EXHIBIT 10.20.5

 

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 16, 2005, among
the undersigned Borrower, Lakeshore/Sebring Limited Partnership,

The Lakes Mall, LLC and the Bank.)

THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") is made as of June
____, 2006, 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 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 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. Manufacturers
and Traders Trust Company, 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) release certain
collateral currently securing the Loan, more specifically, Pemberton Square Mall
and Lakeshore Mall; (b) add substitution collateral to secure the Loan, more
specifically, College Square; and (c) extend the Termination Date of the
Revolving Credit Loan by an additional year to June 1, 2008.

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

 

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AGREEMENTS

SECTION 1: DEFINITIONS AND ACCOUNTING TERMS

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

"Adjusted Asset Value" means, as of a given date, the sum of: (a)(i) EBITDA
attributable to malls, power centers and all other assets for the fiscal quarter
most recently ended times (ii) 4; divided by (iii) 7.25%. 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, 2005 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 7.25%, EBITDA attributable to
such Property shall be excluded from the determination of Adjusted Asset Value,
if that particular operating Property is valued in Parent’s financial statement
at its purchase price.

"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

 

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intent owning such a ten percent (10%) or greater interest in a Person shall not
be deemed an Affiliate of such Person unless such pension, mutual, endowment or
similar fund either (i) owns fifty percent (50%) or more of the Capital Stock or
other ownership interest in such Person, or (ii) has the right or power to
select one or more members of such Person's board of directors or other
governing body.

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

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

"Bank's Proportionate Share" means 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 seven percent
(7.00%) 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.

 

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

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

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

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

 

 

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(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 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.

 

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

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

"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

 

 

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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

 

(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 7.25%; 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 $2,000,000,000.00;

 

(f)        with respect to any purchase obligation, repurchase obligation or
forward commitment evidenced by a binding contract included when determining the
Total Liabilities of 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

 

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constituting a guaranty, the practical effect of which is to assure the payment
or performance (or payment of damages in the event of nonperformance) of any
part or all of such obligation.

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

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

 

 

(a)

all obligations of such Person in respect of money borrowed;

 

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

 

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

 

 

(ii)

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

 

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

 

 

(c)

capitalized lease obligations of such Person;

 

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

 

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

 

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

 

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

 

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

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

 

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

"Lakes Mall Note" means the revolving credit 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.

 

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"Loan Agreement" means this Loan Agreement among the Borrower, 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.

 

 

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"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 (i) the revolving credit note executed by the Borrower
to the Bank in the original principal sum of Sixty One Million Nine Hundred
Thousand and No/100 Dollars ($61,900,000.00) (the "$61,900,000.00 Note"), and
(ii) 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

 

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Five Million and NO/100 Dollars ($25,000,000.00) divided by One Hundred Million
Dollars ($100,000,000.00).

"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, 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;

 

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(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 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.

 

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"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, 2008, 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

 

 

(i)

to secure obligations to municipalities to perform work in connection with

 

 

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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.

1.2Accounting 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.

 

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

2.1The 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 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.

2.2Funding 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. 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.

2.3The Note and Interest. The Revolving Credit Loan shall be evidenced by one
(1) promissory note of the Borrower 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 June 1, 2006.
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 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 and Lakes Mall (but the rate selected by 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 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
½%).

2.4Commitment Fee/Servicing Fee. On the prior Closing Date (June ___, 2006), the
Borrower and Lakes Mall paid 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

 

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Dollars ($200,000.00). In addition to the commitment/extension fee, on each June
1 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 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.

2.5Borrowings 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 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.

2.6Substitution 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

Intentionally Deleted.

2.8Secondary 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
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 Lakes Mall.

2.9Issuance 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

 

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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.

3.1Required 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 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 One Hundred Million Dollars ($100,000,000.00) 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.

3.2Place 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.

3.3Payment 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

4.1Conditions Precedent to Closing and Funding Initial Advance. The obligation
of the Bank to fund the initial Revolving Credit Loan Advance after the date of
this Loan Agreement 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 Notes.

 

 

 

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(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.

(e)  Copies of the limited partnership agreements, certificates of limited
partnership, charters, bylaws, articles of organization and operating agreements
for all Loan Parties and Related Entities (which the Bank acknowledges it has
previously received), and all amendments thereto, and current certificates of
existence and certificates of authority for all Loan Parties and Related
Entities.

(f)   Copies of corporate resolutions of Borrower's general partner, and all
Loan Parties and Related Entities.

(g)  The opinion of counsel for all Loan Parties and Related Entities, that the
transactions herein contemplated have been duly authorized by all requisite
corporate, partnership and/or limited liability company 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.

 

(i)

Environmental audits of the properties described in the CBL Mortgage.

(j)   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
surveys 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 Lakes Mall Note and of Parent guarantying the Loan (the
"Guaranty Agreements").

(m)All the items and information shown on the Checklist for Closing, a copy of
which is attached hereto and marked Exhibit "D".

4.2Conditions 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:

 

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(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.

(c)  Each of the Warranties and Representations of the Borrower 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.

 

(d)

Each Guaranty Agreement shall be and remain in full force and effect.

(e)  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.

(f)   If required by the Bank, the Borrower shall have furnished to the Bank an
updated and current title report with respect to the property or properties
covered by any CBL Mortgage held by the Bank. If any lien shall have been placed
on the property subsequent to the date of this Loan Agreement or the applicable
CBL Mortgage, other than liens in favor of the Bank, no additional advances
shall be made.

SECTION 5: REPRESENTATIONS AND WARRANTIES

Borrower and Lakes Mall represent and warrant that:

5.1Partnership/Limited Liability Company Status. The Borrower is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Delaware; it has the power and authority to own its properties
and assets and is duly qualified to carry on its business in every jurisdiction
wherein such qualification is necessary. Lakes Mall is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Michigan; it has the authority to own its properties and assets and
is duly qualified to carry on its business in every jurisdiction wherein such
qualification is necessary. CBL Morristown, Ltd. is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Tennessee; it has the authority to own its properties and assets and is duly
qualified to carry on its business in every jurisdiction wherein such
qualification is necessary. Lakes Mall is a ninety percent (90%) owned
subsidiary of the Borrower. Walnut Square Associate Limited Partnership is a
wholly owned subsidiary of the Borrower. Towne Mall is a wholly owned subsidiary
of the Borrower. CBL Morristown, Ltd. is a wholly owned subsidiary of the
Borrower.

5.2Power and Authority. The execution, delivery and performance of the Loan
Agreement, the Notes, the CBL Mortgage and the other loan and collateral
documents executed pursuant hereto by the Borrower and all Related Entities have
been duly authorized by all requisite action and, to the best of Borrower's and
Lakes Mall's knowledge, will not violate any provision of law, any order of any
court or other agency of government, the limited partnership

 

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agreements, charter, bylaws or limited liability company agreements of the
Borrower, Lakes Mall, or any Related Entity, any provision of any indenture,
agreement or other instrument to which Borrower, Lakes Mall, or any Related
Entity is a party, or by which Borrower's, Lakes Mall's and all Related
Entities' respective properties or assets are bound, or be in conflict with,
result in a breach of, or constitute (with due notice or lapse of time or both)
a default under any such indenture, agreement or other instrument, or result in
the creation or imposition of any lien, charge or encumbrance of any nature
whatsoever upon any of the properties or assets of Borrower, Lakes Mall, or any
Related Entities, except for liens and other encumbrances provided for and
securing the indebtedness covered by this Loan Agreement.

 

5.3

Financial Condition.

(a)  (i) Parent and Borrower's consolidated balance sheets (which includes Lakes
Mall) for the fiscal year ended as of December 31, 2005, and the related
consolidated statements of operations and Consolidated statements of cash flows
for the year then ended filed with the SEC in the Forms 10-Q and 10-K, and (ii)
the unaudited interim consolidated balance sheet of Borrower and Lakes Mall for
March 31, 2006, and the related consolidated statements of operations and
consolidated statements of cash flows for the period then ended, a copy of each
of which has been furnished to the Bank, together with any explanatory notes
therein referred to and attached thereto, are correct and complete and fairly
present the financial condition of Parent, Borrower and Lakes Mall as at the
date of said balance sheets and the results of its operations for said periods
and as of the date of closing of this Loan Agreement and related transactions,
respectively. All such financial statements have been prepared in accordance
with GAAP applied on a consistent basis maintained through the period involved.

