form10q.htm

0000910612-10-000016.txt : 20100809 0000910612-10-000016.hdr.sgml : 20100809 20100809171554 ACCESSION NUMBER: 0000910612-10-000016 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20100630 FILED AS OF DATE: 20100809 DATE AS OF CHANGE: 20100809 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CBL & ASSOCIATES PROPERTIES INC CENTRAL INDEX KEY: 0000910612 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 621545718 STATE OF INCORPORATION: DE FISCAL YEAR END: 1207 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-12494 FILM NUMBER: 101002522 BUSINESS ADDRESS: STREET 1: 2030 HAMILTON PLACE BVLD, SUITE 500 STREET 2: CBL CENTER CITY: CHATTANOOGA STATE: TN ZIP: 37421 BUSINESS PHONE: 4238550001 MAIL ADDRESS: STREET 1: 2030 HAMILTON PLACE BVLD, SUITE 500 STREET 2: CBL CENTER CITY: CHATTANOOGA STATE: TN ZIP: 37421 10-Q 1 form10q.htm FORM 10-Q form10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

______________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2010

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM ____________ TO _______________

COMMISSION FILE NO. 1-12494

______________

CBL & ASSOCIATES PROPERTIES, INC.

(Exact Name of registrant as specified in its charter)

______________

DELAWARE 62-1545718

(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)

2030 Hamilton Place Blvd., Suite 500, Chattanooga, TN 37421-6000

(Address of principal executive office, including zip code)

423.855.0001

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o

Non-accelerated filer o(Do not check if smaller reporting company) Smaller Reporting Company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

As of August 4, 2010, there were 138,076,295 shares of common stock, par value $0.01 per share, outstanding.

CBL & Associates Properties, Inc.

Table of Contents

PART I	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009	3

	Condensed Consolidated Statements of Operations for the Three and Six Month Periods Ended June 30, 2010 and 2009	4

	Condensed Consolidated Statements of Equity for the Six Months Ended June 30, 2010 and 2009	6

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2010 and 2009	8

	Notes to Unaudited Condensed Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	50

PART II	OTHER INFORMATION

Item 1.	Legal Proceedings	51

Item 1A.	Risk Factors	51

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	66

Item 3.	Defaults Upon Senior Securities	66

Item 4.	(Removed and Reserved)	66

Item 5.	Other Information	66

Item 6.	Exhibits	66

	SIGNATURE	67

PART I – FINANCIAL INFORMATION

ITEM 1. Financial Statements

CBL & Associates Properties, Inc.

Condensed Consolidated Balance Sheets

(In thousands, except share data)

(Unaudited)

ASSETS	June 30, 2010			December 31, 2009
Real estate assets:
Land	$	943,492		$	946,750
Buildings and improvements		7,557,570			7,569,015
		8,501,062			8,515,765
Less accumulated depreciation		(1,612,950	)		(1,505,840	)
		6,888,112			7,009,925
Developments in progress		99,748			85,110
Net investment in real estate assets		6,987,860			7,095,035
Cash and cash equivalents		60,649			48,062
Receivables:
Tenant, net of allowance for doubtful accounts of $3,241 in 2010 and $3,101 in 2009		69,268			73,170
Other		13,240			8,162
Mortgage and other notes receivable		38,025			38,208
Investments in unconsolidated affiliates		214,682			186,523
Intangible lease assets and other assets		273,253			279,950
	$	7,656,977		$	7,729,110

LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND EQUITY
Mortgage and other indebtedness	$	5,455,867		$	5,616,139
Accounts payable and accrued liabilities		290,347			248,333
Total liabilities		5,746,214			5,864,472
Commitments and contingencies (Notes 4 and 9)
Redeemable noncontrolling interests:
Redeemable noncontrolling partnership interests		25,933			22,689
Redeemable noncontrolling preferred joint venture interest		421,562			421,570
Total redeemable noncontrolling interests		447,495			444,259
Shareholders’ equity:
Preferred stock, $.01 par value, 15,000,000 shares authorized:
7.75% Series C Cumulative Redeemable Preferred Stock, 460,000 shares outstanding		5			5
7.375% Series D Cumulative Redeemable Preferred Stock, 1,330,000 and 700,000 shares outstanding in 2010 and 2009, respectively		13			7
Common stock, $.01 par value, 350,000,000 shares authorized, 138,075,609 and 137,888,408 issued and outstanding in 2010 and 2009, respectively		1,381			1,379
Additional paid-in capital		1,508,116			1,399,654
Accumulated other comprehensive income		4,310			491
Accumulated deficit		(335,173	)		(283,640	)
Total shareholders’ equity		1,178,652			1,117,896
Noncontrolling interests		284,616			302,483
Total equity		1,463,268			1,420,379
	$	7,656,977		$	7,729,110

The accompanying notes are an integral part of these balance sheets.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009
REVENUES:
Minimum rents	$	170,239		$	170,491		$	339,060		$	342,428
Percentage rents		2,127			1,604			6,140			6,408
Other rents		4,598			4,142			9,174			8,422
Tenant reimbursements		76,347			81,695			156,170			163,179
Management, development and leasing fees		1,601			1,615			3,307			4,080
Other		7,234			6,977			14,471			13,067
Total revenues		262,146			266,524			528,322			537,584
EXPENSES:
Property operating		37,514			39,355			76,411			83,372
Depreciation and amortization		70,652			75,793			142,664			154,104
Real estate taxes		24,866			24,449			49,858			48,603
Maintenance and repairs		13,561			13,416			29,745			29,410
General and administrative		10,321			10,893			21,395			22,372
Loss on impairment of real estate		25,435			-			25,435			-
Other		6,415			5,914			13,116			11,071
Total expenses		188,764			169,820			358,624			348,932
Income from operations		73,382			96,704			169,698			188,652
Interest and other income		948			1,362			1,999			2,943
Interest expense		(73,341	)		(72,842	)		(146,801	)		(144,727	)
Loss on impairment of investment		-			-			-			(7,706	)
Gain (loss) on sales of real estate assets		1,149			72			2,015			(67	)
Equity in earnings of unconsolidated affiliates		409			62			948			1,596
Income tax benefit (provision)		1,911			(152	)		3,788			(755	)
Income from continuing operations		4,458			25,206			31,647			39,936
Operating income of discontinued operations		59			86			73			20
Loss on discontinued operations		-			(12	)		-			(72	)
Net income		4,517			25,280			31,720			39,884
Net (income) loss attributable to noncontrolling interests in:
Operating partnership		2,723			(5,109	)		(1,387	)		(6,415	)
Other consolidated subsidiaries		(6,124	)		(6,580	)		(12,261	)		(12,711	)
Net income attributable to the Company		1,116			13,591			18,072			20,758
Preferred dividends		(8,358	)		(5,454	)		(14,386	)		(10,909	)
Net income (loss) attributable to common shareholders	$	(7,242	)	$	8,137		$	3,686		$	9,849

