, limits and retentions as reasonably required by Administrative Agent. All insurance policies shall provide that the coverage shall not be cancelable or materially changed without 10 days prior written notice to Administrative Agent of any cancellation for nonpayment of premiums, and not less than 30 days prior written notice to Administrative Agent of any other cancellation or any modification (including a reduction in coverage). Administrative Agent, for the benefit of Lenders shall be named under a Lender's Loss Payable Endorsement (form #438BFU or equivalent) on all insurance policies which Borrower actually maintains with respect to the Property. All insurance policies shall be issued and maintained by insurers approved to do business in the state in which the Property is located and must have an A.M. Best Company financial rating and policyholder surplus reasonably acceptable to Administrative Agent.

ARTICLE 5. REPRESENTATIONS AND WARRANTIES

As a material inducement to Lenders' entry into this Agreement, Borrower represents and warrants to Administrative Agent and each Lender as of the Effective Date and continuing thereafter that:

5.1        AUTHORITY/ENFORCEABILITY. Borrower is in compliance with all Requirements of Law applicable to its organization, existence and transaction of business and has all necessary rights and powers to own, improve and operate the Property as contemplated by the Loan Documents.

5.2        BINDING OBLIGATIONS. Borrower is authorized to execute, deliver and perform its obligations under the Loan Documents, and such obligations shall be valid and binding obligations of Borrower.

5.3        FORMATION AND ORGANIZATIONAL DOCUMENTS. Borrower has delivered to Administrative Agent all formation and organizational documents of Borrower, of the partners, joint venturers or members of Borrower, if any, and of all guarantors of the Loan, if any, and all such formation and organizational documents remain in full force and effect and have not been amended or modified since

 

 

they were delivered to Lender. Borrower shall immediately provide Lender with copies of any amendments or modifications of the formation or organizational documents.

5.4        NO VIOLATION. Borrower's execution, delivery, and performance under the Loan Documents do not: (a) require any consent or approval not heretofore obtained under any partnership agreement, operating agreement, articles of incorporation, bylaws or other document; (b) violate any Requirements of Law applicable to the Borrower, Property or any other statute, law, regulation or ordinance or any order or ruling of any court or Governmental Authority; (c) conflict with, or constitute a breach or default or permit the acceleration of obligations under any agreement, contract, lease, or other document by which the Borrower or the Property is bound or regulated; or (d) violate any statute, law, regulation or ordinance, or any order of any court or Governmental Authority.

5.5        COMPLIANCE WITH LAWS. Except as disclosed on Schedule 5.5 attached hereto, to the best of Borrower’s knowledge, Borrower has all Permits and other permits, licenses, exemptions, and approvals necessary to construct, occupy, operate and market the Property. Subject to Schedule 5.5 attached hereto, Borrower at all times shall have obtained all Permits and other permits, licenses, exemptions, and approvals necessary to construct, occupy, operate and market the Property, and shall maintain in all material respects compliance with all Requirements of Law applicable to the Property and all other applicable statutes, laws, regulations and ordinances necessary for the transaction of its business. The Property is a legal parcel lawfully created in full compliance with all subdivision laws and ordinances.

5.6        LITIGATION. Except as disclosed on Schedule 5.6 attached hereto, there are no claims, actions, suits, or proceedings pending, or to Borrower's knowledge threatened, against Borrower or affecting the Property.

5.7        FINANCIAL CONDITION. All financial statements and information heretofore and hereafter delivered to Administrative Agent by Borrower, including, without limitation, information relating to the financial condition of Borrower, the Property, the partners, joint venturers or members of Borrower, and/or any Guarantors, fairly and accurately represent the financial condition of the subject thereof and have been prepared (except as noted therein) in accordance with generally accepted accounting principles consistently applied. Borrower acknowledges and agrees that Administrative Agent and Lenders may request and obtain additional information from third parties regarding any of the above, including, without limitation, credit reports.

5.8        NO MATERIAL ADVERSE CHANGE. There has been no material adverse change in the financial condition of Borrower and/or Guarantor since the dates of the latest financial statements furnished to Administrative Agent and, except as otherwise disclosed to Administrative Agent in writing, Borrower has not entered into any material transaction which is not disclosed in such financial statements.

5.9        ACCURACY. All reports, documents, instruments, information and forms of evidence delivered to Administrative Agent concerning the Loan or security for the Loan or required by the Loan Documents are accurate, correct and sufficiently complete to give Administrative Agent and Lenders true and accurate knowledge of their subject matter, and do not contain any misrepresentation or omission.

5.10      TAX LIABILITY. Borrower has filed all required federal, state, county and municipal tax returns and has paid all taxes and assessments owed and payable, and Borrower has no knowledge of any basis for any additional payment with respect to any such taxes and assessments.

5.11      TITLE TO ASSETS; NO LIENS. Borrower has good and indefeasible title to the Property, free and clear of all liens and encumbrances except Permitted Liens.