(b) Since March 31, 2006, there has been no substantial adverse change in the
business, properties, condition (financial or otherwise), or results of
operations of Borrower and/or Lakes Mall.

(c)  (i) The audited balance sheet of Parent for the fiscal year ended on
December 31, 2005, the unaudited balance sheet of Parent for the period ended
March 31, 2006, and the related statements of operations and of cash flows for
the year ended 2005 and the period ended March 31, 2006, a copy of which has
been furnished to the Bank, together with any explanatory notes therein referred
to and attached thereto, are correct and complete and fairly present the
financial condition of Parent as at the date of said balance sheets and the
results of its operations for said periods and as of the date of closing of this
Loan Agreement and related transactions, respectively. All such financial
statements have been prepared in accordance with GAAP applied on a consistent
basis maintained through the period involved.

(d) Since March 31, 2006, there has been no substantial adverse change in the
business, properties, condition (financial or otherwise), or results of
operations of Parent.

(e)  The warranties and representations made in this Section 5.3 are and were
made as of the date of this Loan Agreement and any violation thereof shall be
determined as of that date.

5.4Title to Assets. Borrower and all Related Entities have good and marketable
title to all its properties and assets reflected on the most recent balance
sheet furnished to Bank

 

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subject to the Permitted Encumbrances with respect to the properties described
in the CBL Mortgages and subject to all encumbrances, whether of record or not,
with respect to all other properties.

5.5Litigation. There is no action, suit or proceeding at law or in equity or by
or before any governmental instrumentality or other agency now pending, or, to
the knowledge of the Borrower and Lakes Mall threatened against or affecting
Borrower or any Related Entity, or any properties or rights of Borrower or any
Related Entities, which, if adversely determined, would materially adversely
affect the financial or any other condition of Borrower or any Related Entity
except as set forth in Exhibit "F" attached hereto.

5.6Taxes. Borrower and Lakes Mall have filed or caused to be filed all federal,
state or local tax returns which are required to be filed, and has paid all
taxes as shown on said returns or on any assessment received by it, to the
extent that such taxes have become due, except as otherwise permitted by the
provisions hereof.

5.7Contracts or Restrictions. In Borrower's and Lakes Mall's opinions, Borrower,
Lakes Mall and the Related Entities are not a party to any agreement or
instrument or subject to any partnership agreement or limited liability company
or corporate restrictions adversely affecting its business, properties or
assets, operations or condition (financial or otherwise) other than this Loan
Agreement, other bank loan or property partnership agreements that contain
certain restrictive covenants or other agreements entered into in the ordinary
course of business.

5.8No Default. No Event of Default (as defined herein) has occurred and not been
waived under any agreement or instrument to which it is a party beyond the
expiration of any applicable notice and cure period, which default if not cured
would materially and substantially affect the financial condition, property or
operations of the Borrower or any Related Entity. For the purposes of this
Paragraph 5.8, monetary defaults specifically excepted under the provisions of
Paragraph 8.2 (which excludes non-recourse debt) below shall not be deemed
material defaults.

5.9Patents and Trademarks. Borrower and all Related Entities possess all
necessary patents, trademarks, trade names, copyrights, and licenses necessary
to the conduct of its businesses.

5.10ERISA. To the best of Borrower's and Lakes Mall's knowledge and belief,
Borrower, Lakes Mall and all Related Entities are in compliance with all
applicable provisions of the Employees Retirement Income Security Act of 1974
("ERISA") and all other laws, state or federal, applicable to any employees'
retirement plan maintained or established by it.

5.11Hazardous Substances. To the best knowledge of Borrower and Lakes Mall, no
Hazardous Substances are unlawfully located on or have been unlawfully stored,
processed or disposed of on or unlawfully released or discharged (including
ground water contamination) from any property owned by Borrower, Lakes Mall
and/or any Related Entity which is encumbered by the CBL Mortgage and no above
or underground storage tanks exist unlawfully on such property. No private or
governmental lien or judicial or administrative notice or action related to
Hazardous Substances or other environmental matters has been filed against any

 

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property which, if adversely determined, would materially adversely affect the
business, operations or the financial condition of Borrower, Lakes Mall and/or
any Related Entity except as set forth in Exhibit "F" attached hereto.

5.12Ownership of Borrower. As of the date hereof, CBL Holdings I owns an
approximate 1.612% general partner interest in the Borrower and CBL Holdings II
owns a 52.92% limited partner interest in the Borrower. As of the date hereof,
Parent does not own a direct interest in Borrower; however, it owns 100% of the
stock of CBL Holdings I and CBL Holdings II. As of the date hereof, Parent and
its affiliates, officers and key employees own an approximate 15.68% limited
partner interest in the Borrower. As of the date hereof, CBL & Associates
Management, Inc. owns no interest in the Borrower. As of the date hereof,
Richard E. Jacobs Group, Inc. owns an approximate 21.41% limited partner
interest in the Borrower and other investors own an approximate 8.93% limited
partner interest in the Borrower The Borrower has no other general partners. As
of the date hereof the Borrower and its Affiliates own 100% of the partnership
interests in Walnut Square Associates Limited Partnership, Towne Mall and CBL
Morristown, Ltd. and 90% of the limited liability company interests of Lakes
Mall.

 

5.13

Intentionally Deleted.

5.14Outstanding Balance on Lakes Mall Note. As of the date hereof, the
outstanding unpaid principal balance of the Lakes Mall Note is $26,600,000.00
and the undisbursed amount of the Lakes Mall Note is $11,500,000.00 and no
defenses or offsets exist against the holder of the Lakes Mall Note or
otherwise.

5.15Outstanding Balance on $61,900,000 Note. As of the date hereof, the
outstanding unpaid principal balance of the notes replaced by the $61,900,000.00
Note is $38,702,600.00 and the undisbursed amount of the $61,900,000.00 Note is
$23,197,400.00 and no defenses or offsets exist against the holder of the
$61,900,000.00 Note or otherwise.

 

5.16

Intentionally Deleted.

5.17Anti-Terrorism. Neither Parent, Borrower nor any of their Subsidiaries nor
any Related Entity is or has been designated, or is owned or controlled by, a
“suspected terrorist” as defined in Executive Order 13224, which prohibits
transactions with terrorists and terrorist organizations.

SECTION 6: AFFIRMATIVE COVENANTS OF BORROWER AND LAKES MALL

Borrower and Lakes Mall covenant and agree that from the date hereof and until
payment in full of the principal of and interest on indebtednesses evidenced by
the Notes, unless the Bank shall otherwise consent in writing, such consent to
be at the discretion of the Bank, Borrower and Lakes Mall will and will cause
all Related Entities to:

6.1Business and Existence. Perform all things necessary to preserve and keep in
full force and effect its existence, rights and franchises, comply with all laws
applicable to it and continue to conduct and operate its business in a sound and
prudent manner.

 

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6.2Maintain Property. Maintain, preserve, and protect all leases, franchises,
and trade names and preserve all of its properties used or useful in the conduct
of its business in a sound and prudent manner, keep the same in good repair,
working order and condition, ordinary wear and tear excepted, and from time to
time make, or cause to be made, all needed and proper repairs, renewals,
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly conducted at all times.

 

6.3

Insurance.

(a)  With respect to all of the Property which serves as collateral for the
Loan, at all times maintain in some company or companies (having a Best's rating
of A-:XI or better) approved by Bank:

(i)     Comprehensive public liability insurance covering claims for bodily
injury, death, and property damage, with minimum limits satisfactory to the
Bank, but in any event not less than those amounts customarily maintained by
companies in the same or substantially similar business;

(ii)    Business interruption insurance and/or loss of rents insurance in a
minimum amount specified by Bank, with loss payable clause in favor of Bank;

(iii)   Hazard insurance insuring all the Property which serves as collateral
for the Loan against loss by fire (with extended coverage) and against such
other hazards and perils (including but not limited to loss by windstorm, hail,
explosion, riot, aircraft, smoke, vandalism, malicious mischief and vehicle
damage) as Bank, in its sole discretion, shall from time to time require, all
such insurance to be issued in such form, with such deductible provision, and
for such amount as shall be satisfactory to Bank, with loss payable clause in
favor of Bank. The Bank is hereby authorized and empowered, at its option, to
adjust or compromise any loss under any such insurance policies and to collect
and receive the proceeds from any such policy or policies as provided in the CBL
Mortgage; and

(iv)   Such other insurance as the Bank may, from time to time, reasonably
require by notice in writing to the Borrower and/or Lakes Mall.