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share data)

(Unaudited)

(Continued)

	Three Months Ended June 30,					Six Months Ended June 30,
	2010			2009		2010		2009
Basic per share data:
Income (loss) from continuing operations, net of preferred dividends	$	(0.05	)	$	0.10	$	0.03	$	0.13
Discontinued operations		-			-		-		-
Net income (loss) attributable to common shareholders	$	(0.05	)	$	0.10	$	0.03	$	0.13
Weighted average common shares outstanding		138,068			82,187		138,018		74,341
Diluted per share data:
Income (loss) from continuing operations, net of preferred dividends	$	(0.05	)	$	0.10	$	0.03	$	0.13
Discontinued operations		-			-		-		-
Net income (loss) attributable to common shareholders	$	(0.05	)	$	0.10	$	0.03	$	0.13
Weighted average common and potential dilutive common shares outstanding		138,112			82,226		138,059		74,378
Amounts attributable to common shareholders:
Income (loss) from continuing operations, net of preferred dividends	$	(7,285	)	$	8,092	$	3,633	$	9,880
Discontinued operations		43			45		53		(31	)
Net income (loss) attributable to common shareholders	$	(7,242	)	$	8,137	$	3,686	$	9,849


Dividends declared per common share	$	0.20		$	0.11	$	0.40	$	0.48

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except per share data)

				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Partnership Interests			Preferred Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Total Shareholders' Equity			Noncontrolling Interests			Total Equity

Balance, January 1, 2009	$	18,393		$	12	$	664	$	993,941		$	(12,786	)	$	(193,307	)	$	788,524		$	380,472		$	1,168,996
Net income		2,688			-		-		-			-			20,758			20,758			6,095			26,853
Other comprehensive income:
Net unrealized gain (loss) on available-for-sale securities		193			-		-		-			192			-			192			(249	)		(57	)
Net unrealized gain on hedging instruments		342			-		-		-			3,053			-			3,053			1,728			4,781
Realized loss on foreign currency translation adjustment		3			-		-		-			44			-			44			28			72
Net unrealized gain on foreign currency translation adjustment		350			-		-		-			2,529			-			2,529			1,300			3,829
Total other comprehensive income		888																5,818			2,807			8,625
Dividends declared - common stock		-			-		-		-			-			(39,744	)		(39,744	)		-			(39,744	)
Dividends declared - preferred stock		-			-		-		-			-			(10,909	)		(10,909	)		-			(10,909	)
Issuance of common stock and restricted common stock		-			-		-		414			-			-			414			-			414
Issuance of common stock for dividend		-			-		48		14,691			-			-			14,739			-			14,739
Issuance of common stock in equity offering		-			-		666		380,936			-			-			381,602			-			381,602
Cancellation of restricted common stock		-			-		-		(117	)		-			-			(117	)		-			(117	)
Accrual under deferred compensation arrangements		-			-		-		39			-			-			39			-			39
Amortization of deferred compensation		-			-		-		1,515			-			-			1,515			-			1,515
Additions to deferred financing costs		-			-		-		-			-			-			-			23			23
Transfer from noncontrolling interests to redeemable noncontrolling interests		82,970			-		-		-			-			-			-			(82,970	)		(82,970	)
Issuance of noncontrolling interests for distribution		-			-		-		-			-			-			-			4,140			4,140
Distributions to noncontrolling interests		(6,262	)		-		-		-			-			-			-			(29,062	)		(29,062	)
Purchase of noncontrolling interest in other consolidated subsidiaries		-			-		-		217			-			-			217			(717	)		(500	)
Adjustment for noncontrolling interests		(6,238	)		-		-		27,931			-			-			27,931			(21,693	)		6,238
Adjustment to record redeemable noncontrolling interests at redemption value		(647	)		-		-		647			-			-			647			-			647
Balance, June 30, 2009	$	91,792		$	12	$	1,378	$	1,420,214		$	(6,968	)	$	(223,202	)	$	1,191,434		$	259,095		$	1,450,529

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Equity

(In thousands, except per share data)

				Equity
				Shareholders' Equity
	Redeemable Noncontrolling Partnership Interests			Preferred Stock		Common Stock		Additional Paid-in Capital			Accumulated Other Comprehensive Income			Accumulated Deficit			Total Shareholders' Equity			Noncontrolling Interests			Total Equity

Balance, January 1, 2010	$	22,689		$	12	$	1,379	$	1,399,654		$	491		$	(283,640	)	$	1,117,896		$	302,483		$	1,420,379
Net income		1,874			-		-		-			-			18,072			18,072			1,550			19,622
Other comprehensive income (loss):
Net unrealized gain on available-for-sale securities		40			-		-		-			3,557			-			3,557			1,299			4,856
Net unrealized gain on hedging instruments		12			-		-		-			1,101			-			1,101			402			1,503
Realized loss on foreign currency translation adjustment		1			-		-		-			123			-			123			45			168
Net unrealized gain (loss) on foreign currency translation adjustment		(397	)		-		-		-			(962	)		-			(962	)		1,203			241
Total other comprehensive income (loss)		(344	)															3,819			2,949			6,768
Dividends declared - common stock		-			-		-		-			-			(55,219	)		(55,219	)		-			(55,219	)
Dividends declared - preferred stock		-			-		-		-			-			(14,386	)		(14,386	)		-			(14,386	)
Issuance of preferred stock for equity offering		-			6		-		121,262			-			-			121,268			-			121,268
Issuance of common stock and restricted common stock		-			-		1		121			-			-			122			-			122
Cancellation of restricted common stock		-			-		-		(175	)		-			-			(175	)		-			(175	)
Exercise of stock options		-			-		1		941			-			-			942			-			942
Accrual under deferred compensation arrangements		-			-		-		16			-			-			16			-			16
Amortization of deferred compensation		-			-		-		1,485			-			-			1,485			-			1,485
Income tax effect of share-based compensation		(10	)		-		-		(1,468	)		-			-			(1,468	)		(337	)		(1,805	)
Distributions to noncontrolling interests		(4,536	)		-		-		-			-			-			-			(29,489	)		(29,489	)
Adjustment for noncontrolling interests		837			-		-		(8,297	)		-			-			(8,297	)		7,460			(837	)
Adjustment to record redeemable noncontrolling interests at redemption value		5,423			-		-		(5,423	)		-			-			(5,423	)		-			(5,423	)
Balance, June 30, 2010	$	25,933		$	18	$	1,381	$	1,508,116		$	4,310		$	(335,173	)	$	1,178,652		$	284,616		$	1,463,268

