AMENDED AND RESTATED LOAN AGREEMENT

EXHIBIT 10.18.9

AMENDED AND RESTATED LOAN AGREEMENT

(This Amended and Restated Loan Agreement amends, restates, and replaces that certain Amended and Restated Loan Agreement dated as of April 30, 2008, among the undersigned Borrower, The Lakes Mall, LLC and Bank.)

 

THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") is made as of May 15, 2009, by and between CBL & ASSOCIATES LIMITED PARTNERSHIP , a Delaware limited partnership, whose address is CBL Center, Suite 500, 2030 Hamilton Place Boulevard, Chattanooga, Tennessee 37421-6000 ("Borrower") and FIRST TENNESSEE BANK NATIONAL ASSOCIATION , a national banking association organized and existing under the statutes of the United States of America, with a principal office at 701 Market Street, Chattanooga, Tennessee 37402 (hereinafter referred to as the "Bank").

Recitals of Fact

 

Borrower has requested that Bank commit to make loans and advances to it on a revolving credit basis in an amount not to exceed at any one time outstanding the aggregate principal sum of One Hundred Five Million Dollars ($105,000,000.00) for the purpose of providing working capital for pre-development expenses, development costs, equity investments, repayment of existing indebtedness, certain distributions to limited partners (as allowed herein), letters of credit and construction and for general corporate purposes. Bank has agreed to make certain portions of such loans and advances on the terms and conditions herein set forth. Manufacturers and Traders Trust Company, Compass Bank, Regions Bank and Branch Banking and Trust Company, all as participants in the Loan have previously agreed to make certain portions of such loan and advances on the terms and conditions previously set forth and now on the terms and conditions herein set forth.

This Loan Agreement is currently being amended to: (a) extend the maturity date two (2) years; (b) adjust certain covenants; and (c) add certain collateral located in Tennessee.

NOW, THEREFORE, incorporating the Recitals of Fact set forth above and in consideration of the mutual agreements herein contained, the parties agree as follows:

AGREEMENTS

SECTION 1: DEFINITIONS AND ACCOUNTING TERMS

1.1 Certain Defined Terms . For the purposes of this Loan Agreement, the following terms shall have the following meanings (such meanings to be applicable equally to both the singular and plural forms of such terms) unless the context otherwise requires:

 

"Adjusted Asset Value" means, as of a given date, the sum of EBITDA attributable to malls, power centers and all other assets for the trailing four (4) quarters most recently ended, divided by (iii) 7.75%. In determining Adjusted Asset Value:

(i)        EBITDA attributable to real estate properties acquired during the most recently ended fiscal quarter shall be disregarded;

(ii)       EBITDA attributable to real estate properties acquired before the most recently ended fiscal quarter but during the three (3) fiscal quarters preceding the most recently ended fiscal quarter shall be annualized, based upon the period beginning on the date of its acquisition through the measurement date;

(iii)      EBITDA attributable to Properties whose development was completed during such trailing four fiscal quarters shall be disregarded;

(iv)      EBITDA attributable to and Properties whose development was completed before such trailing four fiscal quarters but during any of the four (4) fiscal quarters preceding such trailing four (4) fiscal quarters, shall be annualized, based upon the period beginning on the first month after the first anniversary of its completion and ending on the measurement date;

(v)       EBITDA attributable to any Property which is currently under development shall be excluded;

(vi)      With respect to any Subsidiary that is not a Wholly Owned Subsidiary, only Borrower’s Ownership Share of EBITDA attributable to such Subsidiary shall be used when determining Adjusted Asset Value; and

(vii)     EBITDA shall be attributed to malls and power centers based on the ratio of (x) revenues less property operating expenses (to be determined exclusive of interest expense, depreciation and general and administrative expenses) of malls and power centers to (y) total revenues less total property operating expenses (similarly determined), such revenues and expenses to be determined on a basis and in a manner consistent with Parent’s method of reporting of segment information in the notes to its financial statements for the fiscal quarter ended March 31, 2009 as filed with the Securities and Exchange Commission, and otherwise in a manner reasonably acceptable to Bank.

In addition, in the case of any operating Property acquired in the immediately preceding period of twenty-four (24) consecutive months for a purchase price indicative of a capitalization rate of less than 7.0% EBITDA attributable to such Property shall be excluded from the determination of Adjusted Asset Value, if that particular operating Property is valued in Parent’s financial statements at its purchase price.

"Adjusted Loan Amount" means the lesser of (a) 65% of the Appraised Value the real estate and improvements described in the Mortgages; or (b) the Permanent Loan Estimate of all Collateral Properties; or (c) $105,000,000.00.

 

"Affiliate" means as to any Person, any other Person which, directly or indirectly, owns or controls, on an aggregate basis including all beneficial ownership and ownership or control as a trustee, guardian or other fiduciary, at least ten percent (10%) of the outstanding shares of Capital Stock or other ownership interest having ordinary voting power to elect a majority of the board of directors or other governing body (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have contingency) of such Person or at least ten percent (10%) of the partnership or other ownership interest of such Person; or which controls, is controlled by or is under common control with such Person. For the purposes of this definition, "control" means the possession, directly or indirectly, of the power to direct or cause the direction of management and policies, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding the foregoing, a pension fund, university or other endowment funds, mutual fund investment company or similar fund having a passive investment intent owning such a ten percent (10%) or greater interest in a Person shall not be deemed an Affiliate of such Person unless such pension, mutual, endowment or similar fund either (i) owns fifty percent (50%) or more of the Capital Stock or other ownership interest in such Person, or (ii) has the right or power to select one or more members of such Person's board of directors or other governing body.