5.12      MANAGEMENT AGREEMENTS. Borrower is not a party or subject to any management agreement with respect to the Property, except for the Management Agreement between CBL & Associates Management, Inc., as "Property Manager," and Borrower, as "Owner", dated September 11, 2003.

 

 

5.13      UTILITIES. All utility services, including, without limitation, gas, water, sewage, electrical and telephone, necessary for the development and occupancy of the Property are available at or within the boundaries of the Property.

5.14      COMPLIANCE. Borrower is familiar with and in compliance with all Requirements of Law and Permits for the development and ownership of the Property and will at all times conform to and comply in all material respects with all Requirements of Law and Permits.

5.15      AMERICANS WITH DISABILITIES ACT COMPLIANCE . Borrower represents and warrants to Administrative Agent and the Lenders that the Property shall be hereafter maintained in compliance in all material respects with the requirements and regulations of the Americans With Disabilities Act, of July 26, 1990, Pub. L. No. 101-336, 104 Stat. 327, 42 U.S.C. § 12101, et seq ., as hereafter amended (the "ADA"). The lawsuit described in Schedule 5.6 attached hereto alleges that the Property is not in compliance with the ADA. At Administrative Agent's written request from time to time, Borrower shall provide Administrative Agent with written evidence of such compliance satisfactory to Administrative Agent. Borrower shall be solely responsible for all such ADA costs of compliance and reporting.

5.16      BUSINESS LOAN . The Loan is a business loan transaction in the stated amount solely for the purpose of carrying on the business of Borrower and none of the proceeds of the Loan will be used for the personal, family or agricultural purposes of the Borrower.

5.17      DEBTS TO AFFILIATES. Borrower is not obligated to any Affiliate for any indebtedness or other material obligation.

5.18      BANKRUPTCY/INSOLVENCY. Borrower and its general partner are solvent (as that term is defined in the Bankruptcy Code), are not bankrupt, and have no outstanding liens, suits, garnishments, bankruptcies or court actions which could render it or them insolvent (as that term is defined in the Bankruptcy Code).

ARTICLE 6. HAZARDOUS MATERIALS

6.1        SPECIAL REPRESENTATIONS AND WARRANTIES. Without in any way limiting the other representations and warranties set forth in this Agreement, and after reasonable investigation and inquiry, Borrower hereby specially represents and warrants to the best of Borrower's knowledge as of the date of this Agreement as follows:

(a)         Hazardous Materials . To the best of Borrower's knowledge after due inquiry, except as set forth in those certain reports listed on Schedule 6.1 attached hereto, the Property is not and has not been a site for the use, generation, manufacture, storage, treatment, release, threatened release, discharge, disposal, transportation or presence of any oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, hazardous wastes, toxic or contaminated substances or similar materials, including, without limitation, any substances which are "hazardous substances," "hazardous wastes," "hazardous materials," "toxic substances," "wastes," "regulated substances," "industrial solid wastes," or "pollutants" under the Hazardous Materials Laws, as described below, and/or other applicable environmental laws, ordinances and regulations (collectively, the " Hazardous Materials "). "Hazardous Materials" shall not include commercially reasonable amounts of such materials used in the ordinary course of construction or operation of the Property which are used and stored in accordance with all applicable environmental laws, ordinances and regulations.

(b)         Hazardous Materials Laws . To the best of Borrower's knowledge after due inquiry, the Property is in compliance with all laws, ordinances and regulations relating to Hazardous Materials (" Hazardous Materials Law s"), including, without limitation: the Clean Air Act, as amended, 42 U.S.C. Section 7401 et seq .; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251 et seq .; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. Section 6901 et seq .; the Comprehensive Environment Response, Compensation and Liability Act of 1980, as amended (including the Superfund Amendments and Reauthorization Act of 1986, " CERCLA "), 42 U.S.C. Section 9601 et seq .; the Toxic Substances Control Act, as amended, 15 U.S.C. Section 2601 et seq .; the Occupational

 

 

Safety and Health Act, as amended, 29 U.S.C. Section 651, the Emergency Planning and Community Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq .; the Mine Safety and Health Act of 1977, as amended, 30 U.S.C. Section 801 et seq .; the Safe Drinking Water Act, as amended, 42 U.S.C. Section 300f et seq .; and all comparable state and local laws, laws of other jurisdictions or orders and regulations.

(c)         Hazardous Materials Claims . To the best of Borrower's knowledge after due inquiry, there are no claims or actions (" Hazardous Materials Claims ") pending or threatened against Borrower, the Property by any Governmental Authority, governmental agency or by any other person or entity relating to Hazardous Materials or pursuant to the Hazardous Materials Laws.

6.2	HAZARDOUS MATERIALS COVENANTS. Borrower agrees as follows:

(a)         No Hazardous Activities . Borrower shall not cause or permit the Property to be used as a site for the use, generation, manufacture, storage, treatment, release, discharge, disposal, transportation or presence of any Hazardous Materials.