(b) All required insurance policies shall provide for not less than thirty (30)
days' prior written notice to the Bank of any cancellation, termination, or
material amendment thereto; and in all such liability insurance policies, Bank
shall be named as an additional insured. Each such policy shall, in addition,
provide that there shall be no recourse against the Bank for payment of premiums
or other amounts with respect thereto. Hazard insurance policies shall contain
the agreement of the insurer that any loss thereunder shall be payable to the
Bank notwithstanding any action, inaction or breach of representation or
warranty by the Borrower or any Related Entity. The Borrower and Lakes Mall will
deliver to Bank original or duplicate policies of such insurance, or
satisfactory certificates of insurance, and, as often as Bank may reasonably
request, a report of a reputable insurance broker with respect to such
insurance. Any insurance proceeds received by Bank shall be applied upon the
indebtednesses, liabilities, and

 

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obligations of the Borrower or Lakes Mall to the Bank (whether matured or
unmatured) or, at Bank's option, released to the Borrower or Lakes Mall, as the
case might be.

6.4Obligations, Taxes and Liens. Pay all of its indebtednesses and obligations
in accordance with normal terms and practices of its business and pay and
discharge or cause to be paid and discharged all taxes, assessments, and
governmental charges or levies imposed upon it or upon any of its income and
profits, or upon any of its properties, real, personal or mixed, or upon any
part thereof, before the same shall become in default, as well as all lawful
claims for labor, materials, and supplies which otherwise, if unpaid, might
become a lien or charge upon such properties or any part thereof; provided,
however, that the Borrower and Related Entities shall not be required to pay and
discharge or to cause to be paid and discharged any such indebtedness,
obligation, tax, assessment, trade payable, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings
satisfactory to Bank, and Bank shall be furnished, if Bank shall so request,
bond or other security protecting it against loss in the event that such contest
should be adversely determined. In addition, Borrower and Lakes Mall shall
immediately pay, upon the request of the Bank, all mortgage and/or intangible
taxes and/or penalties payable to government officials with respect to any CBL
Mortgage and/or the Notes or, if Bank has elected to pay same, Borrower and
Lakes Mall shall immediately reimburse Bank therefor upon the request of the
Bank; provided, however Borrower and Lakes Mall shall not be required to pay so
long as Borrower, Lakes Mall or any Related Entity is contesting the tax and/or
penalties in good faith and through continuous and appropriate proceedings but
Borrower and Lakes Mall shall be required to reimburse to the extent Bank has
made any payment.

6.5Financial Reports and Other Data. Furnish to the Bank as soon as available:
(a) and in any event within ninety (90) days after the end of each fiscal year
of Borrower, an unqualified audit as of the close of such fiscal year of
Borrower, including a consolidated balance sheet and consolidated statements of
operations and consolidated statements of cash flows together with the
unqualified audit report and opinion of Deloitte & Touche, LP, Certified Public
Accountant, or other independent Certified Public Accountant which is widely
recognized and of good national repute or which is otherwise acceptable to the
Bank, showing the financial condition of Borrower at the close of such year and
the results of operations during such year; and, (b) within forty-five (45) days
after the end of each fiscal quarter, (i) consolidated financial statements
similar to those described above for Borrower and for Parent, not audited but
certified by the Chief Executive Officer or the Chief Financial Officer or
Controller or a Senior Vice President of Borrower and Parent, as the case may
be, such balance sheets to be as of the end of such quarter and such
consolidated statements of operations and consolidated statements of cash flows
to be for the period from the beginning of said year to the end of such quarter,
in each case subject only to audit and year-end adjustment and the preparation
of required footnotes; (ii) a Non-Default Certificate in the form prescribed on
Exhibit "E" attached hereto and made a part hereof; and (iii) a Borrowing Base
Certificate; and, (c) within forty-five (45) days after the end of each fiscal
quarter, rent rolls and operating statements related to the properties described
in the CBL Mortgage; and, (d) simultaneously with the inclusion of Net Operating
Income (loss) from Newly Acquired Property in any financial calculation provided
for in this Loan Agreement, certification, in a form acceptable to Bank, of the
purchase price for such Newly Acquired Property and a current rent roll and a
current income and expense statement, similar to those

 

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described above, not audited but certified by the Chief Financial Officer or
Controller of Borrower and Parent, as the case may be, such rent roll and
statement of income and expense to be for the twelve (12) month period, if
available, used in any such calculation and/or to also be for the period from
the beginning of said year to the end of such quarter, as the case may be.

6.6Additional Information. Furnish such other information regarding the
operations, business affairs and financial condition of the Borrower and all
Related Entities as Bank may reasonably request, including but not limited to
written confirmation of requests for loan advances, true and exact copies of its
books of account and tax returns, and all information furnished to the owners of
its partnership interests, or any governmental authority, and permit the copying
of the same, and Bank agrees that such information shall be maintained in strict
confidence unless it is publicly available and except that it may be disclosed
to any participants in the Loan and their counsel and Bank's counsel. Provided,
however, the Borrower and Lakes Mall shall not be required to divulge the terms
of other financing arrangements with other lending institutions if and to the
extent Borrower and/or Lakes Mall is prohibited by contractual agreement with
such lending institutions from disclosing such information with the exception
that Borrower and Lakes Mall shall promptly notify Bank in writing of all
defaults, if any, which exist beyond any applicable cure periods and the nature
thereof, which occur in connection with such financing arrangements and which
defaults or defaults would constitute an Event of Default hereunder. Borrower
and Lakes Mall shall not enter into any such contractual arrangement whereby the
Borrower or Lakes Mall is prohibited from disclosing such financial
arrangements, without providing Bank with written notice of the nature of such
prohibitions. In addition, Borrower and Lakes Mall shall not enter into any such
arrangement while any Event of Default hereunder exists beyond any applicable
cure periods.

6.7Right of Inspection. Permit any person designated by the Bank, at the Bank's
expense, to visit and inspect any of the properties, books and financial reports
of the Borrower and all Related Entities and to discuss its affairs, finances
and accounts with its principal officers, at all such reasonable times and as
often as a Bank may reasonably request provided that such inspection shall not
unreasonably interfere with the operation and conduct of Borrower's or any
Related Entity's properties and business affairs and provided further that such
person shall disclose such information only to the Bank, the Bank's appraisers
and examiners as required by banking laws, rules and regulations.

6.8Environmental Laws. Maintain at all times all property described in the CBL
Mortgage in compliance with all applicable Environmental Laws, and immediately
notify the Bank of any notice, action, lien or other similar action alleging
either the location of any Hazardous Substances or the violation of any
Environmental Laws with respect to any of such properties.

6.9Notice of Adverse Change in Assets. At the time of Borrower's and/or Lake
Mall's first knowledge or notice, immediately notify the Bank of any information
that may adversely affect in any material manner the properties of the Borrower
and/or any Related Entity which are subject to any CBL Mortgage.

6.10Appraisals. Upon the Bank's request, but no more frequently than once per
every eighteen (18) month period, allow appraisers employed by the Bank to make
updated

 

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reappraisals of the property or properties described in the CBL Mortgage, at the
Borrower's expense.

 

6.11

Intentionally Deleted.

6.12Agreements regarding Lakes Mall Note and Lakes Mall Mortgage. So long as no
Event of Default then exists or with notice or lapse of time would exist, upon
the request of the Borrower, but in the Bank's discretion, the Bank shall sell
to the Borrower and/or the Borrower's designated subsidiary, the Lakes Mall Note
and/or the Lakes Mall Mortgage for the balance due under the Lakes Mall Note
plus accrued interest. Any such sale would be without recourse, representation
and warranty.

6.13Notice of Event of Default. As soon as practicable, and in any event within
two (2) Business Days after a senior officer of Borrower or any Subsidiary
becomes aware of the existence of any condition or event which constitutes a
default or Event of Default, the Borrower shall provide telephonic notice to the
Bank specifying the nature and period of existence thereof, and, no more than
two (2) Business Days after such telephonic notice, written notice again
specifying the nature and period of existence thereof and specifying what action
Borrower is taking or proposes to take with respect thereto.

6.14REIT. Parent shall at all times maintain its status as a "real estate
investment trust" under the Internal Revenue Code.

