AMENDED AND RESTATED LOAN AGREEMENT

 

                                                                 Exhibit 10.20.1

 

                       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 June 30, 2004

      between the undersigned Borrower, Lakeshore, Lakes Mall and the Bank.)

 

         THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") is made as

of December 30, 2004, to be effective December 30, 2004 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 LAKESHORE/SEBRING LIMITED PARTNERSHIP, a Florida

limited partnership, whose address is the same as the Borrower's described above

("Lakeshore") and THE LAKES MALL, LLC, a Michigan limited liability company

whose address is the same as the Borrower's described above ("Lakes Mall"), 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 the Bank commit to make loans and advances

to it, and to Lakeshore and to Lakes Mall, for the benefit of Borrower, on a

revolving credit basis in an amount not to exceed at any one time outstanding

the aggregate principal sum of Eighty Million Dollars ($80,000,000.00) 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. The Bank has agreed to make

certain portions of such loans and advances on the terms and conditions herein

set forth. KeyBank National Association, Compass Bank, Amsouth Bank of Tennessee

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) change the

Capitalized Value cap rates for Mall Projects from 8.625% to 8.25%; (b) to

change the definition of Total Obligations and (c) to extend the maturity date

of the Loan to June 1, 2006.

 

         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:

 

                                       1

<PAGE>

 

         "Adjusted Loan Amount" means 100% of the combined Net Operating Income

from the properties described in the CBL Mortgage (except the CBL Mortgage on

The Lakes Mall which shall be included at 90% of the Net Operating Income) as of

each July 1, January 1, April 1 and October 1, as the case may be, based upon

the then immediately preceding twelve (12) month period, divided by 1.25 with

the resulting figure being further divided by the applicable mortgage constant

of .1042.

 

         "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.

 

         "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 the Bank's undivided participating

interest in the Loan which shall be equal to Twenty Two Million Five Hundred

Thousand and NO/100 Dollars ($22,500,000.00).

 

         "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 five and

twenty five hundredths percent (5.25%) per annum.

 

         "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 be calculated each July 1, January 1,

April 1 and October 1. The Borrowing Base will be an amount not to exceed the

Borrower's Adjusted Loan Amount or $80,000,000.00 whichever is less.

 

         "Business Day" means a banking business day of the Bank and which is

also a day on which dealings are carried on in the interbank eurodollar market.

 

                                       2

<PAGE>

 

         "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.

 

         "Capitalized Value" and "Capitalized Value (Total)" shall mean the

total of (a), (b) and (c):

 

(a) with respect to Non-Mall Projects, an amount, calculated as of any period,

equal to the quotient of (i) the sum of (A) Borrower's Funds From Operations

during the most recent quarter end (not including Funds from Operations from

Mall Projects), minus (B) Net Operating Income (loss) from any Newly Acquired

Property acquired during the quarter (not including Mall Projects), minus (C)

preferred dividends paid by Borrower, plus (D) the Interest Expense (not

including Interest Expense from Mall Projects) used in calculating Borrower's

Funds From Operations pursuant to clause (A) above (all annualized) and (ii)

9.75%.

 

(b) with respect to Mall Projects, an amount, calculated as of any period, equal

to the quotient of (i) the sum of (A) Borrower's Funds From Operations during

the most recent quarter end (from Mall Projects only), minus (B) Net Operating

Income (loss) from any Newly Acquired Property acquired during the quarter (from

Mall Projects only), plus (C) the Interest Expense (from Mall Projects only)

used in calculating Borrower's Funds From Operations pursuant to clause (A)

above (all annualized) and (ii) 8.25%.

 

(c) plus for that period the book value of any Newly Acquired Property acquired

during the quarter, evidenced by the supporting financial information to be

furnished by the Borrower pursuant to Section 6.5(d) hereof.

 

         "CBL Holdings I" means CBL Holdings I, Inc., a Delaware corporation and

the sole general partner of Borrower.

 

         "CBL Holdings II" means CBL Holdings II, Inc., a Delaware corporation

and a limited partner of Borrower.

 

         "CBL Management, Inc." means CBL & Associates Management, Inc., a

Delaware corporation.

 

         "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, Lakeshore/Sebring

Limited Partnership, Vicksburg Mall Associates, Ltd., The Lakes Mall, LLC and

Towne Mall and/or any other entity related to or owned by Borrower and/or CBL &

Associates Properties, Inc. and/or CBL Holdings I, Inc. in favor of Bank

covering their interest in the properties described in Exhibit "A," attached

hereto and made a part hereof.

 

         "CBL   Properties,   Inc." 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.

 

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

first paragraph of this Loan Agreement.