"Agreement Date" means the date as of which this Loan Agreement is dated.

"Applicable Law" means, in respect of any Person, all provisions of statutes, rules, regulations and orders of any governmental authority applicable to such Person, and all orders and decrees of all courts and arbitrators in proceedings or actions in which the person in question is a party.

"Bank's Proportionate Share" means Bank's undivided participating interest in the Loan which shall be equal to Twenty Seven Million Five Hundred Thousand and NO/100 Dollars ($27,500,000.00).

"Base Rate" means the base commercial rate of interest established from time to time by Bank. The Base Rate existing as of the date hereof is three and twenty five hundredths percent (3.25%) per annum.

"Borrower" has the meaning set forth in the introductory paragraph hereof and shall include Borrower’s successors and permitted assigns.

"Borrowing Base" is the limitation on the aggregate Revolving Credit Loan indebtedness which may be outstanding at any time during the term of this Loan Agreement. The Borrowing Base will normally be calculated each July 1, January 1, April 1 and October 1 but shall be subject to recalculation upon the occurrence of any extraordinary event, such as the addition or release of any collateral, or an extraordinary event that materially affects the value of any collateral. The Borrowing Base will be an amount not to exceed the Adjusted Loan Amount.

"Borrowing Base Certificate" means a report certified by the controller or chief financial officer or Senior Vice President of Borrower, setting forth the calculations required to establish the Borrowing Base as of a specified date, all in form and detail reasonably satisfactory to Bank.

 

"Business Day" means a banking business day of Bank and which is also a day on which dealings are carried on in the interbank eurodollar market.

"Capital Stock" shall mean, as to any Person, any and all shares, interests, warrants, participations or other equivalents (however designated) of corporate stock of such Person.

"CBL Holdings I" means CBL Holdings I, Inc., a Delaware corporation and the sole general partner of Borrower, and shall include CBL Holdings I, its successors and permitted assigns.

"CBL Holdings II" means CBL Holdings II, Inc., a Delaware corporation and a limited partner of Borrower, and shall include CBL Holdings II, its successors and permitted assigns.

"CBL & Associates Management, Inc." means CBL & Associates Management, Inc., a Delaware corporation, and shall include CBL & Associates Management, Inc.’s successors and permitted assigns.

"CBL Mortgage" means the mortgages and/or deeds of trust with security agreements and assignments of rents and leases and related amendments executed by Borrower, Walnut Square Associates Limited Partnership, The Lakes Mall, LLC, CBL Morristown, Ltd., Citadel Mall DSG, LLC, Laredo/MDN II Limited Partnership, The Shoppes at Hamilton Place, LLC and/or any other entity related to or owned by Borrower and/or Parent and/or CBL Holdings I in favor of Bank covering their interest in the properties described in Exhibit "A," attached hereto and made a part hereof.

"Closing Date" means the date of this Loan Agreement set out in the first paragraph of this Loan Agreement.

"Collateral Document" means any Guaranty, the CBL Mortgage, any security deed, mortgage, deed of trust, assignment of leases and rents, any property management contract assignments, and any other security agreement, financing statement, or other document, instrument or agreement creating, evidencing or perfecting Bank’s Liens in any of the Collateral.

"Collateral Property" means the property described in the CBL Mortgage.

"Credit Agreement" means the Sixth Amended and Restated Credit Agreement dated as of February 28, 2003 among Borrower, Wells Fargo and others, as amended from time to time, including the amendment referred to as Sixth Amendment to Sixth Amended and Restated Credit Agreement dated on November 30, 2007.

"Debt Service" means, with respect to a Person and for a given period, the sum of the following: (a) such Person’s Interest Expense for such period; (b) regularly scheduled principal payments on Indebtedness of such Person made during such period, other than any balloon, bullet or similar principal payment payable on any Indebtedness of such Person which repays such Indebtedness in full; and (c) such Person’s Ownership Share of the amount of any payments of the type described in the immediately preceding clause (b) of Unconsolidated Affiliates of such Person.

 

 

“Default Rate” means the rate of interest described in the Note, which shall accrue at Bank’s option after the occurrence of an Event of Default which remains uncured after any applicable grace period.

"EBITDA" means, for any period, net income (loss) of Parent and its Subsidiaries determined on a consolidated basis for such period excluding the following amounts (but only to the extent included in determining net income (loss) for such period and without duplication):

 

(a)       depreciation and amortization expense and other non-cash charges for such period less depreciation and amortization expense allocable to minority interest in Subsidiaries of Borrower for such period;

 

(b)       interest expense for such period less interest expense allocable to minority interest in Subsidiaries of Borrower for such period;

 

(c)

minority interest in earnings of Borrower for such period;

 

(d)        (i) extraordinary or nonrecurring net gains or losses (other than gains or losses from the sale of outparcels of Properties) for such period and expense relating to the extinguishments of Indebtedness for such period, except as otherwise provided in clause (d)(ii) below) for such period; (ii) gains or losses from the sale of outparcels and non-operating Properties for such period (provided however, that the gains or losses from such sales of outparcels and non-operating Properties may not exceed five percent (5%) of EBITDA calculated prior to taking such gains or losses into account); and (iii) expense relating to the extinguishments of Indebtedness for such period;