SECTION 7: NEGATIVE COVENANTS OF BORROWER AND LAKES MALL

Borrower and Lakes Mall covenant and agree that at all times from and after the
Closing Date, unless the Bank shall otherwise consent in writing, such consent
to be at the discretion of the Bank, Borrower and Lakes Mall will not, and will
not allow any Related Entity, to either directly or indirectly:

7.1Minimum Tangible Net Worth. Permit Tangible Net Worth at any time to be less
than (i) $1,140,494,000.00 plus (ii) 50% of the Net Proceeds of all Equity
Issuances effected at any time after the Agreement Date by the Parent, Borrower
or any Subsidiaries to any Person other than the Parent or any of its
Subsidiaries.

7.2Ratio of Total Liabilities to Gross Asset Value. Permit the ratio of
(i) Total Liabilities of the Parent, Borrower and its Subsidiaries determined on
a consolidated basis to (ii) Gross Asset Value of the Parent, Borrower and any
Subsidiaries determined on a consolidated basis, to exceed 0.650 to 1.00 at any
time.

7.3Ratio of EBITDA to Interest Expense. Permit the ratio of (i) EBITDA of the
Parent, Borrower and the Subsidiaries determined on a consolidated basis for the
fiscal quarter most recently ending to (ii) Interest Expense of the Parent and
its Subsidiaries determined on a consolidated basis for such period, to be less
than 1.750 to 1.00.

7.4Ratio of EBITDA to Debt Service. Permit the ratio of (i) EBITDA of the
Parent, Borrower and the Subsidiaries determined on a consolidated basis for the
fiscal quarter most

 

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recently ending to (ii) Debt Service of the Parent, Borrower and the
Subsidiaries determined on a consolidated basis for such period, to be less than
1.550 to 1.00.

7.5Indebtedness. Incur, create, assume or permit to exist any indebtedness or
liability, secured by any of the properties described in the CBL Mortgage,
except, with respect to the Borrower only, for indebtedness, which is
subordinate in all respects to the indebtedness evidenced by the Notes which
indebtedness does not exceed Five Hundred Thousand Dollars ($500,000.00) in the
aggregate per property and is used for renovation, repair or improvement of the
property or properties described in the CBL Mortgage.

7.6Mortgages, Liens, Etc. Create, assume or suffer to exist any mortgage,
pledge, lien, charge or other encumbrance of any nature whatsoever on any of the
properties subject to the CBL Mortgage except:

 

(a)

Liens in favor of the Bank securing payment of the Notes;

 

 

(b)

Existing liens securing indebtednesses permitted under Section 7.5 above;

 

(c)

Permitted Encumbrances (as defined at Section 1); and

 

 

(d)

Liens securing indebtedness permitted under Section 7.5 above.

 

7.7Sale of Assets. Sell, lease, convert, transfer or dispose of all or a
substantial part of its assets for less than book value or for less than fair
market value, or, sell, lease, convert, transfer or dispose of all or a
substantial part of its assets, without the Bank's prior written consent, if
GAAP book value or fair market value exceeds 20% of the GAAP book value of all
of its assets at that time. In other words, the Borrower may sell its assets
without the Bank's consent so long as such sale is not more than 20% of the book
value of all of its assets and only so long as such sale does not cause the
Borrower to be in violation of any covenant in this Loan Agreement.

7.8Consolidation or Merger; Acquisition of Assets. Enter into any transaction of
merger or consolidation, acquire any other business or corporation, or acquire
all or substantially all of the property or assets of any other Person unless
the Borrower and/or its general partner shall be the surviving entities or the
transaction or acquisition is permitted by and effected in accordance with the
provisions of Section 7.12(b).

7.9Partnership Distributions and Other Payments. Except as hereinafter provided,
declare or pay, or set apart any funds for the payment of, any distributions on
any partnership, limited liability or corporate interest in Borrower or any
Related Entity or apply any of its funds, properties, or assets to or set apart
any funds, properties or assets for, the purchase or other retirement of or make
any other distribution (whether by reduction of capital or otherwise) in respect
of, any partnership, limited liability or corporate interest in Borrower or any
Related Entity; or without the consent of Bank, pay any fee or other
compensation of any nature to or for the benefit of CBL Holdings, and/or Parent
and/or their affiliates, officers or key employees (the "Distributees").
Notwithstanding anything stated in the foregoing to the contrary, as long as no
Event of Default then exists or would exist as a result of the following, (a)
Borrower may pay to

 

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such Distributees and its other partners quarterly distributions so long as such
distributions do not exceed in the aggregate 95% of Funds from Operations and
(b) Borrower may pay any fee or other reasonable compensation of any nature to
or for the benefit of (i) CBL & Associates Management, Inc., or (ii) any other
Distributee, which payment has been made in the ordinary course of business and
approved by the independent directors of CBL Holdings. Borrower may make a
distribution from Loan proceeds but only once during any rolling twelve (12)
month period and provided Borrower is not in default hereunder and such
distribution will not create a default hereunder. Notwithstanding anything
contained in the foregoing to the contrary, the restriction on distributions
shall not preclude the Parent from making the minimum distributions (as that
term is used in the Internal Revenue Code) required to maintain REIT status
under the Internal Revenue Code.

7.10Loans to Officers and Employees. Permit or allow loans to officers and
employees of Borrower or any Related Entity or holders of partnership interests
in Borrower to exceed $500,000.00 in any one instance or $2,000,000.00 in the
aggregate, provided that nothing in the foregoing shall be deemed to limit loans
made in the ordinary course of business to CBL & Associates Management, Inc..

7.11Limitations on Actions Against Bank and Participants. Take any action
against:

(a)  Bank, if any Participant fails or refuses to fund pursuant to the terms of
the Participation Agreement to Bank for the benefit of Borrower and/or Lakes
Mall, such Participant's Proportionate Share of the amount the Bank is obligated
to advance hereunder and such failure or refusal has not been caused by Bank's
breach of this Loan Agreement or the Participation Agreement; or

(b) any Participant, if Bank fails or refuses to fund for the account of
Borrower and/or Lakes Mall any Participant's Proportionate Share of the amount
the Bank is obligated to advance hereunder, to the extent such Participant's
Proportionate Share has been received by Bank; or

(c)  any Participant, if such Participant fails or refuses to fund to Bank for
the benefit of Borrower and/or Lakes Mall, such Participant’s Proportionate
Share of the amount the Bank is obligated to advance hereunder and such failure
or refusal is not a breach of the Participation Agreement; or

(d) any Participant, if Bank fails or refuses to fund for the account of
Borrower and/or Lakes Mall Bank's Proportionate Share. Borrower's and Lake
Mall's cause of action under this Loan Agreement, if any, for failure to fund
being directly against the lender which fails or refuses to fund, and then only
if such failure or refusal to fund would constitute a breach of this Loan
Agreement or, with respect to the Participants, the Participation Agreement.

 

7.12

Investment Concentration.

(a)  Borrower shall not make, and shall not permit any of its Subsidiaries to
make, any Investment in the following items which would cause the value of such
holdings of Borrower and/or Subsidiaries to exceed the following percentages of
Borrower's Tangible Net Worth:

 

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(i)     raw land, such that the aggregate book value of all such raw land (other
than: (A) raw land subject to a ground lease under which Borrower is the
landlord and a Person not an Affiliate of Borrower is the tenant; (B) land on
which the development of a Project has commenced; (C) land subject to a binding
contract of sale under which Borrower or one of its Subsidiaries is the seller,
the buyer is not an Affiliate of Borrower and (D) out-parcels held for lease or
sale) exceeds ten percent (10%) of Tangible Net Worth;

(ii)    developed real estate used primarily for non-retail purposes, such that
the aggregate book value of such real estate (other than the real estate located
at 2030 Hamilton Place Boulevard, Chattanooga, Tennessee and a small office
building located at Richland Mall in Waco, Texas) exceeds ten percent (10%) of
Tangible Net Worth;

(iii)   Capital Stock of any Person, such that the aggregate value of such
Capital Stock in Unconsolidated Affiliates other than CBL & Associates
Management, Inc., calculated on the basis of the lower of cost or market,
exceeds ten percent (10%) of Tangible Net Worth;

(iv)   Mortgages, such that the aggregate principal amount secured by Mortgages
acquired by Borrower after the Effective Date exceeds ten percent (10%) of
Tangible Net Worth, except for mortgages held by Mortgage Holdings, LLC (on real
estate owned by Borrower or any entity related to Borrower) for the purpose of
avoiding mortgage taxes and title charges and mortgages granted upon the sale of
assets as more particular set out in Borrower's 10k;

(v)    Investments made after the date hereof in partnerships, joint ventures
and other non-corporate Persons accounted for on an equity basis (determined in
accordance with GAAP), such that the aggregate outstanding amount of such
Investments (other than Investments in partnerships in which (A) Borrower is the
sole general partner and the only limited partners are either (i) the Person
from whom the real estate owned by such partnership was purchased, and such
Person's successors and assigns or (ii) a Person operating stores which anchor
the development constructed or to be constructed by such partnership or (B)
Borrower owns not less than ninety percent (90%) of the partnership interests
and has the unilateral right to make all operational and strategic decisions)
exceeds ten percent (10%) of Tangible Net Worth.