 

                                       3

<PAGE>

 

         "Consolidated" means, as to any calculation hereunder, that such

calculation shall be made on a consolidated basis for Borrower, CBL Holdings,

CBL Properties, Inc. and CBL Management, Inc., with each such calculation being

made, (a) in respect of Borrower, on a consolidated basis for Borrower and its

Subsidiaries, (b) in respect of CBL Holdings, on a consolidated basis for CBL

Holdings and its Subsidiaries, (c) in respect of CBL Properties, Inc., on a

consolidated basis for CBL Properties, Inc. and its Subsidiaries, and (d) in

respect of CBL Management, Inc., on a consolidated basis for CBL Management,

Inc. and its Subsidiaries.

 

         "Contingent Obligations" means, for any Person, any material

commitment, undertaking, Guarantee or material obligation constituting a

continuing liability under GAAP, but only to the extent the same are required to

be reflected on such Persons' audited financial statements.

 

         "Credit Agreement" means the Credit Agreement dated as of July 28, 1994

and as amended by amendments dated as of May 5, 1995, July 5, 1995 and

subsequent amendments between the Borrower, Wells Fargo and others.

 

         "Debt Coverage Ratio" shall mean, as of any date the same is

calculated, the ratio of (a) EBITDA for the fiscal quarter ending on or most

recently ended prior to such date to (b) Debt Service during such fiscal

quarter, in each case calculated on a Consolidated basis in accordance with

GAAP.

 

         "Debt Service" means, for any period, on a consolidated basis, with

respect to Borrower, CBL Properties, Inc., and their respective Subsidiaries for

any period, the sum of (a) Interest Expense of Borrower, CBL Properties, Inc.

and their respective Subsidiaries for such period, plus (b) regularly scheduled

principal payments on consolidated Indebtedness of Borrower, CBL Properties,

Inc. and their respective Subsidiaries during such period. For purposes of this

definition, unscheduled voluntary principal payments, voluntary prepayments and

final balloon payments are excluded from determining regularly scheduled

principal payments. For purposes of this definition, a voluntary prepayment of

Indebtedness shall not constitute a regularly scheduled principal payment even

if, under the terms of the agreement governing such Indebtedness, the notice of

prepayment has the effect of causing the amount of the prepayment to become due

and payable on the date set for such notice of such prepayment.

 

         "Default Rate" means the rate of interest described in the Note, which

shall accrue at the Bank's option after the occurrence of an Event of Default

which remains uncured after any applicable grace period.

 

         "EBITDA" means, for any period, the sum of (i) consolidated Net Income

of Borrower, CBL Properties, Inc. and their respective Subsidiaries for such

period, plus (ii) depreciation and amortization expense for consolidated

Property of Borrower, CBL Properties, Inc. and their respective Subsidiaries for

such period, plus (iii) depreciation and amortization expense related to the

earnings of Unconsolidated Affiliates of Borrower, CBL Properties, Inc. and

their respective Subsidiaries, plus (iv) Interest Expense for consolidated

Property of Borrower, CBL Properties, Inc. and their respective Subsidiaries for

such period, plus (vi) Interest Expense related to the earnings of

Unconsolidated Affiliates of Borrower, CBL Properties, Inc. and their respective

Subsidiaries, plus (vi) earnings attributable to any minority ownership interest

in the operating partnership, i.e., the Borrower, plus (vii) loss on

 

 

                                        4

<PAGE>

 

extinguishment of debt, or minus gain on extinguishment of debt, plus (viii)

income tax expense in respect of such period, plus (ix) extraordinary losses

(and any unusual losses arising in or outside the ordinary course of business of

Borrower, CBL Properties, Inc. and their respective Subsidiaries not included in

extraordinary losses determined in accordance with GAAP that have been reflected

in the determination of Net Income) for such period, or minus extraordinary

gains of Borrower, CBL Properties, Inc. and their respective Subsidiaries (and

any unusual gains arising in or outside the ordinary course of business of

Borrower, CBL Properties, Inc. or such respective Subsidiaries not included in

extraordinary gains determined in accordance with GAAP that have been reflected

in the determination of Net Income) for such period, plus (x) expenses (not to

exceed $1,000,000.00) related to write-off of development costs concerning

abandoned projects, determined in each case on a Consolidated basis in

accordance with GAAP. Notwithstanding any language above to the contrary, all

determinations of EBITDA shall be made without duplication and all calculations

relative to unconsolidated properties or affiliates shall only include

Borrower's, CBL Properties, Inc.'s and their respective Subsidiaries' pro rata

portion thereof.

 

         "Effective Date," which definition is used and only applies within

Section 7.9 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.