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

	Six Months Ended June 30,
	2010			2009

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	31,720		$	39,884
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		97,420			96,393
Amortization		47,058			62,142
Amortization of deferred finance costs and debt premiums (discounts)		3,440			(938	)
Net amortization of above- and below-market leases		(1,735	)		(3,112	)
(Gain) loss on sales of real estate assets		(2,015	)		67
Realized foreign currency loss		169			75
Loss on discontinued operations		-			72
Write-off of development projects		359			143
Share-based compensation expense		1,561			1,875
Income tax effect of share-based compensation		(1,815	)		-
Loss on impairment of investment		-			7,706
Loss on impairment of real estate		25,435			-
Equity in earnings of unconsolidated affiliates		(948	)		(1,596	)
Distributions of earnings from unconsolidated affiliates		2,730			6,020
Provision for doubtful accounts		1,745			3,797
Change in deferred tax accounts		349			712
Changes in:
Tenant and other receivables		(2,995	)		639
Other assets		739			(2,787	)
Accounts payable and accrued liabilities		(21,297	)		(11,947	)
Net cash provided by operating activities		181,920			199,145

CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to real estate assets		(45,417	)		(115,718	)
Distributions from restricted cash		688			2,699
Proceeds from sales of real estate assets		2,607			4,722
Additions to mortgage notes receivable		-			(4,437	)
Payments received on mortgage notes receivable		1,278			7,437
Additional investments in and advances to unconsolidated affiliates		(24,750	)		(42,012	)
Distributions in excess of equity in earnings of unconsolidated affiliates		24,861			45,464
Changes in other assets		(2,366	)		15,439
Net cash used in investing activities		(43,099	)		(86,406	)

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)

(Continued)

	Six Months Ended June 30,
	2010			2009


CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage and other indebtedness	$	371,323		$	347,017
Principal payments on mortgage and other indebtedness		(528,867	)		(750,349	)
Additions to deferred financing costs		(2,343	)		(4,075	)
Proceeds from issuances of common stock		62			381,686
Proceeds from issuances of preferred stock		121,268			-
Proceeds from exercises of stock options		942			-
Income tax effect of share-based compensation		1,815			-
Purchase of noncontrolling interests in other consolidated subsidiary		-			(500	)
Distributions to noncontrolling interests		(41,550	)		(41,349	)
Dividends paid to holders of preferred stock		(14,386	)		(10,909	)
Dividends paid to common shareholders		(34,498	)		(34,405	)
Net cash used in financing activities		(126,234	)		(112,884	)

EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH		-			(293	)
NET CHANGE IN CASH AND CASH EQUIVALENTS		12,587			(438	)
CASH AND CASH EQUIVALENTS, beginning of period		48,062			51,227
CASH AND CASH EQUIVALENTS, end of period	$	60,649		$	50,789

SUPPLEMENTAL INFORMATION:
Cash paid for interest, net of amounts capitalized	$	142,088		$	148,309

The accompanying notes are an integral part of these statements.

CBL & Associates Properties, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

(In thousands, except per share data)

Note 1 – Organization and Basis of Presentation

CBL & Associates Properties, Inc. (“CBL”), a Delaware corporation, is a self-managed, self-administered, fully integrated real estate investment trust (“REIT”) that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air centers, community centers and office properties. Its shopping center properties are located in 27 states, but are primarily in the southeastern and midwestern United States.

CBL conducts substantially all of its business through CBL & Associates Limited Partnership (the “Operating Partnership”).At June 30, 2010, the Operating Partnership owned controlling interests in 76 regional malls/open-air centers (including one mixed-use center), 30 associated centers (each located adjacent to a regional mall), ten community centers, and 13 office buildings, including CBL’s corporate office building. The Operating Partnership consolidates the financial statements of all entities in which it has a controlling financial interest or where it is the primary beneficiary of a variable interest entity. At June 30, 2010, the Operating Partnership owned non-controlling interests in eight regional malls, four associated centers, four community centers and six office buildings. Because one or more of the other partners have substantive participating rights, the Operating Partnership does not control these partnerships and joint ventures and, accordingly, accounts for these investments using the equity method. The Operating Partnership had a controlling interest in one community center, owned in a 75/25 joint venture that was under construction at June 30, 2010. The Operating Partnership also holds options to acquire certain development properties owned by third parties.

CBL is the 100% owner of two qualified REIT subsidiaries, CBL Holdings I, Inc. and CBL Holdings II, Inc. At June 30, 2010, CBL Holdings I, Inc., the sole general partner of the Operating Partnership, owned a 1.1% general partner interest in the Operating Partnership and CBL Holdings II, Inc. owned a 71.6% limited partner interest for a combined interest held by CBL of 72.7%.

The noncontrolling interest in the Operating Partnership is held primarily by CBL & Associates, Inc. and its affiliates (collectively “CBL’s Predecessor”) and by affiliates of The Richard E. Jacobs Group, Inc. (“Jacobs”). CBL’s Predecessor contributed their interests in certain real estate properties and joint ventures to the Operating Partnership in exchange for a limited partner interest when the Operating Partnership was formed in November 1993. Jacobs contributed their interests in certain real estate properties and joint ventures to the Operating Partnership in exchange for limited partner interests when the Operating Partnership acquired the majority of Jacobs’ interests in 23 properties in January 2001 and the balance of such interests in February 2002. At June 30, 2010, CBL’s Predecessor owned a 9.8% limited partner interest, Jacobs owned a 12.1% limited partner interest and third parties owned a 5.4% limited partner interest in the Operating Partnership. CBL’s Predecessor also owned 7.3 million shares of CBL’s common stock at June 30, 2010, for a total combined effective interest of 13.6% in the Operating Partnership.

The Operating Partnership conducts CBL’s property management and development activities through CBL & Associates Management, Inc. (the “Management Company”) to comply with certain requirements of the Internal Revenue Code of 1986, as amended (the “Code”). The Operating Partnership owns 100% of both of the Management Company’s preferred stock and common stock.

CBL, the Operating Partnership and the Management Company are collectively referred to herein as “the Company”.

The accompanying condensed consolidated financial statements are unaudited; however, they have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and in conjunction with the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting solely of normal recurring matters) necessary for a fair presentation of the financial statements for these interim periods have been included. Material

intercompany transactions have been eliminated. The results for the interim period ended June 30, 2010 are not necessarily indicative of the results to be obtained for the full fiscal year.