(b) Neither Borrower nor any of its Subsidiaries shall acquire the business of
all or substantially all of the assets or stock of any Person, or any division
of any Person, whether through Investment, purchase of assets, merger or
otherwise; provided that Borrower or its Subsidiaries may make such an
acquisition so long as Borrower has delivered to Bank, not less than thirty (30)
days prior to the date such acquisition is consummated, (i) all information
related to such acquisition as is reasonably requested by the Bank and (ii) a
certificate, signed by the chief financial officer of Borrower, certifying that,
giving effect to such acquisition, there shall not exist any Default or Event of
Default hereunder and setting forth in reasonable detail the calculations
setting forth, on a pro forma basis giving effect such acquisition, Borrower's
compliance with the loan documents which exist between Borrower and Bank.

 

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SECTION 8: EVENTS OF DEFAULT

An "Event of Default" shall exist if any of the following shall occur:

8.1Payment of Principal, Interest to Bank. The Borrower and/or Lakes Mall
defaults in the payment as and when due of principal or interest on any Note or
any fees due under this Loan Agreement which default shall continue for more
than ten (10) days following mailing of notice from Bank to Borrower and/or
Lakes Mall thereof; or the Borrower and/or Lakes Mall defaults in the payment
when due of any other recourse indebtednesses, liabilities, or obligations to
the Bank beyond the expiration of any applicable notice and cure period, whether
now existing or hereafter created or arising; direct or indirect, absolute or
contingent provided however, there shall be no notice requirement or cure
periods if this Note has matured; or

8.2Payment of Obligations to Others. The Borrower, Lakes Mall or any Related
Entity defaults in the payment as and when due of any other recourse
indebtedness or obligation for borrowed money owed to a lender other than Bank
or to Bank unrelated to the Loan, but only if the effect of such default causes
the holder of any other recourse indebtedness or obligation (after expiration of
any applicable cure period) to accelerate the maturity of such indebtedness or
obligation prior to the stated maturity date of such indebtedness or obligation;
provided however, the Borrower, Lakes Mall and the Related Entity will not be
considered in default hereunder if: (a) the monetary payment default is less
than One Million Dollars ($1,000,000.00) and is not a failure to pay a regular
monthly, quarterly or other periodic installment payment of principal and/or
interest or interest only, as the case may be, on the due date [subject to any
applicable grace or cure period and specifically excluding any regularly
scheduled balloon payment not paid in full within sixty (60) days of the actual
due date of the balloon payment unless the lender has issued a notice of default
with respect to such balloon payment] or (b) such default is being contested by
the Borrower, Lakes Mall or the Related Entity in good faith through appropriate
proceedings reasonably acceptable to Bank; or

8.3Performance of Obligations to Bank. The Borrower, Lakes Mall or any Related
Entity defaults with respect to the performance of any non-monetary obligation
incurred in connection with the Loan and such default continues for more than
thirty (30) days following mailing of notice thereof from Bank to Borrower,
Lakes Mall and/or the Related Entity, as the case may be, or, if such default is
incapable of cure within such thirty (30) day period, Borrower, Lakes Mall
and/or the Related Entity, as the case may be, fails to diligently, continuously
and in good faith pursue such cure to completion; or the Borrower, Lakes Mall
and/or the Related Entity, as the case may be, defaults with respect to the
performance of any other non-monetary obligation incurred in connection with any
recourse indebtedness for borrowed money owed to the Bank in connection with the
Loan and such default continues for more thirty (30) days following mailing of
notice thereof from Bank to Borrower, Lakes Mall and/or the Related Entity, as
the case may be, or, if such default is incapable of cure within such thirty
(30) day period, Borrower, Lakes Mall and/or the Related Entity fails to
diligently, continuously and in good faith pursue such cure to completion; or

8.4Performance of Obligations to Others. An event of default occurs with respect
to the performance of non-monetary obligations incurred in connection with any
recourse indebtedness for borrowed money owed to a lender other than Bank,
provided the default has not

 

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been waived by such lender or the default has not been cured within the
applicable cure period; provided further however, if such lender's declaration
of default is being continuously and diligently contested by the Borrower, Lakes
Mall and/or the Related Entity, as the case may be, in good faith through
appropriate proceedings reasonably acceptable to Bank, such default shall not
constitute a default hereunder; or

8.5Representation or Warranty. Any representation or warranty made by the
Borrower and/or Lakes Mall herein, or in any report, certificate, financial
statement or other writing furnished in connection with or pursuant to this Loan
Agreement shall prove to be false, misleading or incomplete in any substantial
material respect on the date as of which made; or

8.6Bankruptcy, Etc. The Borrower or Lakes Mall or CBL Holdings or Parent or any
Related Entity shall make a general assignment of assets for the benefit of
creditors, file a petition in bankruptcy, petition or apply to any tribunal for
the appointment of a custodian, receiver or any trustee for it or a substantial
part of its assets, or shall commence on its or their behalf any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or if there shall have been filed any such petition or
application, or any such proceeding shall have been commenced against Borrower
or Lakes Mall or CBL Holdings or Parent or any Related Entity, in which an order
for relief is entered against Borrower or Lakes Mall or CBL Holdings or Parent
which remains undismissed for a period of ninety (90) days or more; or Borrower
or Lakes Mall or CBL Holdings or Parent or any Related Entity by any act or
omission shall indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the appointment of a
custodian, receiver or any trustee for it or any substantial part of any of its
properties, or shall suffer any such custodianship, receivership or trusteeship
to continue undischarged for a period of ninety (90) days or more; or

8.7Concealment of Property, Etc. The Borrower, Lakes Mall, any Related Entity,
or CBL Holdings or Parent shall have concealed, removed, or permitted to be
concealed or removed, any part of its property, with intent to hinder, delay or
defraud its or his creditors or any of them, or made or suffered a transfer of
any of its property which shall constitute a fraudulent act under any
bankruptcy, fraudulent conveyance or similar law; or shall have made any
transfer of its property to or for the benefit of a creditor at a time when
other creditors similarly situated have not been paid; or shall have suffered or
permitted, while insolvent, any creditor to obtain a lien upon any of its
property through legal proceedings or distraint which is not vacated within
thirty (30) days from the date thereof; or

8.8Management Change. Management of the Borrower shall, for a period of one
hundred eighty (180) consecutive days, cease to be in at least two of the
following persons: (a) Charles B. Lebovitz, (b) John N. Foy, (c) Michael
Lebovitz, (d) Stephen D. Lebovitz or (e) Ron Fullam, who shall be in an
executive management position with Borrower or who shall be a senior vice
president, executive vice president, senior executive vice president or
president with Borrower's general partner; or

8.9Change in Ownership. Parent, its affiliates, officers and key employees, and
CBL Holdings shall have through any means reduced their aggregate partnership
interest in Borrower to less than fifteen percent (15%) of the aggregate of such
partnership interests; or

 

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8.10Loan Documents Terminated or Void. This Loan Agreement, any Note, the
Guaranty, or any instrument securing any Note shall, at any time after their
respective execution and delivery and for any reason, cease to be in full force
and effect or shall be declared to be null and void; or the Borrower, Lakes Mall
and/or any Related Entity shall deny it has any or further liability under this
Loan Agreement, any Note, , the Guaranty, or under the CBL Mortgage; or