 

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

8.

 

         "Funds from Operations" means, as to any period, on a consolidated

basis, an amount equal to (a) income (loss) from operations of Borrower, CBL

Properties, Inc. and their respective Subsidiaries for such period, plus (b)

depreciation and amortization from consolidated and unconsolidated property,

plus depreciation and amortization from property included in discontinued

operation, plus (c) to the extent not included in clause (a) above, gain (loss)

on the sales of outparcels made in the ordinary course of business, minus (d)

Minority investors share of depreciation and amortization of certain property,

minus (e) Minority investors share of income from certain property, minus (f)

depreciation and amortization from non-real estate property, plus (g) income

from operations of Unconsolidated Affiliates and discontinued operations

determined in each case in accordance with GAAP. Adjustments for Unconsolidated

Affiliates will be calculated to reflect funds from operations on the same

basis.

 

         "GAAP" shall mean generally accepted accounting principles applied on a

basis consistent with those which are to be used in making the calculations for

purposes of determining compliance with this Loan Agreement. All calculations

made for the purposes of determining compliance with this Loan Agreement shall

(except as may be otherwise expressly provided herein) be made by application of

generally accepted accounting principles applied on a basis consistent with

those used in preparation of the annual and quarterly financial statements of

CBL Properties, Inc. furnished to the SEC.

 

                                       5

<PAGE>

 

         "Guarantee" by any Person means any obligation, contingent or

otherwise, of such Person directly or indirectly guaranteeing any Indebtedness

or other obligation of any other Person and, without limiting the generality of

the foregoing, any obligation, direct or indirect, contingent or otherwise, of

such Person (i) to purchase or pay (or advance or supply funds for the purchase

or payment of) such Indebtedness or other obligation (whether arising by virtue

of partnership arrangements, by agreement to keep-well, to purchase assets,

goods, securities or services, to take-or-pay, or to maintain financial

statement conditions or otherwise), or (ii) entered into for the purpose of

assuring in any other manner the obligee of such Indebtedness or other

obligation of the payment thereof or to protect such obligee against losses in

respect thereof (in whole or in part), provided that the term "Guarantee" shall

not include endorsements for collection or deposit in the ordinary course of

business. The term "Guarantee" used as a verb has a corresponding meaning.

 

         "Hazardous Substances" shall mean 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" shall mean, as applied to any Person at any time,

without duplication (a) all indebtedness, obligations or other liabilities of

such Person (i) for borrowed money or evidenced by debt securities, debentures,

acceptances, notes or other similar instruments, and any accrued interest, fees

and charges relating thereto; (ii) with respect to letters of credit issued for

such Person's account; (iii) under agreements for the prospective purchase or

repurchase of assets other than obligations arising under unexercised option

agreements; (iv) to make future investments in any Person; (v) to pay the

deferred purchase price of property or services previously purchased or

rendered, except unsecured trade accounts payable and accrued expenses required

to be capitalized in accordance with GAAP; (b) all indebtedness, obligations or

other liabilities of such Person or others secured by a Lien on any asset of

such Person, whether or not such Person is otherwise obligated on such

indebtedness, obligations or liabilities or such indebtedness, obligations or

liabilities are assumed by such Person, all as of such time; (c) all

indebtedness, obligations or other liabilities of such Person in respect of any

foreign exchange contract or any interest rate swap, cap or collar agreement or

similar arrangement, net of liabilities owed to such Person by the

counterparties thereon; (d) all shares of Capital Stock or equivalent ownership

interest subject (upon the occurrence of any contingency or otherwise) to

mandatory redemption prior to the date the Loan is scheduled to be repaid in

full; (e) obligations of others to the extent Guaranteed by such Person or to

the extent such Person is otherwise liable on a recourse basis; and (f) such

Person's pro rata share of non-recourse Indebtedness of a partnership in which

such Person is a partner (it being understood that the remaining portion of such

non-recourse partnership Indebtedness shall not constitute Indebtedness of such

Person).

 

         "Interest Coverage Ratio" means, as of any date the same is calculated,

the ratio of (a) EBITDA for the fiscal quarter ending on or most recently ended

prior to such date to (b) Interest Expense for such fiscal quarter, determined

in each case on a Consolidated basis in accordance with GAAP.

 

         "Interest Expense" means, for any Person for any period, total interest

expense on Indebtedness of such Person, whether paid or accrued, but without

 

 

                                        6

<PAGE>

 

duplication (including the interest component of capital leases), including,

without limitation, (a) all commissions, discounts and other fees and charges

owed with respect to letters of credit, to the extent they are not capitalized,

and (b) one hundred percent (100%) of any interest expense paid, or any other

Person for which such Person is wholly or partially liable (whether by

Guarantee, pursuant to Applicable Law or otherwise) but excluding (i) interest

on Reserved Construction Loan and (ii) swap or other interest hedging breakage

costs, all as determined in conformity with GAAP.