 

(e)

net gains or losses on the disposal of discontinued operations for such period;

 

(f)       expenses incurred during such period with respect to any real estate project abandoned by Parent or any Subsidiary in such period;

 

(g)

income tax expense in respect of such period;

 

(h)      Parent’s Ownership Share of depreciation and amortization expense and other non-cash charges of Unconsolidated Affiliates of Parent for such period; and

 

(i)        Parent’s Ownership Share of interest expense of Unconsolidated Affiliates of Parent for such period; and

(j)        non-cash impairment charges as defined by Financial Accounting Standards Board (FASB) Statement 144 Accounting for the Impairment or Disposal of Long-Lived Assets .

"Effective Date," which definition is used and only applies within Section 7.12 hereof, means the date the Credit Agreement became effective in accordance with Section 4.1 thereof.

 

"Environmental Laws" means all applicable local, state or federal laws, rules or regulations pertaining to environmental regulation, contamination or cleanup, including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act of 1976 or any state lien or superlien or environmental cleanup statutes all as amended from time to time.

"Equity Interest" means, with respect to any Person, any share of Capital Stock of (or other ownership or profit interests in) such Person, any warrant, option or other right for the purchase or other acquisition from such Person of any share of Capital Stock of (or other ownership or profit interests in) such Person, any security convertible into or exchangeable for any share of Capital Stock of (or other ownership or profit interests in) such Person or warrant, right or option for the purchase or other acquisition from such Person of such shares (or such other interests), and any other ownership or profit interest in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, whether or not certificated and whether or not such share, warrant, option, right or other interest is authorized or otherwise existing on any date of determination.

"Equity Issuance" means any issuance or sale by a Person of any Equity Interest.

"Event of Default" has the meaning assigned to that phrase in Section 8.

"Extension of Credit" means, with respect to a Person, any of the following, whether secured or unsecured: (a) loans to such Person, including without limitation, lines of credit and mortgage loans; (b) bonds, debentures, notes and similar instruments issued by such Person; (c) reimbursement obligations of such Person under or in respect of any letter of credit; and (d) any of the foregoing of other Persons, the payment of which such Person Guaranteed or is otherwise recourse to such Person.

"GAAP" means United States generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity, including without limitation, the Securities and Exchange Commission, as may be approved by a significant segment of the accounting profession, which are applicable to the circumstances as of the date of determination.

"Gross Asset Value" means, at a given time, the sum (without duplication) of the following:

 

(a)

Adjusted Asset Value at such time;

 

(b)      all cash and cash equivalents of Parent and its Subsidiaries determined on a consolidated basis as of the end of the fiscal quarter most recently ended (excluding tenant deposits and other cash and cash equivalents the disposition of which is restricted in any way (other than restrictions in the nature of early withdrawal penalties));

 

(c)       with respect to any Property which is under construction or the development of which was completed during any of the four (4) fiscal quarters most recently ended, the book

 

value of construction in process as determined in accordance with GAAP for all such Properties at such time (including without duplication Parent’s Ownership Share of all construction in process of Unconsolidated Affiliates of Parent);

 

(d)      the book value of all unimproved real property of Parent and its Subsidiaries determined on a consolidated basis;

 

(e)       the purchase price paid by Parent or any Subsidiary (less any amounts paid to Parent or such Subsidiary as a purchase price adjustment, held in escrow, retained as a contingency reserve, or other similar arrangements) as required to be disclosed in a consolidated balance sheet (including the notes thereto) of Parent for:

 

(i)        any Property (other than a property under development) acquired by Parent or such Subsidiary during Parent’s fiscal quarter most recently ended; and

 

(ii)       any operating Property acquired in the immediately preceding period of twenty four (24) consecutive months for a purchase price indicative of a capitalization rate of less than 7.00%; provided, that if Parent or a Subsidiary acquired such Property together with other Properties or other assets and paid an aggregate purchase price for such Properties and other assets, then Parent shall allocate the portion of the aggregate purchase price attributable to such Property in a manner consistent with reasonable accounting practices; provided further in no event shall the aggregate of value of such operating Properties included in the Gross Asset Value pursuant to this clause (e)(ii) exceed $2,000,000,000.00.

 

(f)       with respect to any purchase obligation, repurchase obligation or forward commitment evidenced by a binding contract included when determining the Total Liabilities of Parent and its Subsidiaries, the reasonably determined value of any amount that would be payable, or property that would be transferable, to Parent or any Subsidiary if such contract were terminated as of such date; and

 

(g)      to the extent not included in the immediately preceding clauses (a) through (f), the value of any real property owned by a Subsidiary (that is not a Wholly Owned Subsidiary) of Borrower or an Unconsolidated Affiliate of Borrower (such Subsidiary or Unconsolidated Affiliate being a "JV") and which property secures Recourse Indebtedness of such JV. For purposes of this clause (g):

 

(x)       the value of such real property shall be the lesser of (A) the Permanent Loan Estimate which would be applicable to such real property were such property a Collateral Property and (B) the amount of Recourse Indebtedness secured by such real property;

 

(y)       in no event shall the aggregate value of such real property included in Gross Asset Value pursuant to this clause (g) exceed $500,000,000.00; and

 

(z)

the value of any such real property shall only be included in Gross Asset

Value if the organizational documents of such JV provide that if, and to the extent, such Indebtedness is paid by Borrower or a Subsidiary of Borrower or by resort to such

real property, then Borrower or a Subsidiary of Borrower shall automatically

 

acquire, without the necessity of any further payment or action, all Equity Interests in

 

such JV not owned by Borrower or any Subsidiary.