8.11Covenants. The Borrower or any Related Entity defaults in the performance or
observance of any other covenant, agreement or undertaking on its part to be
performed or observed, contained herein, in the CBL Mortgage or in any other
instrument or document which now or hereafter evidences or secures all or any
part of the loan indebtedness which default shall continue for more than thirty
(30) days following the mailing of notice from Bank to Borrower, Lakes Mall
and/or such Related Entity, as the case may be; provided however, and
notwithstanding anything contained in this Loan Agreement, in the CBL Mortgage
or in any other instrument or document which now or hereafter evidences or
secures all or any part of the loan indebtedness, failure to comply with a
financial covenant shall not be an Event of Default unless such failure
continues for ninety (90) days after the earlier of (i) the date any senior
officer of the Borrower or any Related Entity has actual knowledge of such
failure; or (ii) the date notice of such failure has been given to the Borrower
by the Bank; or

8.12Breach of Section 7.12 of this Loan Agreement. The Borrower and/or Lakes
Mall shall fail to observe or perform its obligations to the Bank, and/or any
Participant under Section 7.12 of this Loan Agreement; or

8.13Placement of Liens on Property. The Borrower or any Related Entity shall,
without the prior written consent of the Bank and except as permitted by Section
7.5 and 7.6 hereof, create, place or permit to be created or placed, or through
any act or failure to act, acquiesce in the placing of, or allow to remain, any
mortgage, deed of trust, pledge, lien (statutory, constitutional or
contractual), or security interest, encumbrance or charge on, or conditional
sale or other title retention agreement, regardless of whether same are
expressly subordinate to the liens of the CBL Mortgage, with respect to the
property described in any CBL Mortgage.

8.14Remedy. Upon the occurrence of any Event of Default, as specified herein,
the Bank shall, at its option, be relieved of any obligation to make further
Revolving Credit Advances under this Loan Agreement; and the Bank may at its
option charge interest on the outstanding indebtedness at the Default Rate; and
the Bank may, at its option, thereupon declare the entire unpaid principal
balances of the Notes, all interest accrued and unpaid thereon and all other
amounts payable under this Loan Agreement to be immediately due and payable for
all purposes, and may exercise all rights and remedies available to it under the
CBL Mortgage, any other instrument or document which secures any Note, or
available at law or in equity. All such rights and remedies are cumulative and
nonexclusive, and may be exercised by the Bank concurrently or sequentially, in
such order as the Bank may choose.

SECTION 9: MISCELLANEOUS

9.1Amendments. The provisions of this Loan Agreement, any Note, the CBL Mortgage
or any instrument or document executed pursuant hereto or securing the

 

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indebtednesses may be amended or modified only by an instrument in writing
signed by the parties hereto and thereto.

9.2Notices. All notices and other communications provided for hereunder shall be
in writing and shall be mailed, certified mail, return receipt requested, or
delivered, if to the Borrower and/or Lakes Mall, to it at c/o CBL & Associates
Properties, Inc., CBL Center, Suite 500, 2030 Hamilton Place Boulevard,
Chattanooga, Tennessee 37421-6000, Attention: President, with a copy to Charles
Willett, Jr.; if to the Bank, to it at 701 Market Street, Chattanooga, Tennessee
37402, Attention: Gregory L. Cullum; or as to any such person at such other
address as shall be designated by such person in a written notice to the other
parties hereto complying as to delivery with the terms of this Section 9.2. All
such notices and other communications shall be effective (i) if mailed, when
received or three (3) Business Days after mailing, whichever is earlier; or (ii)
if delivered, upon delivery and receipt of an executed acknowledgment of receipt
by the party to whom delivery is made. Notwithstanding the foregoing, the Bank
shall not be required to send a copy of any notice or communication to Charles
Willett, Jr. but the Bank will use good faith efforts to copy Charles Willett,
Jr. on any such notices or communications via regular mail, fax or email.

9.3No Waiver, Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Bank, any right, power or privilege hereunder,
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. Waiver of any
right, power, or privilege hereunder or under any instrument or document now or
hereafter securing the indebtedness evidenced hereby or under any guaranty at
any time given with respect thereto is a waiver only as to the specified item.
The rights and remedies herein provided are cumulative and not exclusive of any
rights or remedies provided by law.

9.4Indemnification. Borrower and Lakes Mall agree to indemnify Bank from and
against any and all claims, losses and liabilities, including, without
limitation, reasonable attorneys' fees, growing out of or resulting from this
Loan Agreement (including, without limitation, enforcement of this Loan
Agreement), except claims, losses or liabilities resulting solely and directly
from Bank's gross negligence or willful misconduct or from Bank's violation of
applicable banking rules and regulations. The indemnification provided for in
this Section shall survive the payment in full of the loan. The Borrower agrees
to indemnify the Bank and the Participants and to hold the Bank and the
Participants harmless from any loss or expense that such Bank or the
Participants may sustain or incur as a consequence of a default by the Borrower
in making any prepayment of or conversion from an advance bearing interest at
the LIBOR Rate after the Borrower has given a notice thereof in accordance with
the provisions of this Loan Agreement.

9.5Survival of Agreements. All agreements, representations and warranties made
herein shall survive the delivery of the Note. This Loan Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns, except that the Borrower and the Lakes Mall
shall not have the right to assign its rights hereunder or any interest therein.

 

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9.6Governing Law. This Loan Agreement shall be governed and construed in
accordance with the laws of the State of Tennessee; except (a) that the
provisions hereof which relate to the payment of interest shall be governed by
(i) the laws of the United States or, (ii) the laws of the State of Tennessee,
whichever permits the Bank to charge the higher rate, as more particularly set
out in the Note, and (b) to the extent that the Liens in favor of the Bank, the
perfection thereof, and the rights and remedies of the Bank with respect
thereto, shall, under mandatory provisions of law, be governed by the laws of a
state other than Tennessee.

9.7Execution in Counterparts. This Loan Agreement may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.

9.8Terminology; Section Headings. All personal pronouns used in this Loan
Agreement whether used in the masculine, feminine, or neuter gender, shall
include all other genders; the singular shall include the plural, and vice
versa. Section headings are for convenience only and neither limit nor amplify
the provisions of this Loan Agreement.

9.9Enforceability of Agreement. Should any one or more of the provisions of this
Loan Agreement be determined to be illegal or unenforceable, all other
provisions, nevertheless, shall remain effective and binding on the parties
hereto.

 

9.10

Interest Limitations.

(a)  The Loan and the Notes evidencing the Loan, including any renewals or
extensions thereof, may provide for the payment of any interest rate (i)
permissible at the time the contract to make the Loan is executed, (ii)
permissible at the time the Loan is made or any advance thereunder is made, or
(iii) permissible at the time of any renewal or extension of the loan or any
Note.

(b) It is the intention of the Bank, the Borrower and the Lakes Mall to comply
strictly with applicable usury laws; and, accordingly, in no event and upon no
contingency shall the Bank ever be entitled to receive, collect, or apply as
interest any interest, fees, charges or other payments equivalent to interest,
in excess of the maximum rate which the Bank may lawfully charge under
applicable statutes and laws from time to time in effect; and in the event that
the holder of the Note ever receives, collects, or applies as interest any such
excess, such amount which, but for this provision, would be excessive interest,
shall be applied to the reduction of the principal amount of the indebtedness
thereby evidenced; and if the principal amount of the indebtedness evidenced
thereby, and all lawful interest thereon, is paid in full, any remaining excess
shall forthwith be paid to the Borrower and/or Lakes Mall or other party
lawfully entitled thereto. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the highest rate which Bank may
lawfully charge under applicable law from time to time in effect, the Borrower
and/or Lakes Mall and the Bank shall, to the maximum extent permitted under
applicable law, characterize any non-principal payment as a reasonable loan
charge, rather than as interest. Any provision hereof, or of any other agreement
between the Bank and the Borrower and/or Lakes Mall, that operates to bind,
obligate, or compel the Borrower to pay interest in excess of such maximum rate
shall be construed to require the payment of the maximum rate only. The
provisions of this paragraph shall be given precedence

 

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over any other provision contained herein or in any other agreement between the
Bank and the Borrower and/or Lakes Mall that is in conflict with the provisions
of this paragraph.