 

         "Investment" in any Person shall mean any investment, whether by means

of share purchase, loan, advance, extension of credit, capital contribution or

otherwise, in or to such Person, the Guarantee of any Indebtedness of such

Person, or the subordination of any claim against such Person to other

Indebtedness of such Person.

 

         "Lakeshore Note" means the promissory note from Lakeshore in the

original principal sum of $34,600,000.00 payable to the order of Wells Fargo,

later assigned by Wells Fargo to Shopping Center Finance Corp., and later

assigned by Shopping Center Finance Corp. to the Bank, such Promissory Note

being now for the principal sum of $20,400,000.00, as amended, renewed, or

replaced from time to time, but it does not include the Renewal of Promissory

Note dated December 6, 1994 to be effective April 1, 1994.

 

         "Lakeshore Mortgage" means the Florida Mortgage from Lakeshore/Sebring

Limited Partnership in favor of Wells Fargo later assigned to Shopping Center

Finance Corp. and subsequently assigned to the Bank, as amended from time to

time.

 

         "Lakes Mall Note" means the promissory note from Lakes Mall in the

original principal sum of $38,100,000.00 payable to U.S. Bank National

Association later assigned on March 18, 2002 to Mortgage Holdings, LLC and later

assigned to the Bank, as amended from time to time.

 

         "Lakes Mall Mortgage" means the Michigan Mortgage from Lakes Mall in

favor of U.S. Bank National Association later assigned on March 18, 2002 to

Mortgage Holdings, LLC and later assigned to the Bank, as amended from time to

time.

 

         "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" means any interest in Property securing an obligation owed to,

or a claim by, a Person other than the owner of the Property, whether such

interest is based on the common law, statute or contract, and including but not

limited to the security interest or lien arising from a deed of trust, mortgage,

encumbrance, pledge, conditional sale or trust receipt or a lease, consignment

or bailment for security purposes, and including but not limited to

reservations, exceptions, encroachments, easements, rights-of-way, covenants,

conditions, restrictions, leases, and other title exceptions and encumbrances

affecting Property.

 

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

including the Lakeshore Note and Lakes Mall Note which were purchased by the

Bank.

 

                                       7

<PAGE>

 

         "Loan Agreement" means this Loan Agreement between the Borrower,

Lakeshore, Lakes Mall and the Bank, and any modifications, amendments, or

replacements thereof, in whole or in part.

 

         "Mall Projects" means the real estate and improvement owned by the

Borrower and/or it Affiliates that is in the form of an enclosed regional retail

shopping mall that includes two (2) or more anchor stores.

 

         "Management Fee" means four percent (4%) of all base and percentage

rent earned by the Borrower from Non-Mall Projects for the period in question,

plus three percent (3%) of all base and percentage rent earned by the Borrower

for Mall Projects for the period in question.

 

         "Maximum Rate" means the maximum variable contract rate of interest

which the 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.

 

         "Newly Acquired Property" means Property acquired by Borrower, CBL

Properties, Inc. and/or their respective Subsidiaries during any fiscal quarter

for which compliance with financial covenants is being tested.

 

         "Net Income" means, with respect to Borrower, CBL Properties, Inc., and

their respective Subsidiaries for any period, net earnings (or loss) after

deducting therefrom all operating expenses, income taxes and reserves and net

earnings (or loss) attributable to minority interests in Subsidiaries for the

period in question, determined in each case on a Consolidated basis in

accordance with GAAP. Without limiting the generality of the foregoing, earnings

(or losses) from the sale of outparcels in the ordinary course of business shall

be included in determining Net Income.

 

         "Net Operating Income" means, for any Property for the period in

question (a) total revenues received, minus (b) total cash expenses (including

management fees) before interest, depreciation, amortization and items

capitalized under GAAP.

 

         "Net Worth" means, with respect to Borrower, CBL Properties, Inc. and

their Subsidiaries as of any date, the sum of (a) total assets, minus (b) total

liabilities, plus (c) accumulated depreciation, plus (d) without duplication,

any minority ownership interest in the operating partnership, i.e., the

Borrower, minus (e) all intangible assets, determined on a Consolidated basis in

accordance with GAAP.

 

         "Non-Mall Projects" means the real estate and improvements owned by the

Borrower and/or it Affiliates that is in the form of a retail shopping center

that is not a Mall Project.