"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation means and includes (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not constituting a guaranty, the practical effect of which is to assure the payment or performance (or payment of damages in the event of nonperformance) of any part or all of such obligation.

"Hazardous Substances" shall mean and include all hazardous and toxic substances, wastes or materials, any pollutants or contaminants (including, without limitation, asbestos and raw materials which include hazardous constituents), or any other similar substances or materials which are included under or regulated by any applicable Environmental Laws.

"Indebtedness" means, with respect to a Person, at the time of computation thereof, all of the following (without duplication):

 

(a)

all obligations of such Person in respect of money borrowed;

 

(b)      all obligations of such Person (other than trade debt incurred in the ordinary course of business), whether or not for money borrowed:

 

(i)        represented by notes payable, or drafts accepted, in each case representing extensions of credit,

 

(ii)

evidenced by bonds, debentures, notes or similar instruments, or

 

(iii)     constituting purchase money indebtedness, conditional sales contracts, title retention debt instruments or other similar instruments, upon which interest charges are customarily paid or that are issued or assumed as full or partial payment for property;

 

(c)

capitalized lease obligations of such Person;

 

(d)      all reimbursement obligations of such Person under or in respect of any letters of credit or acceptances (whether or not the same have been presented for payment); and

 

(e)       all Indebtedness of other Persons which (i) such Person has Guaranteed or is otherwise recourse to such Person or (ii) is secured by a Lien on any property of such Person.

 

"Interest Expense" means, with respect to a Person and for any period,

 

(a)       the total interest expense (including, without limitation, interest expense attributable to capitalized lease obligations) of such Person and in any event shall include all letter of credit fees amortized as interest expense and all interest expense with respect to any Indebtedness in respect of which such Person is wholly or partially liable whether pursuant to any repayment, interest carry, performance Guarantee or otherwise, plus

 

(b)       to the extent not already included in the foregoing clause (a) such Person’s Ownership Share of all paid or accrued interest expense for such period of Unconsolidated Affiliates of such Person.

Interest Expense allocable to minority interest in Subsidiaries of Borrower shall be excluded from Interest Expense of Parent and its Subsidiaries when determined on a consolidated basis.

"Investment" means, with respect to any Person, any acquisition or investment (whether or not of a controlling interest) by such Person, whether by means of (a) the purchase or other acquisition of any Equity Interest in another Person, (b) a loan, advance or extension of credit to, capital contribution to, Guaranty of Indebtedness of, or purchase or other acquisition of any Indebtedness of, another Person, including any partnership or joint venture interest in such other Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute the business or a division or operating unit of another Person. Any commitment or option to make an Investment in any other Person shall constitute an Investment. Except as expressly provided otherwise, for purposes of determining compliance with any covenant contained in a Loan Document, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

"Lakes Mall Mortgage" means the Michigan Mortgage from The Lakes Mall, LLC (“Lakes Mall”) in favor of U.S. Bank National Association later assigned on March 18, 2002 to Mortgage Holdings, LLC and later assigned to Bank, as amended from time to time.

"Letter of Credit Documents" means, with respect to any letter of credit issued in connection with the Loan, collectively, any application therefor, any certificate or other document presented in connection with a drawing under such letter of credit and any other agreement, instrument or other document governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such letter of credit or (b) any collateral security for any of such obligations.

"LIBOR Rate" means the London Interbank Offered Rates as established from time to time and published in The Wall Street Journal, Money Rates Section which, unless otherwise specified herein or in the Note, is a one (1) month LIBOR Rate.

"Lien" as applied to the property of any Person means: (a) any security interest, encumbrance, mortgage, deed to secure debt, deed of trust, assignment of leases and rents, pledge, lien, charge or lease constituting a capitalized lease obligation, conditional sale or other title retention agreement, or other security title or encumbrance of any kind in respect of any property of such Person, or upon the income, rents or profits therefrom; (b) any arrangement, express or implied, under which any property of such Person is transferred, sequestered or otherwise identified for the purpose of subjecting the same to the payment of Indebtedness or performance of any other obligation in priority to the payment of the general, unsecured creditors of such Person; (c) the filing of any financing statement under the UCC or its equivalent in any

 

jurisdiction; and (d) any agreement by such Person to grant, give or otherwise convey any of the foregoing.

"Loan" means the Revolving Credit Loan from Bank to Borrower.

"Loan Agreement" means this Loan Agreement among Borrower and Bank, and any modifications, amendments, or replacements thereof, in whole or in part.

"Loan Document" means this Loan Agreement, each Note, each Collateral Document,each Letter of Credit Document and each other document or instrument now or hereafter executed and delivered by a Loan Party or Parent in connection with, pursuant to or relating to this Loan Agreement.

"Loan Party" means Borrower, Parent, and each other Person who guarantees all or a portion of the Loan and/or who pledges any Collateral to secure all or a portion of the Loan.