The Notes shall be governed and construed according to the statutes and laws of
the State of Tennessee from time to time in effect, except to the extent that
Section 85 of Title 12 of the United States Code (or other applicable federal
statue) may permit the charging of a higher rate of interest than applicable
state law, in which event such applicable federal statute, as amended and
supplemented from time to time shall govern and control the maximum rate of
interest permitted to be charged hereunder; it being intended that, as to the
maximum rate of interest which may be charged, received, and collected
hereunder, those applicable statutes and laws, whether state or federal, from
time to time in effect, which permit the charging of a higher rate of interest,
shall govern and control; provided, always, however, that in no event and under
no circumstances shall the Borrower and/or Lakes Mall be liable for the payment
of interest in excess of the maximum rate permitted by such applicable law, from
time to time in effect.

9.11Non-Control. In no event shall the Bank's rights hereunder be deemed to
indicate that the Bank is in control of the business, management or properties
of the Borrower, Lakes Mall and/or any Related Entity or has power over the
daily management functions and operating decisions made by the Borrower, Lakes
Mall and/or any Related Entity.

 

9.12

Loan Review; Extensions of Termination Date; Continuing Security.

(a)  The specific Termination Date of Revolving Credit Loan mentioned in Article
One may be extended for additional periods of one (1) year. On each June 1
hereafter, so long as the Loan remains unpaid, Bank shall review the performance
of the Loan. If the Bank deems performance of the Loan acceptable, it will renew
the Loan for one (1) year from the then existing Termination Date of Revolving
Credit Loan. If the Bank renews the Loan at anytime or from time to time prior
to June 1, 2008, the Bank and the Borrower and Lakes Mall agree the Loan shall
be renewed with covenants as contained in Sections 7.2, 7.3 and 7.4 of this Loan
Agreement or such other covenants, terms and conditions as may be mutually
agreed upon by Borrower and Lakes Mall and Bank. If Bank deems performance of
the Loan not acceptable, Bank shall not be obligated to extend the Termination
Date of Revolving Credit Loan; however, the Borrower and Lakes Mall shall then
have the right to repay the Loan pursuant to the repayment provisions contained
in the Notes. Assessment of performance and the decision whether to extend the
Termination Date of Revolving Credit Loan shall be solely within Bank's
discretion. The Bank will not deem the performance of the Loan acceptable unless
and until the Borrower provides to the Bank, among other things, updated title
commitments with respect to all properties covered by any CBL Mortgage, which
title commitments must be in form and substance acceptable to the Bank and must
contain no exceptions unacceptable to the Bank. Bank shall notify Borrower of
the results of its review of the Loan no later than eleven (11) months prior to
the then effective Termination Date of the Revolving Credit Loan. If Bank elects
not to renew the Loan, Bank shall not perform or cause to be performed, except
at Bank's expense unless an Event of Default has occurred, any inspections,
appraisals, surveys or similar items between: (a) the date notice thereof is
given Borrower or the Termination Date, whichever first occurs, and (b) the date
the Notes are repaid as provided herein. Anything contained in the foregoing to
the contrary notwithstanding, upon any such extension, the Borrower and Lakes
Mall agree to pay to the Bank (in addition to the commitment fees it has
previously paid under

 

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this Loan Agreement) an extension fee of Two Hundred Thousand and NO/100 Dollars
($200,000.00).

(b) Upon the specific Termination Date of Revolving Credit Loan so fixed in
Article One, or in the event of the extension of this Loan Agreement to a
subsequent Termination Date (when no effective extension is in force), the
Revolving Credit Loan and all other extensions of credit (unless sooner declared
to be due and payable by the Bank pursuant to the provisions hereof), and
subject to Borrower's election as set forth in subparagraph (a) above, shall
become due and payable for all purposes. Until all such indebtednesses,
liabilities and obligations secured by the CBL Mortgage are satisfied in full,
such termination shall not affect the security interest granted to Bank pursuant
to the CBL Mortgage, nor the duties, covenants, and obligations of the Borrower
therein and in this Loan Agreement; and all of such duties, covenants and
obligations shall remain in full force and effect until the Revolving Credit
Loan and all obligations under this Loan Agreement have been fully paid and
satisfied in all respects.

9.13Fees and Expenses. The Borrower and Lakes Mall agree to pay, or reimburse
the Bank for, the reasonable actual third party out-of-pocket expenses,
including counsel fees and fees of any accountants, inspectors or other similar
experts, as deemed necessary by the Bank, incurred by the Bank in connection
with the development, preparation, execution, amendment, recording, (excluding
the salary and expenses of Bank's employees and Bank's normal and usual overhead
expenses) or enforcement of, or the preservation of any rights under this Loan
Agreement, the Notes and any instrument or document now or hereafter securing
the and Revolving Credit Loan indebtednesses.

9.14Time of Essence. Time is of the essence of this Loan Agreement, the Notes
and the other instruments and documents executed and delivered in connection
herewith.

9.15Compromises, Releases, Etc. Bank is hereby authorized from time to time,
without notice to anyone, to make any sales, pledges, surrenders, compromises,
settlements, releases, indulgences, alterations, substitutions, exchanges,
changes in, modifications, or other dispositions including, without limitation,
cancellations, of all or any part of the Loan indebtedness, or of any contract
or instrument evidencing any thereof, or of any security or collateral therefor,
and/or to take any security for or guaranties upon any of said indebtedness; and
the liability of any guarantor, if any, shall not be in any manner affected,
diminished, or impaired thereby, or by any lack of diligence, failure, neglect,
or omission on the part of Bank to make any demand or protest, or give any
notice of dishonor or default, or to realize upon or protect any of said
indebtedness or any collateral or security therefor. Bank shall have the right
to apply such payments and credits first to the payment of all its expenses,
including costs and reasonable attorneys' fees, then to interest due under the
Note and then to principal due under the Note. Bank shall be under no
obligation, at any time, to first resort to, make demand on, file a claim
against, or exhaust its remedies against the Borrower and/or Lakes Mall, or its
property or estate, or to resort to or exhaust its remedies against any
collateral, security, property, liens, or other rights whatsoever. Upon the
occurrence of an Event of Default, it is expressly agreed that Bank may at any
time make demand for payment on, or bring suit against, the Borrower and/or
Lakes Mall and any guarantor, jointly or severally and may compromise with any
of them for such sums or on such terms as it may see fit, and without notice or
consent, the same being hereby expressly waived.

 

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9.16Joinder of Parent. Parent joins herein for the purpose of acknowledging and
consenting to the terms and provisions hereof.

9.17Bank's Consent. Except as otherwise expressly provided herein, in any
instance hereunder where Bank's approval or consent is required or the exercise
of its judgment is required, the granting or denial of such approval or consent
and the exercise of such judgment shall be within the sole but reasonable
discretion of Bank, and Bank shall not, for any reason or to any extent, be
required to grant such approval or consent or exercise such judgment provided
that the Bank shall proceed at all times in good faith and in a commercially
reasonable manner.

9.18Venue of Actions. As an integral part of the consideration for the making of
the loan, it is expressly understood and agreed that no suit or action shall be
commenced by the Borrower, Lakes Mall, Related Entities, CBL Holdings, Parent,
by any guarantor, or by any successor, personal representative or assignee of
any of them, with respect to the loan contemplated hereby, or with respect to
this Loan Agreement or any other document or instrument which now or hereafter
evidences or secures all or any part of the loan indebtedness, other than in a
state court of competent jurisdiction in and for the County of the State in
which the principal place of business of the Bank is situated, or in the United
States District Court for the District in which the principal place of business
of the Bank is situated, and not elsewhere. Nothing in this paragraph contained
shall prohibit Bank from instituting suit in any court of competent jurisdiction
for the enforcement of its rights hereunder or in any other document or
instrument which evidences or secures the loan indebtedness.

9.19Waiver of Right to Trial By Jury. EACH PARTY TO THIS LOAN AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (a) ARISING UNDER THIS LOAN AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH, OR (b) IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES
HERETO OR ANY OF THEM WITH RESPECT TO THIS LOAN AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS LOAN AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

9.20Conflict. In the event of any conflict between the provisions hereof and any
other loan document during the continuance of this Loan Agreement (including but
not limited to any other documents received by the Bank via assignment in
connection with the Lakes Mall), the provisions of this Loan Agreement shall
control.