 

         "Note" means the Revolving Credit Notes executed by the Borrower to the

Bank in the original principal sums of Ten Million Six Hundred Thousand Dollars

($10,600,000.00) (the "$10,600,000.00 Note") and Ten Million Nine Hundred

 

 

                                        8

<PAGE>

 

Thousand and No/100 Dollars ($10,900,000.00) (the "$10,900,000.00 Note"),

respectively, the Lakeshore Note and the Lakes Mall Note, as such note or notes

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.

 

         "Participant" means KeyBank National Association, Compass Bank. AmSouth

Bank of Tennessee and Branch Banking and Trust Company, their successors and

assigns, and any other participants in the Loan.

 

         "Participant's Proportionate Share (AmSouth)" means AmSouth 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 shall be

equal to Twenty Two Million Five Hundred Thousand and NO/100 Dollars

($22,500,000.00) divided by Eighty Million Dollars ($80,000,000.00).

 

         "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 shall be equal to Fifteen Million and NO/100 Dollars ($15,000,000.00)

divided by Eighty Million Dollars ($80,000,000.00).

 

         "Participant's Proportionate Share (KeyBank)" means KeyBank'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 shall be equal to

Seven Million Five Hundred Thousand and NO/100 Dollars ($7,500,000.00) divided

by Eighty Million Dollars ($80,000,000.00).

 

         "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 shall be

equal to Twelve Million Five Hundred Thousand and NO/100 Dollars

($12,500,000.00) divided by Eighty Million Dollars ($80,000,000.00).

 

         "Participants' Proportionate Share" means Participant's Proportionate

Share (KeyBank), Participant's Proportionate Share (Compass), Participant's

Proportionate Share (AmSouth) and Participant's Proportionate Share (BB&T).

 

         "Participation Agreement" means that certain Participation Agreement

entered into of even date herewith among Bank, KeyBank National Association,

Compass Bank, AmSouth Bank of Tennessee and Branch Banking and Trust Company

and/or any other participants in the Loan, as amended from time to time.

 

         "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;

 

          (d)   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;

 

                                       9

<PAGE>

 

          (e)   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;

 

          (f)   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;

 

          (g)   such other liens and   encumbrances to which Bank shall consent in

               writing; and

 

          (h)   leases,   licenses,   rental agreements or other agreements for use

               and occupancy of the subject property.

 

         "Person" means an individual, partnership, corporation, trust,

unincorporated organization, association, joint venture or a government or

agency or political subdivision thereof.

 

         "Project" or "Projects," which definition is used and only applies

within Section 7.9 hereof, means the real estate projects owned by Borrower, a

Wholly Owned Subsidiary of Borrower, a Subpartnership or, to the extent approved

by the Bank, any other Person. "Project" shall also mean any one of the

Projects. The capitalized terms used in this definition shall have the same

meaning as provided in the Credit Agreement.

 

         "Property" means any interest in any kind of property or asset, whether

real, personal or mixed, tangible or intangible.

 

         "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.

 

         "Reserved Construction Loan" shall have the meaning shown in

Section 7.7. hereof.

 

         "Revolving Credit Advances" means advances of principal on the

Revolving Credit Loan by the Bank under the terms of this Loan Agreement to the

Borrower during the term of the Revolving Credit Loan pursuant to Section 3.1.

 

          "Revolving Credit Loan" means the aggregate of the Borrower's,

Lakeshore's and Lakes Mall's indebtedness to the Bank pursuant to Section 2 of

this Loan Agreement.

 

         "Revolving Credit Note" means the Notes as described in Section 2.3

hereof and the Lakeshore Note and the Lakes Mall Note.

 

         "SEC" shall mean the United States Securities and Exchange Commission.

 

         "Subsidiary" shall mean, as to any Person, any other Person, more than

fifty percent (50%) of the outstanding shares of Capital Stock, partnership

interest or other ownership interest, having ordinary voting power to elect a

 

 

                                       10

<PAGE>

 

majority of the board of directors or similar governing body of such other

Person (irrespective of whether or not at the time stock or other ownership

interests of any other class or classes of such other Person shall have or might

have voting power by reason of the happening of any contingency) is at the time

directly or indirectly owned or controlled by such Person or by one or more

"Subsidiaries" of such Person, and whose financial reports are prepared on a

consolidated basis with such Person. "Wholly Owned Subsidiary" shall mean any

such Person of which all of the shares of Capital Stock or ownership interests

(other than, in the case of a corporation, directors' qualifying shares) are so

owned or controlled. For purposes of this Loan Agreement CBL Management, Inc.

shall be deemed to be a Subsidiary of Borrower.