In April 2009, the Company paid its first quarter dividend on its common stock of $0.37 per share in cash and shares of common stock. The Company issued 4,754,355 shares of its common stock in connection with the dividend, which resulted in an increase of approximately 7.2% in the number of shares outstanding. The Company elected to treat the issuance of its common stock as a stock dividend for earnings per share (“EPS”) purposes pursuant to accounting guidance that was in effect at that time. Therefore, all share and per share information related to EPS was adjusted proportionately to reflect the additional common stock issued on a retrospective basis. However, in January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2010-01, Accounting for Stock Dividends, Including Distributions to Shareholders with Components of Stock and Cash (“ASU 2010-01”) requiring that stock dividends such as the one the Company made in April 2009 be treated as a stock issuance that is reflected in share and per share information related to EPS on a prospective basis. Pursuant to the provisions of ASU 2010-01, the Company adopted this guidance on a retrospective basis. Thus, the share and per share information related to EPS for the three and six months ended June 30, 2009 as previously presented in the Company’s Form 10-Q for the quarterly period ended June 30, 2009, has been revised herein to reflect this adoption.

The Company has evaluated subsequent events through the date of issuance of these financial statements.

These condensed consolidated financial statements should be read in conjunction with CBL’s audited consolidated financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2009, filed on February 22, 2010, as amended.

Note 2 – New Accounting Guidance

Effective January 1, 2010, the Company adopted ASU No. 2010-06, Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). ASU 2010-06 provides that significant transfers in or out of measurements classified as Levels 1 or 2 should be disclosed separately along with reasons for the transfers. Information regarding purchases, sales, issuances and settlements related to measurements classified as Level 3 are also to be presented separately. Existing disclosures have been updated to include fair value measurement disclosures for each class of assets and liabilities and information regarding the valuation techniques and inputs used to measure fair value in measurements classified as either Levels 2 or 3. The guidance was effective for fiscal years beginning after December 15, 2009 excluding the provision relating to the rollforward of Level 3 activity which has been deferred until January 1, 2011. The adoption did not have an impact on the Company’s condensed consolidated financial statements.

Effective January 1, 2010, the Company adopted ASU No. 2009-16, Transfers and Servicing: Accounting for Transfers of Financial Assets (“ASU 2009-16”). The guidance eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets and requires additional related disclosures. The adoption did not have an impact on the Company’s condensed consolidated financial statements.

Effective January 1, 2010, the Company adopted ASU No. 2009-17, Consolidations: Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (“ASU 2009-17”). ASU 2009-17 modifies how a company determines when an entity that is insufficiently capitalized or is not controlled through voting, or similar, rights should be consolidated. The guidance clarifies that the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. This guidance requires an ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity. It also requires additional disclosure about a company’s involvement in variable interest entities and any significant changes in risk exposure due to that involvement. The adoption did not have an impact on the Company’s condensed consolidated financial statements.

subsequent events have been evaluated. The new accounting guidance was effective immediately and was adopted by the Company upon the date of issuance.

Note 3 – Fair Value Measurements

The Company has categorized its financial assets and financial liabilities that are recorded at fair value into a hierarchy based on whether the inputs to valuation techniques are observable or unobservable. The fair value hierarchy contains three levels of inputs that may be used to measure fair value as follows:

Level 1 – Inputs represent quoted prices in active markets for identical assets and liabilities as of the measurement date.

Level 2 – Inputs, other than those included in Level 1, represent observable measurements for similar instruments in active markets, or identical or similar instruments in markets that are not active, and observable measurements or market data for instruments with substantially the full term of the asset or liability.

Level 3 – Inputs represent unobservable measurements, supported by little, if any, market activity, and require considerable assumptions that are significant to the fair value of the asset or liability. Market valuations must often be determined using discounted cash flow methodologies, pricing models or similar techniques based on the Company’s assumptions and best judgment.

The following tables set forth information regarding the Company’s financial instruments that are measured at fair value in the condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009:

			Fair Value Measurements at Reporting Date Using
	Fair Value at June 30, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale securities	$	8,935	$	8,935	$	-	$	-
Privately held debt and equity securities		2,475		-		-		2,475
Interest rate caps		21		-		21		-

Liabilities:
Interest rate swaps	$	1,197	$	-	$	1,197	$	-

			Fair Value Measurements at Reporting Date Using
	Fair Value at December 31, 2009		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Available-for-sale securities	$	4,039	$	4,039	$	-	$	-
Privately held debt and equity securities		2,475		-		-		2,475
Interest rate cap		2		-		2		-

Liabilities:
Interest rate swaps	$	2,907	$	-	$	2,907	$	-

Intangible lease assets and other assets in the condensed consolidated balance sheets include marketable securities consisting of corporate equity securities that are classified as available for sale. Net unrealized gains and losses on available-for-sale securities that are deemed to be temporary in nature are recorded as a component of accumulated other comprehensive income in redeemable noncontrolling interests, shareholders’ equity and

noncontrolling interests. If a decline in the value of an investment is deemed to be other than temporary, the investment is written down to fair value and an impairment loss is recognized in the current period to the extent of the decline in value. During the three and six month periods ended June 30, 2010 and 2009, the Company did not recognize any realized gains and losses or write-downs related to sales or disposals of marketable securities or other-than-temporary impairments. The fair value of the Company’s available-for-sale securities is based on quoted market prices and, thus, is classified under Level 1. The following is a summary of the equity securities held by the Company as of June 30, 2010 and December 31, 2009:

			Gross Unrealized
	Adjusted Cost		Gains		Losses		Fair Value

June 30, 2010	$	4,207	$	4,732	$	4	$	8,935
December 31, 2009	$	4,207	$	-	$	168	$	4,039

The Company holds a secured convertible promissory note from, and a warrant to acquire shares of, Jinsheng Group (“Jinsheng”), in which the Company also holds a cost-method investment. The secured convertible note is non-interest bearing and is secured by shares of Jinsheng. Since the secured convertible note is non-interest bearing and there is no active market for Jinsheng’s debt, the Company performed an analysis on the note considering credit risk and discounting factors to determine the fair value. The warrant was initially valued using estimated share price and volatility variables in a Black Scholes model. Due to the significant estimates and assumptions used in the valuation of the note and warrant, the Company has classified these under Level 3. As part of its investment review as of March 31, 2009, the Company determined that its investment in Jinsheng was impaired on an other than temporary basis due to a decline in expected future cash flows as a result of declining occupancy and sales related to the then downturn of the real estate market in China. An impairment charge of $2,400 was recorded in the Company’s condensed consolidated statement of operations for the six month period ended June 30, 2009, to reduce the carrying values of the secured convertible note and warrant to their estimated fair values. The Company performed qualitative and quantitative analyses of its investment as of June 30, 2010 and determined that the current balance of the secured convertible note and warrant of $2,475 is not impaired. See Note 4 for further discussion.