9.21Participation Agreement. The Borrower and Lakes Mall acknowledge that the
Participation Agreement exists and that the Bank is obligated, subject to the
terms and conditions

 

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hereof, to fund One Hundred Million Dollars ($100,000,000.00) to the Borrower
but that of that amount , Compass Bank, AmSouth Bank, Branch Banking and Trust
Company and Manufacturers and Traders Trust Company are obligated, subject to
the terms and conditions of the Participation Agreement, to fund as follows:
Compass is to fund Fifteen Million and NO/100 Dollars ($15,000,000.00), AmSouth
Bank is to fund Twenty Five Million and NO/100 Dollars ($25,000,000.00), Branch
Banking and Trust Company is to fund Fifteen Million and NO/100 Dollars
($15,000,000.00) and Manufacturers and Traders Trust Company to fund Twenty
Million and NO/100 Dollars ($20,000,000.00).

9.22USA Patriot Act Notice and Compliance. The USA Patriot Act of 2001 (Public
Law 107-56) and federal regulations issued with respect thereto require all
financial institutions to obtain, verify and record certain information that
identifies individuals or business entities which open an “account” with such
financial institution. Consequently, the Bank may from time to time request, and
Borrower shall provide to the Bank, Borrower’s, Parent’s, each Guarantor’s and
each other Loan party’s name, address, tax identification number and/or such
other identification information as shall be necessary for the Bank to comply
with federal law. An “account” for this purpose may include, without limitation,
a deposit account, cash management service, a transaction or asset account, a
credit account, a loan or other extension of credit, and/or other financial
services product.

(Signatures on Next Page)

 

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IN WITNESS WHEREOF, the Borrower, Lakes Mall, the Bank, CBL Holdings and Parent
have caused this Loan Agreement to be executed by their duly authorized
officers, managers and/or partners, all as of the day and year first above
written.

CBL & ASSOCIATES LIMITED PARTNERSHIP

 

 

BY:

CBL HOLDINGS I, INC.,

 

Its Sole General Partner

 

 

By:          /s/ John N. Foy                                               

 

Title:

Vice Chairman and

 

 

Chief Financial Officer

BORROWER

 

 

 

THE LAKES MALL, LLC

 

 

By: CBL & Associates Limited Partnership,

 

 

Its Managing Member

 

 

By: CBL Holdings I, Inc., its General Partner

 

 

By:        /s/ John N. Foy                                               

 

Title:

Vice Chairman and

 

 

Chief Financial Officer

 

 

LAKES MALL

 

 

CBL & ASSOCIATES PROPERTIES, INC.

 

By:        /s/ John N. Foy                                                 

 

Title:

Vice Chairman and

 

 

Chief Financial Officer

PARENT/GUARANTOR

 

 

 

FIRST TENNESSEE BANK NATIONAL

 

ASSOCIATION

 

 

By:        /s/ Gregory L. Cullum                                    

 

Gregory L. Cullum, Senior Vice President

BANK

 

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EXHIBIT "A"

Real property known as:

 

Walnut Square Mall, Dalton, Georgia

The Lakes Mall, Fruitport, Michigan

Towne Mall, Middleton, Ohio

College Square, Morristown, Tennessee

 

all as more particularly described in the individual deeds of trust, deeds to
secure debt and/or mortgages applicable to the above described properties.

 

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EXHIBIT "B"

PERMITTED ENCUMBRANCES

 

 

1.

As described in the Mortgages.

 

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EXHIBIT "C"

NOTES

 

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EXHIBIT "D"

CHECKLIST FOR CLOSING

 

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EXHIBIT "E"

NON-DEFAULT CERTIFICATE

For Fiscal Year Ended _______________, 20__.

For Fiscal Quarter Ended _______________, 20__.

The undersigned, a duly authorized officer of CBL & Associates Limited
Partnership, a Delaware limited partnership [referred to as "Borrower" in that
certain Amended and Restated Loan Agreement (the "Loan Agreement") dated as of
May ____, 2006, between Borrower, Lakes Mall and First Tennessee Bank National
Association ("Bank")], certifies to said Bank, in accordance with the terms and
provisions of said Loan Agreement, as follows:

1.     All of the representations and warranties set forth in the Loan Agreement
are and remain true and correct on and as of the date of this Certificate with
the same effect as though such representations and warranties had been made on
and as of this date except as otherwise previously disclosed to the Bank in
writing.

2.     As of the date hereof, neither Borrower nor Lakes Mall has knowledge of
any Event of Default, as specified in Section 8 of the Loan Agreement, nor any
event which, upon notice, lapse of time or both, would constitute an Event of
Default, has occurred or is continuing.

3.     As of the date hereof, Borrower is in full compliance with all financial
covenants contained in the Loan Agreement, and the following are true, accurate
and complete:

 

(a)

The Tangible Net Worth (as defined in the Loan Agreement) is
$__________________________ as of ________________, 20___.

 

(b)

The Total Liabilities to Gross Asset Value is _____ to _____ as of
_____________________, 20__.

 

(c)

The ratio of EBITDA to Debt Service Debt is ____ to ____ as of ______________,
20__.

 

(d)

The ratio of EBITDA to Interest Expense is ____ to ____ as of
_____________________, 20_____.

DATED this ______ day of ______________________, 20____.

CBL & ASSOCIATES LIMITED PARTNERSHIP

 

 

BY:

CBL HOLDINGS I, INC.,

 

Its Sole General Partner

 

 

By:                                          
                                      

Title:                                          
                                  

 

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EXHIBIT "F"

LITIGATION

Disclosure Pursuant to Paragraph 5.5

 

See Exhibit "F-1" attached for description of all litigation.

 

ENVIRONMENTAL MATTERS

Disclosure pursuant to Paragraph 5.11

 

None.

 

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JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT

COMPASS BANK as "Participant" under the terms of that certain Amended and
Restated Loan Agreement (the "Loan Agreement") dated effective as of June ____,
2006, between and among First Tennessee Bank National Association, CBL &
Associates Limited Partnership and The Lakes Mall, LLC, in consideration of the
mutual agreements of the parties thereto and of the undersigned therein
contained, hereby joins as a party to said Loan Agreement and agrees to perform
all obligations to be performed on its part thereunder.

IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended and
Restated Loan Agreement to be executed by its duly authorized officer effective
as of June _____, 2006.

COMPASS BANK

 

By:                                          
                                      

 

C. Douglas Vibert, Senior Vice President

 

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JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT

AMSOUTH BANK as "Participant" under the terms of that certain Amended and
Restated Loan Agreement (the "Loan Agreement") dated effective as of June ____,
2006, between and among First Tennessee Bank National Association, CBL &
Associates Limited Partnership and The Lakes Mall, LLC, in consideration of the
mutual agreements of the parties thereto and of the undersigned therein
contained, hereby joins as a party to said Loan Agreement and agrees to perform
all obligations to be performed on its part thereunder.

IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended and
Restated Loan Agreement to be executed by its duly authorized officer effective
as of June ____, 2006.

AMSOUTH BANK

 

By:                                          
                                      

 

Russell Campbell, Senior Vice President

 

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JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT

 

BRANCH BANKING AND TRUST COMPANY as "Participant" under the terms of that
certain Amended and Restated Loan Agreement (the "Loan Agreement") dated
effective as of June ____, 2006, between and among First Tennessee Bank National
Association, CBL & Associates Limited Partnership and The Lakes Mall, LLC, in
consideration of the mutual agreements of the parties thereto and of the
undersigned therein contained, hereby joins as a party to said Loan Agreement
and agrees to perform all obligations to be performed on its part thereunder.

IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended and
Restated Loan Agreement to be executed by its duly authorized officer effective
as of June ____, 2006.

 

BRANCH BANKING AND TRUST COMPANY

 

By:                                          
                                      

 

Robert M. Searson

Title: Senior Vice President

 

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JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT

 

MANUFACTURERS AND TRADERS TRUST COMPANY as "Participant" under the terms of that
certain Amended and Restated Loan Agreement (the "Loan Agreement") dated
effective as of June ____, 2006, between and among First Tennessee Bank National
Association, CBL & Associates Limited Partnership and The Lakes Mall, LLC, in
consideration of the mutual agreements of the parties thereto and of the
undersigned therein contained, hereby joins as a party to said Loan Agreement
and agrees to perform all obligations to be performed on its part thereunder.

IN WITNESS WHEREOF, the undersigned has caused this Joinder in Amended and
Restated Loan Agreement to be executed by its duly authorized officer effective
as of June ____, 2006.

 

MANUFACTURERS AND TRADERS TRUST COMPANY

 

By:                                           
                                          

 

Steven P. Deck, Vice President

 

 

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