(b)         Compliance . Borrower shall comply and cause the Property to comply with all Hazardous Materials Laws.

(c)         Notices . Borrower shall immediately notify Administrative Agent in writing of: (i) the discovery of any Hazardous Materials on, under or about the Property; (ii) any knowledge by Borrower that the Property does not comply with any Hazardous Materials Laws; (iii) any Hazardous Materials Claims .

(d)         Remedial Action . In response to the presence of any Hazardous Materials on, under or about the Property, Borrower shall immediately take, at Borrower's sole expense, all remedial action required by any Hazardous Materials Laws or any judgment, consent decree, settlement or compromise in respect to any Hazardous Materials Claims.

6.3        INSPECTION BY ADMINISTRATIVE AGENT. Upon reasonable prior notice to Borrower, Administrative Agent, its employees and agents, may from time to time (whether before or after the commencement of a nonjudicial or judicial foreclosure proceeding) enter and inspect the Property for the purpose of determining the existence, location, nature and magnitude of any past or present release or threatened release of any Hazardous Materials into, onto, beneath or from the Property.

6.4        HAZARDOUS MATERIALS INDEMNITY. BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER, AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND EXPENSES) WHICH ADMINISTRATIVE AGENT AND/OR ANY LENDER MAY INCUR AS A DIRECT OR INDIRECT CONSEQUENCE OF THE USE, GENERATION, MANUFACTURE, STORAGE, DISPOSAL, THREATENED DISPOSAL, TRANSPORTATION OR PRESENCE OF HAZARDOUS MATERIALS IN, ON, UNDER OR ABOUT THE PROPERTY. BORROWER SHALL IMMEDIATELY PAY TO ADMINISTRATIVE AGENT AND/OR ANY LENDER, UPON DEMAND, ANY AMOUNTS OWING UNDER THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THE INDEBTEDNESS ARISES UNTIL PAID AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE OF THE LOAN. BORROWER'S DUTY AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD HARMLESS ADMINISTRATIVE AGENT AND EACH LENDER SHALL SURVIVE THE CANCELLATION OF THE NOTES AND THE RELEASE, RECONVEYANCE OR PARTIAL RECONVEYANCE OF THE MORTGAGE.

ARTICLE 7. COVENANTS OF BORROWER

7.1        EXPENSES. Borrower shall immediately pay Administrative Agent upon demand all costs and expenses incurred by Administrative Agent in connection with: (a) the preparation of this Agreement, all other Loan Documents and Other Related Documents contemplated hereby; (b) the administration of this Agreement, the other Loan Documents and Other Related Documents for the term of the Loan; and

 

 

(c) the enforcement or satisfaction by Administrative Agent or Lenders of any of Borrower's obligations under this Agreement, the other Loan Documents or the Other Related Documents. For all purposes of this Agreement, Administrative Agent's and Lenders' costs and expenses shall include, without limitation, all appraisal fees, cost engineering and inspection fees, legal fees and expenses, accounting fees, environmental consultant fees, auditor fees, UCC filing fees and/or UCC vendor fees, and the cost to Lenders of any title insurance premiums, title surveys, reconveyance and notary fees. Borrower recognizes and agrees that formal written Appraisals of the Property by a licensed independent appraiser may be required by Administrative Agent's or any Lender's internal procedures and/or federal regulatory reporting requirements on an annual and/or specialized basis and that Administrative Agent or Lenders' may, at their option, require inspection of the Property by an independent supervising architect and/or cost engineering specialist and/or Independent Inspecting Architect. If any of the services described above are provided by an employee of Administrative Agent, Administrative Agent's costs and expenses for such services shall be calculated in accordance with Administrative Agent's standard charge for such services.

7.2        ERISA COMPLIANCE. Borrower shall at all times comply with the provisions of ERISA with respect to any retirement or other employee benefit plan to which it is a party as employer, and as soon as possible after Borrower knows, or has reason to know, that any Reportable Event (as defined in ERISA) with respect to any such plan of Borrower has occurred, it shall furnish to Administrative Agent a written statement setting forth details as to such Reportable Event and the action, if any, which Borrower proposes to take with respect thereto, together with a copy of the notice of such Reportable Event furnished to the Pension Benefit Guaranty Corporation.

7.3        LEASING. Borrower shall use commercially reasonable efforts to maintain all leasable space in the Property leased at no less than fair market rental rates.

7.4        APPROVAL OF LEASES. All leases (and lease terminations, modifications or amendments) of all or any part of the Property shall: (a) in the case of any lease in excess of 15,000 rentable square feet, be upon terms and with tenants approved by Administrative Agent prior to Borrower's execution of any such lease; and (b) include estoppel, subordination, attornment and mortgagee protection provisions satisfactory to Administrative Agent (any such lease, a " Permitted Lease "). With respect to any lease requiring Administrative Agent’s consent, Administrative Agent shall either approve any lease request or provide comments as to why such lease is not acceptable within ten (10) Business Days