"Maximum Rate" means the maximum variable contract rate of interest which Bank may lawfully charge under applicable statutes and laws from time to time in effect.

"Mortgages" or "Mortgage" means a mortgage, deed of trust, deed to secure debt or similar security instrument made or to be made by a Person owning real estate or an interest in real estate granting a Lien on such real estate or interest in real estate as security for the payment of indebtedness.

"Net Operating Income" means, for any Collateral Property and for the period of twelve (12) consecutive calendar months most recently ending, the sum of the following (without duplication):

 

(a)       rents and all other revenues received in the ordinary course from such Property (including proceeds of rent loss insurance but excluding pre-paid rents and revenues and security deposits except to the extent applied in satisfaction of tenants’ obligations for rent); minus

 

(b)      all expenses paid related to the ownership, operation or maintenance of such Property, including without limitation, taxes and assessments, insurance, utilities, payroll costs, maintenance, repair and landscaping expenses and marketing expenses; minus

 

(c)       an amount equal to (i) the aggregate square footage of all owned space of such Property times (ii) $0.20; minus

 

(d)       an imputed management fee in the amount of three percent (3.0%) of the aggregate base rents and percentage rents received for such Property for such period.

"Net Proceeds" means with respect to an Equity Issuance by a Person, the aggregate amount of all cash received by such Person in respect of such Equity Issuance net of investment banking fees, legal fees, accountants fees, underwriting discounts and commissions and other customary fees and expenses actually incurred by such Person in connection with such Equity Issuance.

 

“Newly Acquired Property” means Property acquired by Borrower, Parent and/or their respective Subsidiaries during any fiscal quarter for which compliance with financial covenants is being tested.

 

"Nonrecourse Indebtedness" means, with respect to a Person, an Extension of Credit or other Indebtedness in respect of which recourse for payment (except for customary exceptions for fraud, misapplication of funds, environmental indemnities, and other similar customary exceptions to recourse liability) is contractually limited to specific assets of such Person encumbered by a Lien securing such Extension of Credit or other Indebtedness.

"Note" means the revolving credit note of even date herewith executed by Borrower to Bank in the original principal sum of One Hundred Five Million Dollars ($105,000,000.00), which is a consolidation of the previously existing note from Lakes Mall payable to the order of the Bank in the principal sum of $38,100,000.00 and the previously existing note from the Borrower payable to the order of the Bank in the principal sum of $66,900,000.00, as such note may be modified, renewed or extended from time to time; and any other note or notes executed at any time to evidence the indebtedness under this Loan Agreement, in whole or in part, and any renewals, modifications and extensions thereof, in whole or in part.

"Off-Balance Sheet Liabilities" means liabilities and obligations of Parent, Borrower, any Subsidiary or any other Person in respect of "off-balance sheet arrangements" (as defined in the SEC Off-Balance Sheet Rules) which Parent would be required to disclose in the "Management’s Discussion and Analysis of Financial Condition and Results of Operations" section of Parent’s report on Form 10-Q or Form 10-K (or their equivalents) which Parent would be required to file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor) (“SEC”). As used in this definition, the term "SEC Off-Balance Sheet Rules" means the Disclosure in Management’s Discussion and Analysis About Off-Balance Sheet Arrangements, Securities Act Release No. 33-8182.68 Fed. Reg. 5982 (Feb. 5, 2003) (to be codified at 17 CFR pts. 228, 229 and 249).

"Ownership Share" means, with respect to any Subsidiary of a Person (other than a Wholly Owned Subsidiary) or any Unconsolidated Affiliate of a Person, the greater of (a) such Person’s relative nominal direct and indirect ownership interest (expressed as a percentage) in such Subsidiary or Unconsolidated Affiliate or (b) subject to compliance with Section 9.4(i) of the Credit Agreement, such Person’s relative direct and indirect economic interest (calculated as a percentage) in such Subsidiary or Unconsolidated Affiliate determined in accordance with the applicable provisions of the declaration of trust, articles or certificate of incorporation, articles of organization, partnership agreement, joint venture agreement or other applicable organizational document of such Subsidiary or Unconsolidated Affiliate.

"Parent" means CBL & Associates Properties, Inc., a Delaware corporation and a qualified public REIT and formerly until March 31, 1997, the sole general partner of Borrower and shall include Parent’s successors and permitted assigns.

"Participant" means each of the following to the extent each of the following owns an interest in the Loan pursuant to the Participation Agreement: Compass Bank, Regions Bank,

 

Branch Banking and Trust Company and Manufacturers and Traders Trust Company, their respective successors and assigns, and any other participants in the Loan.

"Participant's Proportionate Share (BB&T)" means Branch Banking and Trust Company's (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Fifteen Million Dollars ($15,000,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00).

"Participant's Proportionate Share (Compass)" means Compass Bank's, (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Fifteen Million and NO/100 Dollars ($15,000,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00).

"Participant's Proportionate Share (M&T)" means Manufacturers and Traders Trust Company (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Twenty Million and NO/100 Dollars ($20,000,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00).

"Participant's Proportionate Share (Regions)" means Regions Bank's (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Twenty Seven Million Five Hundred Thousand and NO/100 Dollars ($27,500,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00).

"Participants' Proportionate Share" means Participant's Proportionate Share (M&T), Participant's Proportionate Share (Compass), Participant's Proportionate Share (Regions) and Participant's Proportionate Share (BB&T), as such proportionate shares may change from time to time pursuant to the Participation Agreement.