The Company uses interest rate swaps to mitigate the effect of interest rate movements on its variable-rate debt. The Company currently has two interest rate swaps included in accounts payable and accrued liabilities and two interest rate caps included in intangible lease assets and other assets in the accompanying condensed consolidated balance sheets that qualify as hedging instruments and are designated as cash flow hedges. The swaps and caps have predominantly met the effectiveness test criteria since inception and changes in their fair values are, thus, primarily reported in other comprehensive income and are reclassified into earnings in the same period or periods during which the hedged items affect earnings. The fair values of the Company’s interest rate hedge instruments, classified under Level 2, are determined using a proprietary model which is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate (“LIBOR”) information, consideration of the Company’s credit standing, credit risk of the counterparties and reasonable estimates about relevant future market conditions. See Note 5 for further information regarding the Company’s interest rate hedging activity.

The carrying values of cash and cash equivalents, receivables, accounts payable and accrued liabilities are reasonable estimates of their fair values because of the short-term nature of these financial instruments. Based on the interest rates for similar financial instruments, the carrying value of mortgage notes receivable is a reasonable estimate of fair value. The estimated fair value of mortgage and other indebtedness was $5,823,793 and $5,830,722 at June 30, 2010 and December 31, 2009, respectively. The estimated fair value was calculated by discounting future cash flows for the notes payable using estimated market rates at which similar loans would be made currently.

The following table sets forth information regarding the Company’s assets that are measured at fair value on a nonrecurring basis:

			Fair Value Measurements at Reporting Date Using
	Fair Value at June 30, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Loss
Assets:
Long-lived assets	$	11,969	$	-	$	-	$	11,969	$	25,435

The Company evaluates the carrying value of long-lived assets to be held and used when events or changes in circumstances warrant such a review. The carrying value of a long-lived asset is considered impaired when its estimated future undiscounted cash flows are less than its carrying value. If it is determined that impairment has occurred, the amount of the impairment charge is equal to the excess of the asset’s carrying value over its estimated fair value. The Company’s estimates of undiscounted cash flows expected to be generated by each property are based on a number of assumptions such as leasing expectations, operating budgets, estimated useful lives, future maintenance expenditures, intent to hold for use and capitalization rates. These assumptions are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter the assumptions used, the future cash flows estimated in the Company’s impairment analyses may not be achieved.

During the course of the Company’s normal quarterly impairment review process for the second quarter of 2010, it was determined that a write-down of the depreciated book value of Oak Hollow Mall in High Point, NC, to its estimated fair value was necessary, resulting in a non-cash loss on impairment of real estate assets of $25,435 for the three and six months ended June 30, 2010. Subsequent to June 30, 2010, the Company entered into a contract to sell this property, subject to due diligence and customary closing conditions, for a sales price that is significantly less than the property’s carrying value. The impending sale was considered in the quarterly impairment review process, which resulted in a fair value of $11,578. If the sale of this property closes in accordance with the terms of the current contract, the lender of the non-recourse loan secured by this property with a principal balance of $39,559 as of June 30, 2010 has agreed to modify the outstanding principal balance of the loan to equal the net sales price of the property. See Note 9 for additional information.

The revenues of Oak Hollow Mall accounted for approximately 0.4% of total consolidated revenues for the trailing twelve months ended June 30, 2010. A reconciliation of the property’s carrying values for the six months ended June 30, 2010 is as follows:

	Oak Hollow Mall
Beginning carrying value, January 1, 2010	$	37,287
Capital expenditures		512
Depreciation expense		(786	)
Loss on impairment of real estate		(25,435	)
Ending carrying value, June 30, 2010	$	11,578

Note 4 – Unconsolidated Affiliates, Noncontrolling Interests and Cost Method Investments

Unconsolidated Affiliates

At June 30, 2010, the Company had investments in the following 20 entities, which are accounted for using the equity method of accounting:

Joint Venture	Property Name	Company's Interest

CBL-TRS Joint Venture, LLC	Friendly Center, The Shops at Friendly Center and a portfolio of six office buildings		50.0	%
CBL-TRS Joint Venture II, LLC	Renaissance Center		50.0	%
Governor’s Square IB	Governor’s Plaza		50.0	%
Governor’s Square Company	Governor’s Square		47.5	%
High Pointe Commons, LP	High Pointe Commons		50.0	%
High Pointe Commons II-HAP, LP	High Pointe Commons - Christmas Tree Shop		50.0	%
Imperial Valley Mall L.P.	Imperial Valley Mall		60.0	%
Imperial Valley Peripheral L.P.	Imperial Valley Mall (vacant land)		60.0	%
JG Gulf Coast Town Center LLC	Gulf Coast Town Center		50.0	%
Kentucky Oaks Mall Company	Kentucky Oaks Mall		50.0	%
Mall of South Carolina L.P.	Coastal Grand—Myrtle Beach		50.0	%
Mall of South Carolina Outparcel L.P.	Coastal Grand—Myrtle Beach (vacant land)		50.0	%
Mall Shopping Center Company	Plaza del Sol (1)		50.6	%
Parkway Place L.P.	Parkway Place		50.0	%
Port Orange I, LLC	The Pavilion at Port Orange Phase I		50.0	%
Port Orange II, LLC	The Pavilion at Port Orange Phase II		50.0	%
Triangle Town Member LLC	Triangle Town Center, Triangle Town Commons and Triangle Town Place		50.0	%
West Melbourne I, LLC	Hammock Landing Phase I		50.0	%
West Melbourne II, LLC	Hammock Landing Phase II		50.0	%
York Town Center, LP	York Town Center		50.0	%

(1)	Plaza del Sol was sold in June 2010.

Although the Company has majority ownership of certain of these joint ventures, it has evaluated these investments and concluded that the other partners or owners in these joint ventures have substantive participating rights, such as approvals of:

·	the pro forma for the development and construction of the project and any material deviations or modifications thereto;

·	the site plan and any material deviations or modifications thereto;

·	the conceptual design of the project and the initial plans and specifications for the project and any material deviations or modifications thereto;

·	any acquisition/construction loans or any permanent financings/refinancings;

·	the annual operating budgets and any material deviations or modifications thereto;

·	the initial leasing plan and leasing parameters and any material deviations or modifications thereto; and

·	any material acquisitions or dispositions with respect to the project.