 

         "Termination Date of Revolving Credit Loan" shall mean the earlier of

(a) June 1, 2006, or in the event that the Bank and Borrower shall hereafter

mutually agree in writing that the Revolving Credit Loan and the Bank's

commitment hereunder shall be extended to another date, such other date mutually

agreed upon between Bank and Borrower to which the Bank's commitment shall have

been extended, or (b) the date as of which Borrower shall have terminated the

Bank's commitment under the provisions of Section 2.5 hereof.

 

         "Term Out Amount" means the then outstanding principal balance of the

Loan due and owing the Bank under the Note, if the Bank elects not to extend the

existing Maturity Date and the Borrower elects to cap the line of credit as

provided in the Note.

 

         "Total Obligations" means, as of any date, the sum (without

duplication) of (a) the Indebtedness of Borrower, CBL Properties, Inc. and their

respective Subsidiaries (other than Indebtedness described in clauses (a)(iii)

and (a)(iv) of the definition thereof); plus (b) the aggregate amount of

Contingent Obligations of Borrower, CBL Properties, Inc. and their respective

Subsidiaries in respect of Indebtedness (other than Indebtedness described in

clauses (a)(iii) and (a)(iv) of the definition thereof); plus (c) Borrower's,

CBL Properties, Inc's or their respective Subsidiaries' proportionate share of

Indebtedness (other than Indebtedness described in clauses (a)(iii) and (a)(iv)

of the definition thereof) of any Unconsolidated Affiliate, whether or not

Borrower, CBL Properties, Inc. or such Subsidiary is obligated on such

Indebtedness; plus (d) all other amounts which would be classified as a

liability on the consolidated balance sheets of Borrower or CBL Properties,

Inc., determined in each case on a Consolidated basis in accordance with GAAP,

minus (e) accrued interest; provided however Total Obligations shall not include

the items included in the line item "Accounts Payable and Accrued Liabilities"

under the category of "Liabilities and Shareholder's Equity" in the Consolidated

Balance Sheets included in CBL Properties, Inc.'s Form 10-Q or Form 10-K (or

their equivalent) filed with the Securities and Exchange Commission (or any

governmental authority substituted therefor).

 

         "Towne Mall Mortgage" means the Ohio Mortgage from Towne Mall in favor

of the Bank, as amended from time to time.

 

         "Unconsolidated Affiliate" shall mean, in respect of any Person, any

other Person in whom such Person holds an Investment, which Investment is

accounted for in the financial statements of such Person on an equity basis of

accounting.

 

         "Wells Fargo" means Wells Fargo Realty Advisors Funding, Incorporated,

a Colorado corporation.

 

                                       11

<PAGE>

 

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 the Borrower, Lakeshore and Lakes Mall from time to time, from the

Closing Date until the Termination Date of Revolving Credit Loan, in an

aggregate principal amount not to exceed, at any one time outstanding, the

lesser of (a) Eighty Million Dollars ($80,000,000.00) minus the sum, if any,

applicable under the provisions of Section 2.8 hereof; or (b) the Borrower's

Borrowing Base, as defined in Section 1.

 

2.2 Funding the Loan. Each loan advance hereunder shall be made upon the written

request of the Borrower to the Bank, specifying the date and amount and intended

use thereof. All advances hereunder, whether under the Note, the Lakeshore Note

or the Lakes Mall Note, shall be made by depositing the same to the checking

account of Borrower at the Bank or other methods acceptable to Borrower and

Bank. LAKESHORE ACKNOWLEDGES AND AGREES THAT NO ADVANCES SHALL BE MADE DIRECTLY

TO LAKESHORE EXCEPT UPON THE EXPRESS WRITTEN CONSENT OF THE BORROWER RECEIVED BY

THE BANK PRIOR TO THE ADVANCE BEING MADE. LAKES MALL ACKNOWLEDGES AND AGREES

THAT NO ADVANCES SHALL BE MADE DIRECTLY TO LAKES MALL EXCEPT UPON THE EXPRESS

WRITTEN CONSENT OF THE BORROWER RECEIVED BY THE BANK PRIOR TO THE ADVANCE BEING

MADE.

 

2.3 The Note and Interest. The Revolving Credit Loan shall be evidenced by two

(2) promissory notes of the Borrower, one (1) promissory note of Lakeshore and

one (1) promissory note of Lakes Mall, each payable to the order of the Bank in

the aggregate principal amount of Eighty Million Dollars ($80,000,000.00), in

form substantially the same as the copy of the Revolving Credit Note, the

Lakeshore Note and the Lakes Mall 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,

commencing January 1, 2005. The Bank shall mail to the 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 the Borrower, Lakeshore or

Lakes Mall 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 the Borrower, Lakeshore

and Lakes Mall (but the rate selected by Lakeshore and Lakes Mall must always be

 

 

                                       12

<PAGE>

 

the same as the rate selected by the Borrower) on or prior to the date of the

Note and each selection thereafter shall be made at least three (3) Business

Days prior to the end of the then applicable interest rate period. Neither the

Borrower, Lakeshore nor Lakes Mall may 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 one half percent (1 1/2%).

