AMENDED AND RESTATED LOAN AGREEMENT

 

                                                                    Exhibit 10.1

 

 

                       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 December 30, 2004 between the undersigned

                 Borrower, Lakeshore, Lakes Mall and the Bank.)

 

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

March 9, 2005 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 One Hundred Million Dollars ($100,000,000.00) 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) increase the loan

from Eighty Million   Dollars   ($80,000,000.00)   to One Hundred   Million   Dollars

($100,000,000.00); (b) change certain financial covenants; and (c) to extend the

maturity date of the Loan to June 1, 2007.

 

     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:

 

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     "Adjusted Asset Value" means, as of a given date, the sum of: (a)(i) EBITDA

attributable   to malls and power   centers for the fiscal   quarter most   recently

ended times (ii) 4; divided by (iii) 8.25% plus (b)(i)   EBITDA   attributable   to

all other   assets for the   fiscal   quarter   most   recently   ended   times (ii) 4;

divided   by   (iii)   9.25%.   In   determining   Adjusted   Asset   Value   (i)   EBITDA

attributable to real estate properties acquired during such fiscal quarter,   and

EBITDA attributable to Properties development of which was completed during such

fiscal quarter,   shall be disregarded,   (ii) EBITDA attributable to any Property

which is currently under   development   shall be excluded,   (iii) with respect to

any   Subsidiary   that is not a Wholly   Owned   Subsidiary,   only   the   Borrower's

Ownership Share of the EBITDA attributable to such Subsidiary shall be used when

determining   Adjusted Asset Value,   and (iv) 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   quarterly   basis   in a   manner

consistent with the Parent's   method of reporting of segment   information in the

notes to its financial   statements   for the fiscal   quarter ended   September 30,

2004 as filed with the   Securities and Exchange   Commission,   and otherwise in a

manner   reasonably   acceptable   to the   Bank.   In   addition,   in the case of any

operating Property acquired in the immediately preceding period of eighteen (18)

consecutive   months for a purchase price indicative of a capitalization   rate of

less than 8.25%, EBITDA attributable to such Property shall be excluded from the

determination of Adjusted Asset Value.

 

     "Adjusted   Loan Amount" means the lesser of (a) 75% of the Appraised   Value

the real estate and improvements described in the Mortgages (excluding the Lakes

Mall   Mortgage),   plus 67.5% of the value of the real   estate   and   improvements

described in the Lakes Mall Mortgage;   or (c) the Permanent Loan Estimate of all

Collateral Properties; or (c) $100,000,000.00.

 

     "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.

 

                                       2

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     "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   Five   Million   and NO/100

Dollars ($25,000,000.00).

 

     "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

fifty hundredths percent (5.50%) per annum.

 

     "Borrower" has the meaning set forth in the   introductory   paragraph hereof

and shall include the 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 the 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 the 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 It's 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, 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,   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 Parent

 

 

                                       3

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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 the Bank's Liens in any of the Collateral.

 

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

 

     "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 among the Borrower, Wells Fargo and others.

 

     "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 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,   net income   (loss) of the 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 the Borrower for such period;

 

     (b) interest   expense for such period less   interest   expense   allocable to

minority interest in Subsidiaries of the Borrower for such period;

 

     (c) minority interest in earnings of the Borrower for such period;

 

     (d) extraordinary and nonrecurring net gains or losses (other than gains or

 

 

                                       4

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losses from the sale of   outparcels of   Properties)   for such period and expense

relating to the extinquishments 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 the Parent or any Subsidiary in such period;

 

     (g) income tax expense in respect of such period;

 

      (h) the Parent's   Ownership Share of depreciation and amortization   expense

and other non-cash charges of   Unconsolidated   Affiliates of the Parent for such

period; and

 

     (i) the   Parent's   Ownership   Share of interest   expense of   Unconsolidated

Affiliates of the Parent for such period; and; 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)

 

 

                                       5

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any of the   foregoing   of   other   Persons,   the   payment   of which   such   Person

Guaranteed or is otherwise recourse to such Person.

 

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

an amount equal to (a) income   (loss) from   operations   of Borrower,   Parent 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" 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 the   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 the fiscal   quarter   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

the Parent's   Ownership Share of all   construction in process of   Unconsolidated

Affiliates of the Parent);

 

     (d) the book value of all   unimproved   real   property of the Parent and its

Subsidiaries determined on a consolidated basis;

 

     (e) the   purchase   price   paid by the   Parent or any   Subsidiary   (less any

amounts paid to the 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 the Parent for:

 

          (i) any Property (other than a property under development) acquired by

          the Parent or such Subsidiary   during the Parent's fiscal quarter most

          recently ended; and

 

                                        6

<PAGE>

 

          (ii) any   operating   Property   acquired in the   immediately   preceding

          period of   eighteen   (18)   consecutive   months   for a   purchase   price

          indicative of a capitalization rate of less than 8.25%; provided, that

          if the 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 the 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 $1,000,000,000.00;

 

     (f) with   respect to any   purchase   obligation,   repurchase   obligation   or

forward commitment evidenced by a binding contract included when determining the

Total Liabilities of the Parent and its Subsidiaries,   the reasonably determined

value   of   any   amount   that   would   be   payable,   or   property   that   would   be

transferable,   to the 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 the Borrower or an   Unconsolidated   Affiliate of the

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 the Borrower

          or a Subsidiary   of the   Borrower or by resort to such real   property,

          then the Borrower or a Subsidiary of the Borrower shall   automatically

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

          Equity   Interests   in   such   JV   not   owned   by   the   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.