As a result of the joint control over these joint ventures, the Company accounts for these investments using the equity method of accounting.

Condensed combined financial statement information for the unconsolidated affiliates is as follows:

	Total for the Three Months Ended June 30,						Company's Share for the Three Months Ended June 30,
	2010			2009			2010			2009

Revenues	$	38,331		$	39,940		$	21,686		$	22,817
Depreciation and amortization expense		(14,286	)		(13,071	)		(8,403	)		(7,471	)
Interest expense		(13,858	)		(12,691	)		(8,449	)		(7,426	)
Other operating expenses		(11,295	)		(13,490	)		(4,647	)		(7,942	)
Gain on sales of real estate assets		1,412			701			170			82
Operating income of discontinued operations		103			4			52			2
Net income	$	407		$	1,393		$	409		$	62

	Total for the Six Months Ended June 30,						Company's Share for the Six Months Ended June 30,
	2010			2009			2010			2009

Revenues	$	77,373		$	81,096		$	42,311		$	47,343
Depreciation and amortization expense		(27,244	)		(25,539	)		(15,205	)		(14,895	)
Interest expense		(27,701	)		(25,234	)		(15,612	)		(15,218	)
Other operating expenses		(23,627	)		(27,045	)		(10,753	)		(16,303	)
Gain on sales of real estate assets		1,290			1,689			121			646
Operating income of discontinued operations		170			46			86			23
Net income	$	261		$	5,013		$	948		$	1,596

Mall Shopping Center Company

In June 2010, the Company’s 50.6% owned unconsolidated joint venture, Mall Shopping Center Company, sold Plaza del Sol in Del Rio, TX. The joint venture recognized a gain of $1,244 from the sale, of which the Company’s share was $75, net of the excess of its basis over its underlying equity in the amount of $554. The results of operations of Mall Shopping Center Company have been reclassified to discontinued operations in the tables above for all periods presented.

CBL Macapa

In September 2008, the Company entered into a condominium partnership agreement with several individual investors to acquire a 60% interest in a new retail development in Macapa, Brazil. The Company provided total funding of $1,189 related to the development. In December 2009, the Company entered into an agreement to sell its 60% interest in this partnership with one of the condominium partnership’s investors for a gross sales price of $1,263, less closing costs for a net sales price of $1,201. The sale closed in March 2010. Upon closing, the buyer paid $200 and gave the Company two notes receivable totaling $1,001, both with an interest rate of 10%, for the remaining balance of the purchase price. There was no gain or loss on this sale. On April 22, 2010, the buyer paid the first note of $300, due on April 23, 2010, plus applicable interest. Upon maturity of the second note of $701, due on June 8, 2010, the buyer requested additional time for payment. The Company and buyer have agreed to revised terms regarding the second note of which the buyer will pay monthly installments of $45 from July 2010 to June 2011, with a final balloon installment of $161 due in July 2011. Interest on the revised note is payable at maturity.Noncontrolling Interests

Noncontrolling interests includes the aggregate noncontrolling partnership interest in the Operating Partnership that is not owned by the Company and for which each of the noncontrolling limited partners has the right to exchange all or a portion of its partnership interests for shares of the Company’s common stock, or at the Company’s election, their cash equivalent. Noncontrolling interests also includes the aggregate noncontrolling ownership interest in the Company’s other consolidated subsidiaries that is held by third parties and for which the related partnership agreements either do not include redemption

provisions or are subject to redemption provisions that do not require classification outside of permanent equity. As of June 30, 2010, the total noncontrolling interests of $284,616 consisted of third-party interests in the Operating Partnership and in other consolidated subsidiaries of $283,737 and $879, respectively. The total noncontrolling interests at December 31, 2009 of $302,483 consisted of third-party interests in the Operating Partnership and in other consolidated subsidiaries of $301,808 and $675, respectively.

Redeemable noncontrolling interests includes a noncontrolling partnership interest in the Operating Partnership that is not owned by the Company and for which the partnership agreement includes redemption provisions that may require the Company to redeem the partnership interest for real property. Redeemable noncontrolling interests also includes the aggregate noncontrolling ownership interest in other consolidated subsidiaries that is held by third parties and for which the related partnership agreements contain redemption provisions at the holder’s election that allow for redemption through cash and/or properties. The total redeemable noncontrolling partnership interests of $25,933 as of June 30, 2010 consisted of third-party interests in the Operating Partnership and in the Company’s consolidated subsidiary that provides security and maintenance services to third parties of $19,461 and $6,472, respectively. At December 31, 2009, the total redeemable noncontrolling partnership interests of $22,689 consisted of third-party interests in the Operating Partnership and in the Company’s consolidated security and maintenance services subsidiary of $16,194 and $6,495, respectively.

The redeemable noncontrolling preferred joint venture interest includes the preferred joint venture units (“PJV units”) issued to the Westfield Group (“Westfield”) for the acquisition of certain properties during 2007. See Note 9 for additional information related to the PJV units. Activity related to the redeemable noncontrolling preferred joint venture interest represented by the PJV units is as follows:

	Six Months Ended June 30,
	2010			2009
Beginning Balance	$	421,570		$	421,279
Net income attributable to redeemable noncontrolling preferred joint venture interest		10,217			10,343
Distributions to redeemable noncontrolling preferred joint venture interest		(10,225	)		(10,165	)
Ending Balance	$	421,562		$	421,457

Cost Method Investments

In February 2007, the Company acquired a 6.2% noncontrolling interest in subsidiaries of Jinsheng, an established mall operating and real estate development company located in Nanjing, China, for $10,125. As of June 30, 2010, Jinsheng owns controlling interests in four home decoration shopping centers, two general retail shopping centers and four development sites.

Jinsheng also issued to the Company a secured convertible promissory note in exchange for cash of $4,875. The note is secured by 16,565,534 Series 2 Ordinary Shares of Jinsheng. The secured note is non-interest bearing and matures upon the earlier to occur of (i) January 22, 2012, (ii) the closing of the sale, transfer or other disposition of substantially all of Jinsheng’s assets, (iii) the closing of a merger or consolidation of Jinsheng or (iv) an event of default, as defined in the secured note. In lieu of the Company’s right to demand payment on the maturity date, the Company may, at its sole option, convert the outstanding amount of the secured note into 16,565,534 Series A-2 Preferred Shares of Jinsheng (which equates to a 2.275% ownership interest).