"Participation Agreement" means that certain Participation Agreement entered into on or about even date herewith, among Bank, M&T, Compass Bank, Regions Bank and Branch Banking and Trust Company and/or any other participants in the Loan, as amended from time to time.

"Permanent Loan Estimate" means, as of any date of determination and with respect to any Collateral Property, an amount equal to (a) the trailing twelve (12) month Net Operating Income of such Collateral Property divided by (b) the product of (i) 1.25 and (ii) the mortgage constant for a 25-year loan bearing interest at a per annum rate equal to the greater of: (aa) the average rate published in the United States Federal Reserve Statistical Release (H.15) for 10-year Treasury Constant Maturities during the previous four fiscal quarters plus 2.50% ; or (ab) 7.25%.

"Permitted Encumbrances" shall mean and include:

 

(a)      liens for taxes, assessments or similar governmental charges not in default or being contested in good faith by appropriate proceedings;

(b)     workmen's, vendors', mechanics' and materialmen's liens and other liens imposed by law incurred in the ordinary course of business, and easements and encumbrances which are not substantial in character or amount and do not materially detract from the value or interfere with the intended use of the properties subject thereto and affected thereby;

(c)      liens in respect of pledges or deposits under social security laws, worker's compensation laws, unemployment insurance or similar legislation and in respect of pledges or deposits to secure bids, tenders, contracts (other than contracts for the payment of money), leases or statutory obligations;

(d)     any liens and security interests specifically listed and described in Exhibit "B" hereto attached or in any exhibit describing permitted exceptions and attached to any CBL Mortgage;

(e)      such other liens and encumbrances to which Bank shall consent in writing; and

(f)      leases, licenses, rental agreements or other agreements for use and occupancy of the subject property.

"Person" means an individual, corporation, partnership, limited liability company, association, trust or unincorporated organization, or a government or any agency or political subdivision thereof.

"Property" or "Properties" means a parcel (or group of related parcels) of real property developed (or to be developed) for use as regional mall or retail strip shopping center and any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

"Recourse Indebtedness" means any Indebtedness other than Nonrecourse Indebtedness.

“REIT” means a real estate investment trust, as defined in the Internal Revenue Code.

"Related Entities" or "Related Entity" means any entity which executed a promissory note, guaranty or mortgage, deed of trust, deed to secure debt or any other collateral or security documents in connection with or as a part of the Loan.

“Requisite Lenders” means Bank and the participants having an aggregate proportionate share in the Loan equal to no less than 66.67%.

“Restricted Payment” means any of the following:

(a)

any dividend or other distribution, direct or indirect, on account of any shares of any class of stock or other Equity Interest of Parent or any of its Subsidiaries now or hereafter outstanding, except a dividend payable

 

solely in shares of that class of stock or other Equity Interest to the holders of that class;

(b)

any redemption, conversion, exchange, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of stock or other Equity Interest of Parent or any of its Subsidiaries now or hereafter outstanding;

 

(c)

any payment or prepayment of principal of, premium, if any, or interest on, redemption, conversion, exchange, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Subordinated Debt; and

 

(d)

any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of stock or other Equity Interest of Parent or any of its Subsidiaries now or hereafter outstanding.

"Revolving Credit Advances" means advances of principal on the Revolving Credit Loan by Bank under the terms of this Loan Agreement to Borrower during the term of the Revolving Credit Loan pursuant to Section 3.1.

"Revolving Credit Loan" means the Borrower's indebtedness owed to Bank pursuant to Section 2 of this Loan Agreement.

“Senior Officer” means the Chairman, Vice Chairman, President, an Executive Vice President, Senior Vice President-Finance, Senior Vice President-Real Estate Finance, Senior Vice President–Accounting, Controller and Chief Financial Officer of Borrower or Parent.

“Subordinated Debt” means Indebtedness for money borrowed of Borrower or any of its Subsidiaries that is subordinated in right of payment and otherwise to the Advances (as such term is defined in the Credit Agreement) and the other Obligations (as such term is defined in the Credit Agreement) in a manner satisfactory to Bank, in its sole and absolute discretion.

"Subsidiary" or "Subsidiaries" means, for any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (without regard to the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

"Tangible Net Worth" means, as of a given date, the stockholders’ equity of Parent and its Subsidiaries determined on a consolidated basis plus (x) increases in accumulated depreciation accrued after September 30, 2002 and (y) minority interests in Borrower minus (to the extent reflected in determining stockholders’ equity of Parent and its Subsidiaries): (a) the amount of any write-up in the book value of any assets contained in any balance sheet resulting

 

from revaluation thereof or any write-up in excess of the cost of such assets acquired (but excluding any such write-up for purchase price adjustments of acquisition properties based on GAAP), and (b) all amounts appearing on the assets side of any such balance sheet for assets which would be classified as intangible assets under GAAP, all determined on a consolidated basis.

"Termination Date of Revolving Credit Loan" shall mean the earlier of (a) June 1, 2011, or in the event that Bank and Borrower shall hereafter mutually agree in writing that the Revolving Credit Loan and Bank's commitment hereunder shall be extended to another date, such other date mutually agreed upon between Bank and Borrower to which Bank's commitment shall have been extended, or (b) the date as of which Borrower shall have terminated Bank's commitment under the provisions of Section 2.5 hereof.