 

2.4 Commitment Fee/Servicing Fee. On the Closing Date, the Borrower, Lakeshore

and Lakes Mall agree to pay to the Bank (in addition to the commitment fees it

has previously paid) an additional commitment/extension fee of One Hundred Sixty

Thousand and NO/100 Dollars ($160,000.00). In addition to the

commitment/extension fee, on each November 2 hereafter, the Borrower shall pay

to the Bank a servicing fee in the amount of Twenty Four Thousand and NO/100

Dollars ($24,000.00) for the Bank's services in connection with administering

the Loan participation with the Participants. The servicing fee shall belong

solely to the Bank and the Participants shall have no interest therein. Borrower

, Lakeshore and Lakes Mall agree 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. In the event that Borrower, Lakeshore and Lakes Mall

and Bank shall hereafter mutually agree to extend the term of the Bank's

commitment hereunder, they may also agree at that time as to an additional

commitment fee, if any, to be paid for such further commitment by the Bank, but

not to exceed the maximum permitted by applicable law.

 

2.5 Borrowings under, Prepayments or Termination of the Revolving Credit Loan.

The Borrower may, at its option, from time to time, subject to the terms and

conditions hereof including Section 2.8 hereof, without penalty, borrow, repay

and reborrow amounts under the Note, the Lakeshore Note and the Lakes Mall Note,

and principal payments received shall be applied by the Bank to the Revolving

Credit Note, the Lakeshore Note and the Lakes Mall Note all in such order and

amounts as the Bank deems appropriate in its sole discretion. Neither the

Borrower nor Lakeshore shall be permitted to borrow, repay and reborrow up to

the principal amounts of the Lakeshore Note unless documentary stamps tax and

intangibles tax, required by law to be paid, has been paid on the amounts

readvanced and unless the Bank has a first in priority mortgage on the Florida

property owned by Lakeshore securing the Lakeshore Note. Neither the Borrower

nor Lakes Mall shall be permitted to borrow, repay and reborrow up to the

principal amounts of the Lakes Mall Note unless documentary stamps tax and

intangibles tax, required by law to be paid, has been paid on the amounts

readvanced and unless the Bank has a first in priority mortgage on the Michigan

property owned by Lakes Mall securing the Lakes Mall Note.

 

         By notice to the Bank in writing, Borrower shall be entitled to

terminate the 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 the Bank's prior written approval, the

Borrower may substitute collateral originally provided for the Revolving Credit

 

 

                                       13

<PAGE>

 

Loan for collateral of equal value but such substituted collateral must be

acceptable to the Bank and the acceptance thereof is solely within the

discretion of the Bank.

 

2.7 Secondary Financing by CBL Properties, Inc. CBL Properties, Inc. was

formerly the general partner of the Borrower. It is also a real estate

investment trust. In the event CBL Properties, Inc. does any additional offering

of its securities, if required by the Bank, it will apply no less than 75% net

of expenses of the monies received from such offering for the benefit of the

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

the Borrower or Lakeshore or Lakes Mall.

 

2.8 Cap On Loan. Notwithstanding anything contained in this Loan Agreement to

the contrary, if at any time the Bank does not have a first-in-priority lien on

the property described in the Lakeshore Mortgage up to the sum of Thirty One

Million Dollars ($31,000,000.00) the Loan shall be capped at Forty Nine Million

Dollars ($49,000,000.00).

 

2.9 Issuance of Letters of Credit. To the extent that letters of credit are

requested by the Borrower to be issued in connection with the Loan, the Borrower

agrees to execute and deliver to the Bank any documents reasonably requested by

the Bank related to the issuance of the letters of credit, including but not

limited to the Bank's standard form of reimbursement agreement.

 

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 shall at any time exceed the Borrowing

Base, upon discovery of the existence of such excess borrowings, the Borrower

shall, within one hundred twenty (120) 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 the Bank with additional collateral for the

Revolving Credit Loan of a value and type reasonably satisfactory to the 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 the Bank's discretion, to secure the Eighty

Million Dollars ($80,000,000.00) 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 one hundred twenty (120) day period or

until the principal payment or satisfactory collateral is received, whichever is

less, the 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.