Jinsheng also granted the Company a warrant to acquire 5,461,165 Series A-3 Preferred Shares for $1,875. The warrant expired on January 22, 2010.

The Company accounts for its noncontrolling interest in Jinsheng using the cost method because the Company does not exercise significant influence over Jinsheng and there is no readily determinable market value of Jinsheng’s shares since they are not publicly traded. The Company initially recorded the secured note at its estimated fair value of $4,513, which included a discount of $362 due to the fact that it is non-interest bearing. The discount is amortized to interest income over the term of the secured note using the effective interest method. The noncontrolling interest and the secured note are reflected as investment in unconsolidated affiliates in the accompanying condensed consolidated balance sheets.

As part of its investment review as of March 31, 2009, the Company determined that its noncontrolling interest in Jinsheng was impaired on an other-than-temporary basis due to a decline in expected future cash flows. The decrease resulted from declining occupancy rates and sales due to the then downturn of the real estate market in China. An impairment charge of $5,306 was recorded in the Company’s condensed consolidated statements of operations for the six months ended June 30, 2009 to reduce the carrying value of the Company’s cost-method investment to its estimated fair value. The Company performed qualitative and quantitative analyses of its noncontrolling investment as of June 30, 2010 and determined that the current balance of its investment is not impaired.

Note 5 – Mortgage and Other Indebtedness

Mortgage and other indebtedness consisted of the following at June 30, 2010 and December 31, 2009, respectively:

	June 30, 2010					December 31, 2009
	Amount		Weighted Average Interest Rate (1)			Amount		Weighted Average Interest Rate (1)
Fixed-rate debt:
Non-recourse loans on operating properties	$	3,849,952		5.94	%	$	3,888,822		6.02	%
Recourse loans on operating properties (2)		159,443		5.27	%		160,896		5.28	%
Total fixed-rate debt		4,009,395		5.92	%		4,049,718		5.99	%
Variable-rate debt:
Recourse term loans on operating properties		377,027		2.09	%		242,763		1.68	%
Secured lines of credit		631,951		3.51	%		759,206		4.19	%
Unsecured term facilities		437,494		1.71	%		437,494		1.73	%
Construction loans		-		-			126,958		2.48	%
Total variable-rate debt		1,446,472		2.59	%		1,566,421		2.97	%
Total	$	5,455,867		5.04	%	$	5,616,139		5.15	%

(1)	Weighted-average interest rate includes the effect of debt premiums (discounts), but excludes amortization of deferred financing costs.

(2)

The Company has entered into interest rate swaps on notional amounts totaling $127,500 as of June 30, 2010 and December 31, 2009 related to two of its variable-rate loans on operating properties to effectively fix the interest rates on those loans. Therefore, these amounts are currently reflected in fixed-rate debt.

Secured Lines of Credit

The Company has three secured lines of credit that are used for mortgage retirement, working capital, construction and acquisition purposes, as well as issuances of letters of credit. Each of these lines is secured by mortgages on certain of the Company’s operating properties. Borrowings under the secured lines of credit bear interest at LIBOR, subject to a floor of 1.50%, plus a margin ranging from 0.75% to 4.25% and had a weighted average interest rate of 3.51% at June 30, 2010. The Company also pays fees based on the amount of unused availability under its two largest secured lines of credit at an annual rate of 0.35% of unused availability. The following summarizes certain information about the secured lines of credit as of June 30, 2010:

	Total Capacity		Total Outstanding		Maturity Date	Extended Maturity Date
$	560,000	$	385,633		August 2011	April 2014
	525,000		243,318	(1)	February 2012	February 2013
	105,000		3,000	(2)	June 2011	N/A
$	1,190,000	$	631,951

(1)	There was an additional $7,291 outstanding on this secured line of credit as of June 30, 2010 for letters of credit. Up to $50,000 of the capacity on this line can be used for letters of credit.

(2)	Subsequent to June 30, 2010, the Company extended the maturity date of this secured line of credit to June 2012.

Subsequent to June 30, 2010, the Company closed on the extension and modification of its secured credit facility with total capacity of $105,000. The facility’s maturity date was extended to June 2012 at its existing interest rate of LIBOR, subject to a floor of 1.50%, plus a margin of 300 basis points. At June 1, 2011, the total capacity on this line of credit could decrease to $82,500 due to an exiting participant lender that has provided $22,500 of this line’s total capacity. The Company is currently negotiating the terms with a potential replacement lender and believes that an agreement with a replacement lender or lenders will be executed prior to that date.

Unsecured Term Facilities

The Company has an unsecured term facility with total capacity of $228,000 that bears interest at LIBOR plus a margin of 1.50% to 1.80% based on the Company’s leverage ratio, as defined in the agreement to the facility. At June 30, 2010, the outstanding borrowings of $228,000 under the unsecured term facility had a weighted average interest rate of 1.95%. The facility matures in April 2011 and has two one-year extension options, which are at the Company’s election, for an outside maturity date of April 2013.

The Company has an unsecured term facility that was obtained for the exclusive purpose of acquiring certain properties from the Starmount Company or its affiliates. At June 30, 2010, the outstanding borrowings of $209,494 under this facility had a weighted average interest rate of 1.45%. The Company completed its acquisition of the properties in February 2008 and, as a result, no further draws can be made against the facility. The unsecured term facility bears interest at LIBOR plus a margin of 0.95% to 1.40% based on the Company’s leverage ratio, as defined in the agreement to the facility. Net proceeds from a sale, or the Company’s share of excess proceeds from any refinancings, of any of the properties originally purchased with borrowings from this unsecured term facility must be used to pay down any remaining outstanding balance. The facility matures in November 2010 and has two one-year extension options, which are at the Company’s election, for an outside maturity date of November 2012.

Letters of Credit

At June 30, 2010, the Company had additional secured and unsecured lines of credit with a total commitment of $20,971 that can only be used for issuing letters of credit. The letters of credit outstanding under these lines of credit totaled $17,655 at June 30, 2010.

Covenants and Restrictions

The $560,000 and $525,000 secured line of credit agreements contain, among other restrictions, certain financial covenants including the maintenance of certain financial coverage ratios, minimum net worth requirements, and limitations on cash flow distributions. The Company was in compliance with all covenants and restrictions at June 30, 2010.