"Total Liabilities" means, as to any Person as of a given date, all liabilities which would, in conformity with GAAP, be properly classified as a liability on a consolidated balance sheet of such Person as of such date, and in any event shall include (without duplication and whether or not a liability under GAAP) all of the following:

(a)

all letter of credits of such Person;

 

(b)      all purchase and repurchase obligations and forward commitments evidenced by binding contracts, including forward equity commitments and contracts to purchase real property, reasonably determined to be owing under any such contract assuming such contract were terminated as of such date;

 

(c)       all quantifiable contingent obligations of such Person including, without limitation, all Guarantees of Indebtedness by such Person and exposure under swap agreements;

 

(d)      all Off-Balance Sheet Liabilities of such Person and the Ownership Share of the Off-Balance Sheet Liabilities of Unconsolidated Affiliates of such Person;

 

(e)       all Indebtedness of Subsidiaries of such Person, provided that Indebtedness of a Subsidiary that is not a Wholly Owned Subsidiary shall be included in Total Liabilities only to the extent of Borrower’s Ownership Share of such Subsidiary (unless Borrower or a Wholly Owned Subsidiary of Borrower is otherwise obligated in respect of such Indebtedness); and

 

(f)       such Person’s Ownership Share of the Indebtedness of any Unconsolidated Affiliate of such Person.

For purposes of this definition:

 

(1)      Total Liabilities shall not include Indebtedness with respect to letters of credit if, and to the extent, such letters of credit are issued

 

(i)        to secure obligations to municipalities to perform work in connection with construction of projects, such exclusion under this clause (i) to be to the extent there are reserves for such obligations under the construction loan for the applicable project;

 

(ii)

in support of permanent loan commitments, in lieu of a deposit;

 

(iii)     as a credit enhancement for Indebtedness incurred by an Subsidiary of Borrower, but only to the extent such Indebtedness is already included in Total Liabilities; or

 

(iv)      as a credit enhancement for Indebtedness incurred by a Person which is not an Affiliate of Borrower, such exclusion under this clause (iv) to be to the extent of the value of any collateral provided by such Person to secure such letter of credit.

 

(2)       obligations under short-term repurchase agreements entered into as part of a cash management program shall not be included as Total Liabilities;

(3)       all items included in line item "Accounts Payable and Accrued Liabilities" under the category of "Liabilities and Shareholder's Equity" in the Consolidated Balance Sheets included in Parent's Form 10-Q or Form 10-K (or their equivalent) filed with the SEC shall not be included as Total Liabilities.

"UCC" means the Uniform Commercial Code as in effect in any applicable jurisdiction.

"Unconsolidated Affiliate" means, with respect to any Person, any other Person in whom such Person holds an Investment, which Investment is accounted for in the financial statements of such Person on an equity basis of accounting and whose financial results would not be consolidated under GAAP with the financial results of such Person on the consolidated financial statements of such Person.

"Wells Fargo" means Wells Fargo Bank, National Association.

"Wholly Owned Subsidiary" means any Subsidiary of a Person in respect of which all of the equity securities or other ownership interests (other than, in the case of a corporation, directors’ qualifying shares) are at the time directly or indirectly owned or controlled by such Person or one or more other Subsidiaries of such Person or by such Person and one or more other Subsidiaries of such Person.

1.2         Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with generally accepted accounting principles consistent with those applied in the preparation of the financial statements required to be delivered from time to time pursuant to Section 6.5 hereof.

SECTION 2: COMMITMENT; FUNDING AND TERMS OF REVOLVING CREDIT LOAN

2.1         The Commitment . Subject to the terms and conditions herein set out, Bank agrees and commits to make loan advances to and issue letters of credit for the account of Borrower from time to time, from the Closing Date until the Termination Date of Revolving Credit Loan, in an aggregate principal amount of the loan advances and the face amount of any letters of credit not to exceed, at any one time outstanding, the lesser of (a) One Hundred Five

 

Million Dollars ($105,000,000.00); (b) Borrower's Borrowing Base, as defined in Section 1; or (c) the Permanent Loan Estimate.

2.2         Funding the Loan . Each loan advance hereunder shall be made upon the written request of Borrower to Bank, specifying the date and amount and intended use thereof. All advances hereunder shall be made by depositing the same to the checking account of Borrower at Bank or other methods acceptable to Borrower and Bank.

2.3         The Note and Interest . The Revolving Credit Loan shall be evidenced by one (1) promissory note of Borrower payable to the order of Bank in the aggregate principal amount of One Hundred Five Million Dollars ($105,000,000.00), in form substantially the same as the copy of the Note, attached hereto as Exhibit "C. " The entire principal amount of the Loan shall be due and payable on the Termination Date of Revolving Credit Loan. The unpaid principal balances of the Revolving Credit Loan shall bear interest from the Closing Date on disbursed and unpaid principal balances (calculated on the basis of a year of 365 or 366 days as is appropriate) at a rate per annum as specified in the Note. Said interest shall be payable monthly on the first day of each month after the Closing Date. Bank shall mail to Borrower a billing notice at least ten (10) days prior thereto setting forth the payment amount next due, but any failure to send such notice shall not relieve Borrower of the obligation to pay accrued interest. The final installment of interest, together with the entire outstanding principal balance of the Revolving Credit Loan, shall be due and payable on the Termination Date of Revolving Credit Loan. The first selection of the one (1) month, three (3) months, six (6) months or, if funds are available in the interbank eurodollar market, twelve (12) months LIBOR Rate shall be made by Borrower on or prior to the date of the Note and each selection thereafter shall be made at least twenty four (24) hours prior to the end of the then applicable interest rate period. Borrower may not ever select a rate period which exceeds the Termination Date of the Revolving Credit Loan. In the event funding at the LIBOR Rate is not available as a matter of law, funding to the extent allowed hereunder shall be at the Base Rate minus one and fifty hundredths percent (1.50%); however, the interest rate shall never be less than four and fifty hundredths percent (4.50%) per annum.)