 

                                       7

<PAGE>

 

     "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 the

Borrower   shall   be   excluded   from   Interest   Expense   of the   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

 

 

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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.

 

     "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.

 

     "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 the Bank to the Borrower.

 

                                       9

<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.

 

     "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 the   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

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.

 

     "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.

 

                                       10

<PAGE>

 

     "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" or "Notes" means the revolving credit notes executed by the Borrower

to   the   Bank   in   the   original   principal   sums   of   Fifteen   Million   Dollars

($15,000,000.00) (the "$15,000,000.00 Note"), of Twenty Six Million Five Hundred

Thousand   and   No/100   Dollars   ($26,500,000.00)   (the   "$26,500,000.00   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.

 

     "Off-Balance   Sheet   Liabilities"   means liabilities and obligations of the

Parent,   the   Borrower,   any   Subsidiary   or any   other   Person   in   respect   of

"off-balance sheet arrangements" (as defined in the SEC Off-Balance Sheet Rules)

which the Parent would be required to disclose in the   "Management's   Discussion

and Analysis of Financial   Condition and Results of   Operations"   section of the

Parent's   report   on Form 10-Q or Form   10-K (or   their   equivalents)   which the

Parent would be required to file with the Securities and Exchange Commission (or

any Governmental   Authority substituted   therefor).   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 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 the   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,   AmSouth 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 (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, as of the date of

this Loan   Agreement,   shall be equal to Twenty Five Million and NO/100   Dollars

($25,000,000.00) divided by One Hundred Million Dollars ($100,000,000.00).

 

                                       11

<PAGE>

 

     "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     Million    Dollars

($100,000,000.00).

 

     "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 Million Dollars ($100,000,000.00).

 

     "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   Million   Dollars

($100,000,000.00).

 

     "Participants' Proportionate Share" means Participant's Proportionate Share

(M&T), Participant's Proportionate Share (Compass),   Participant's Proportionate

Share   (AmSouth)   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 of even date herewith among Bank, M&T,   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.

 

     "Permanent Loan Estimate" means, as of any date of   determination   and with

respect to any   Collateral   Property,   an amount equal to (a) the 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 average rate   published in the United States   Federal   Reserve

Statistical Release (1-1.15) for 10-year Treasury Constant Maturities during the

previous four fiscal quarters plus 1.5%.

 

     "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;

 

     (a) 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;

 

                                       12

<PAGE>

 

     (b) 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;

 

     (c) 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;

 

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

writing; and

 

     (e) 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

 

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

Section 7.12 hereof,   means the real estate projects owned by Borrower, a Wholly

Owned   Subsidiary   or, to the extent   approved   by the Bank,   any other   Person.

"Project" shall also mean any one of the Projects.

 

     "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.

 

      "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.

 

     "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.

 

     "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.

 

                                       13

<PAGE>

 

     "Tangible Net Worth" means, as of a given date, the stockholders' equity of

the Parent and its   Subsidiaries   determined   on a   consolidated   basis plus (x)

increases in accumulated   depreciation   accrued after September 30, 2004 and (y)

minority interests in the Borrower minus (to the extent reflected in determining

stockholders' equity of the 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,   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,   2007,   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.

 

     "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 the   Borrower's   Ownership

Share of such   Subsidiary   (unless the Borrower or a Wholly Owned   Subsidiary of

the 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

 

                                       14

<PAGE>

 

          (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 the Parent's Form 10-Q or Form 10-K (or

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

Governmental   Authority   substituted   therefor)   shall not be   included as Total

Liabilities.

 

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

the Bank, as amended from time to time.

 

     "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 Realty Advisors   Funding,   Incorporated,   a

Colorado corporation.

 

     "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.

 

                                       15

<PAGE>

 

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   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 Million Dollars   ($100,000,000.00);   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 any of the Notes,

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   One    Hundred    Million    Dollars

($100,000,000.00),   in form   substantially   the same as the   copy of the   Notes,

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   April 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 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   twenty four (24) hours 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%).

 

                                       16

<PAGE>

 

     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 Two

Hundred   Thousand   and   NO/100   Dollars    ($200,000.00).    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 Thirty Six   Thousand   and NO/100

Dollars   ($36,000.00)   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.

 

     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   of this Loan   Agreement,   without   penalty,   borrow,   repay and

reborrow   amounts under the Notes,   and   principal   payments   received   shall be

applied by the Bank to the Notes 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

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 Cap On Loan.   Notwithstanding anything contained in this Loan Agreement

to the   contrary,   if the Borrower does not have   outstanding   the sum of Thirty

Five Million Four Hundred   Thousand   Dollars   ($35,400,000.00)   evidenced by the

Lakeshore Note and the $15,000,000.00   Note secured by the Lakeshore Mortgage at

all times while the Loan is outstanding,   the Loan shall be capped at Sixty Four

Million Six Hundred Thousand Dollars ($64,600,000.00).

 

     2.8 Secondary   Financing by Parent Parent was formerly the general   partner

of the Borrower.   It is also a real estate investment trust. In the event Parent

does any additional offering of its securities, if required by the Bank, it will

 

 

                                        17

<PAGE>

 

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.

 

     2.9 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.   The letters of

credit   shall not have an expiry   date   beyond the   maturity   date of the Notes.

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 the 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,   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