 

                                       14

<PAGE>

 

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 the

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 indebtednesses evidenced by the Note shall fall due on a

Saturday, Sunday or public holiday under the laws of the State of Tennessee,

such payment shall be made on the next succeeding Business Day.

 

SECTION 4:         CONDITIONS OF LENDING

 

4.1 Conditions Precedent to Closing and Funding Initial Advance. The obligation

of the Bank to fund the initial Revolving Credit Loan Advance hereunder is

subject to the condition precedent that the Bank shall have received, on or

before the Closing Date, all of the following in form and substance satisfactory

to the Bank:

 

          (a)   This Loan Agreement.

 

          (b)   The Note, the Lakeshore Note and the Lakes Mall Note.

 

          (c)   The CBL Mortgage,   together with a title   commitment from a title

               insurance   company   acceptable   to the   Bank,   providing   for the

               issuance of a   mortgagee's   loan policy   insuring the lien of the

                CBL Mortgage,   in form,   substance and amount satisfactory to the

               Bank,   containing no   exceptions   which are   unacceptable   to the

               Bank, and containing such endorsements as the Bank may require.

 

          (d)   Current financial statements of the Borrower in form satisfactory

               to the Bank to be held by the Bank in strict confidence.

 

          (e)   Certified copy of Borrower's   limited   partnership   agreement and

               certificate of limited   partnership,   and all amendments   thereto

               and a certificate   of existence for the Borrower,   which the Bank

               acknowledges it has previously received.

 

          (f)   Certified   corporate   resolutions of Borrower's   general partner,

               and   certificate(s)   of existence for Borrower's   general partner

               from the state of its incorporation and such other states as Bank

               shall require,   together with a copy of the charter and bylaws of

                the Borrower's general partner.

 

          (g)   The opinion of counsel for   Borrower and the   Borrower's   general

               partner, that the transactions herein contemplated have been duly

               authorized by all requisite corporate, partnership and/or limited

               liability   authority,   that   this   Loan   Agreement   and the other

               instruments   and   documents   herein   referred   to have   been duly

               authorized,   validly   executed   and are in full force and effect,

               and pertaining to such other matters as the Bank may require.

 

          (h)   A certificate   from an insurance   company,   satisfactory to Bank,

               setting   forth   the   information   concerning   insurance   which is

               required by Section 6.3 of this Loan   Agreement;   or, if the Bank

               shall so   require,   certified   copies of the   original   insurance

               policies   evidencing   such   insurance,   all   of   which   the   Bank

                acknowledges it has previously received.

 

                                       15

<PAGE>

 

          (i)   Environmental   audits   of the   properties   described   in the   CBL

               Mortgage.

 

          (j)   Current   surveys of the   property   subject   to the CBL   Mortgage,

               indicating   the   location   of   all   building    lines,    easements

               (visible,   reflected in the public   records or otherwise) and any

               existing   improvements   or   encroachments,    which   survey   shall

               contain   no set of facts   objectionable   to the Bank and shall be

               accompanied by the Bank's usual survey certificate.

 

          (k)   Copies of the appraisals of the real estate   described in Exhibit

                "A" attached hereto.

 

          (l)   The   Guaranty    Agreements   of   the   Borrower    guarantying    the

               indebtedness   evidenced by the Lakeshore   Note and the Lakes Mall

               Note and of CBL Properties, Inc. guarantying the Loan.

 

          (m)   All the items and information shown on the Checklist for Closing,

               a copy of which is attached hereto and marked Exhibit "D".

 

4.2 Conditions Precedent to All Revolving Credit Loan Advances. The obligation

of the Bank to make Revolving Credit Advances pursuant hereto (including the

initial advance at the Closing Date) shall be subject to the following

additional conditions precedent:

 

          (a)   The Borrower shall have   furnished to the Bank a written   request

                stating the amount of Revolving Credit Advance requested together

               with the intended use of the advance.

 

          (b)   The Borrower and all Related   Entities shall not be in default of

               any of the terms and   provisions   hereof or of any   instrument or

               document now or at any time hereafter   evidencing or securing all

               or any part of the Revolving Credit Loan indebtednesses.   Each of

               the Warranties and Representations of the Borrower, Lakeshore and

               Lakes Mall,   as set out in Section 5 hereof shall remain true and

               correct   in all   material   respects   as of the date of such   Loan

               advance.

 

          (c)   Within forty-five (45) days after each July 1, January 1, April 1

               and October 1,   Borrower   shall furnish to the Bank a Non-Default

               Certificate executed by a duly authorized officer of Borrower, in

               the form of Exhibit "E" attached hereto.

 

           (d)   If required by the Bank, the Borrower shall have furnished to the

               Bank an