2.4         Commitment Fee/Servicing Fee/ Other Fees . On the Closing Date Borrower will pay to Bank (in addition to the commitment fees it has previously paid) an additional commitment/extension fee of Five Hundred Twenty Five Thousand and No/100 Dollars ($525,000.00). In addition to the commitment/extension fee, on each June 1, Borrower shall pay to Bank a servicing fee in the amount of Forty Thousand and NO/100 Dollars ($40,000.00) for Bank's services in connection with administering the Loan participation with the Participants. The servicing fee shall belong solely to Bank and the Participants shall have no interest therein. Borrower agrees that the commitment fees and servicing fee are fair and reasonable considering the condition of the money market, the creditworthiness of Borrower, the interest rate to be paid, and the nature of the security for the Loan.

2.5         Borrowings under, Prepayments or Termination of the Revolving Credit Loan . Borrower may, at its option, from time to time, subject to the terms and conditions of this Loan Agreement, without penalty, borrow, repay and reborrow amounts under the Note, and

 

principal payments received shall be applied by Bank to the Note all in such order and amounts as Bank deems appropriate in its sole discretion.

By notice to Bank in writing, Borrower shall be entitled to terminate Bank's commitment to make further advances on the Revolving Credit Loan; and provided that the Revolving Credit Loan and all interest and all other obligations of Borrower to Bank arising hereunder shall have been paid in full, Bank shall thereupon at Borrower's request release its security interest in all of Borrower's Property securing the Revolving Credit Loan.

2.6         Substitution of Collateral . Upon Bank's prior written approval, Borrower may substitute collateral originally provided for the Revolving Credit Loan for collateral of equal or greater value but such substituted collateral must be acceptable to Bank and the acceptance thereof is solely within the discretion of Bank.

2.7

Intentionally Deleted .

2.8         Secondary Financing by Parent Parent was formerly the general partner of Borrower. It is also a real estate investment trust. In the event Parent does any additional offering of its securities, if required by Bank, it will apply no less than 75% net of expenses of the monies received from such offering for the benefit of Borrower and will not use that percentage of funds so received to capitalize or otherwise fund any other new partnerships or entities that are not affiliates of Borrower.

2.9         Issuance of Letters of Credit . To the extent that letters of credit are requested by Borrower to be issued in connection with the Loan, Borrower agrees to execute and deliver to Bank any documents reasonably requested by Bank related to the issuance of the letters of credit, including but not limited to Bank’s standard form of reimbursement agreement. The letters of credit shall not have an expiry date beyond the maturity date of the Note. Subject to compliance with the other terms and provisions of this Loan Agreement, up to Twenty Million Dollars ($20,000,000.00) of the Loan may be used for issuance of letters of credit for any purpose acceptable to Bank. While the face amount of the letters of credit shall be counted against availability under the Loan as described in Section 2.1, such amounts shall only be deemed actual Loan advances when the letter of credit is drawn upon.

SECTION 3: REQUIRED PAYMENTS, PLACE OF PAYMENT, ETC.

3.1         Required Repayments . In the event that the outstanding aggregate principal balance of the Revolving Credit Loan including outstanding letters of credit, shall at any time exceed the Borrowing Base, upon discovery of the existence of such excess borrowings, Borrower shall, within ninety (90) days from the date of such discovery, make a principal payment which will reduce the outstanding principal balance of the Revolving Credit Loan to an amount which does not exceed the Borrowing Base and/or at Borrower's option provide Bank with additional collateral for the Revolving Credit Loan of a value and type reasonably satisfactory to Bank which additional collateral shall be at a minimum sufficient to secure the then outstanding balance of the Loan (after credit for any principal reduction payment received from Borrower, if any), and if Borrower intends to request additional advances under the Loan,

 

the additional collateral shall include collateral, deemed sufficient in Bank's discretion, to secure the One Hundred Five Million Dollars ($105,000,000.00) credit line limitation, thereafter permitting Borrower to obtain additional advances in the manner and to the extent provided under the terms of this Loan Agreement.

In addition and during such ninety (90) day period or until the principal payment or satisfactory collateral is received, whichever is less, Borrower will not make any additional requests for advances under the Revolving Credit Loan. Once calculated, the Borrowing Base shall remain effective until the next Borrowing Base calculation date as provided in Section 1 of this Loan Agreement.

3.2         Place of Payments . All payments of principal and interest on the Revolving Credit Loan and all payments of fees required hereunder shall be made to Bank, at its address listed in Section 9.2 of this Loan Agreement in immediately available funds.

3.3         Payment on Non-Business Days . Whenever any payment of principal, interest or fees to be made on the indebte