The agreements to the $560,000 and $525,000 secured credit facilities and the two unsecured term facilities described above, each with the same lender, contain default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods) in the event (i) there is a default in the payment of any indebtedness owed by the Company to any institution which is a part of the lender groups for thecredit facilities, or (ii) there is any other type of default with respect to any indebtedness owed by the Company to any institution which is a part of the lender groups for the credit facilities and such lender accelerates the payment of the indebtedness owed to it as a result of such default. The credit facility agreements provide that, upon the occurrence and continuation of an event of default, payment of all amounts outstanding under these credit facilities and those facilities with which these agreements reference cross-default provisions may be accelerated and the lenders’ commitments may be terminated. Additionally, any default in the payment of any recourse indebtedness greater than $50,000 or any non-recourse indebtedness greater than $100,000, regardless of whether the lending institution is a part of the lender groups for the credit facilities, will constitute an event of default under the agreements to the credit facilities.

Forty-seven malls/open-air centers, nine associated centers, three community centers and the corporate office building are owned by special purpose entities that are included in the Company’s consolidated financial statements. The sole business purpose of the special purpose entities is to own and operate these properties. The real estate and other assets owned by these special purpose entities are restricted under the loan agreements in that

they are not available to settle other debts of the Company. However, so long as the loans are not under an event of default, as defined in the loan agreements, the cash flows from these properties, after payments of debt service, operating expenses and reserves, are available for distribution to the Company.

Mortgages on Operating Properties

During the second quarter of 2010, the Company entered into an $83,000 ten-year, non-recourse commercial mortgage-backed securities (“CMBS”) loan with a fixed interest rate of 6.00% secured by Burnsville Center in Minneapolis, MN. The loan replaced an existing $60,683 loan that was scheduled to mature in August 2010. The Company also entered into an eight-year $115,000 loan with a fixed interest rate of 6.98% secured by CoolSprings Galleria in Nashville, TN. Proceeds from the new loan, plus cash on hand, were used to retire an existing loan of $120,463 that was scheduled to mature in September 2010. Additionally, the Company closed on a new ten-year $14,800 loan with a fixed interest rate of 7.25% secured by The Terrace, a community center in Chattanooga, TN. Excess proceeds from these financing activities were used to pay down the Company’s secured credit facilities.

Also during the second quarter, the Company repaid a CMBS loan with a principal balance of $8,988 secured by WestGate Crossing in Spartanburg, SC with borrowings from the $560,000 credit facility and the property was added to the collateral pool securing that facility.

During the first quarter of 2010, the Company closed on a variable-rate $72,000 non-recourse loan that bears interest at LIBOR plus a margin of 400 basis points secured by St. Clair Square in Fairview Heights, IL. The new loan replaced an existing loan with a principal balance of $57,237. The Company has an interest rate cap in place on this loan to limit the LIBOR rate to a maximum of 3.00%. The cap matures in January 2012. The excess proceeds received from the refinancing were used to pay down the secured credit facilities. Also during the first quarter, the Company repaid a CMBS loan secured by Park Plaza Mall in Little Rock, AK with a principal balance of $38,856 with borrowings from the $560,000 credit facility and the property was added to the collateral pool securing that facility.

Subsequent to June 30, 2010, the Company closed on a $65,000 ten-year, non-recourse CMBS loan with a fixed interest rate of 6.50% secured by Valley View Mall in Roanoke, VA. The new loan replaced an existing loan with a principal balance of $40,639 that was scheduled to mature in September 2010. The Company also repaid CMBS loans secured by Parkdale Mall and Parkdale Crossing in Beaumont, TX with an aggregate principal balance of $55,360 with borrowings from the $560,000 credit facility and the properties were added to the collateral pool securing that facility.

Scheduled Principal Payments

As of June 30, 2010, the scheduled principal payments of the Company’s consolidated debt, excluding extensions available at the Company’s option, on all mortgage and other indebtedness, including construction loans and lines of credit, are as follows:

2010	$	715,799
2011		1,148,641
2012		855,475
2013		451,649
2014		189,033
Thereafter		2,090,162
		5,450,759
Net unamortized premiums		5,108
	$	5,455,867

Of the $715,799 of scheduled principal payments in 2010, $680,102 relates to the maturing principal balances of ten operating property loans and an unsecured term facility. Maturing debt with principal balances of $481,371 outstanding as of June 30, 2010 have extensions available at the Company’s option, leaving approximately $198,731 of loan maturities in 2010 that must be retired or refinanced. Three loans secured by

operating properties with a combined principal balance of $95,999 as of June 30, 2010 were either refinanced or repaid subsequent to the end of the quarter. The remaining $102,732 of loan maturities in 2010 represents loans on four operating properties. The Company has term sheets or availability on its lines of credit to address all of the remaining 2010 debt maturities.

The Company’s mortgage and other indebtedness had a weighted average maturity of 3.59 years as of June 30, 2010 and 3.66 years as of December 31, 2009.

Interest Rate Hedge Instruments

The Company records its derivative instruments in its condensed consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the derivative has been designated as a hedge and, if so, whether the hedge has met the criteria necessary to apply hedge accounting.

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps and caps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

The effective portion of changes in the fair value of derivatives designated as, and that qualify as, cash flow hedges is recorded in accumulated other comprehensive income (loss) (“AOCI/L”) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. Such derivatives are used to hedge the variable cash flows associated with variable-rate debt.

As of June 30, 2010, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:

Interest Rate Derivative	Number of Instruments		Notional Amount
Interest Rate Swaps		2	$	127,500
Interest Rate Caps		2	$	152,000

Instrument Type	Location in Consolidated Balance Sheet	Notional Amount		Designated Benchmark Interest Rate	Strike Rate			Fair Value at 6/30/10			Fair Value at 12/31/09			Maturity Date
Cap	Intangible lease assets and other assets	$	72,000 (amortizing to $69,375)	3-month LIBOR		3.000	%	$	21		$	-		Jan-12
Cap	Intangible lease assets and other assets		80,000	USD-SIFMA Municipal Swap Index		4.000	%		-			2		Dec-10
Pay fixed/ Receive variable Swap	Accounts payable and accrued liabilities		40,000	1-month LIBOR		2.175	%		(310	)		(636	)	Nov-10
Pay fixed/ Receive variable Swap	Accounts payable and accrued liabilities		87,500	1-month LIBOR		3.600	%		(887	)		(2,271	)	Sep-10

	Gain Recognized in OCI/L (Effective Portion)				Location of Losses Reclassified from (Effective	Loss Recognized in Earnings (Effective Portion)				Location of Gain (Ineffective	Gain Recognized in Earnings (Ineffective Portion)
Hedging	Three Months Ended June 30,				AOCI/L into Earnings	Three Months Ended June 30,				Recognized in Earnings	Three Months Ended June 30,
Instrument	2010		2009		Portion)	2010		2009		Portion)	2010		2009
Interest rate hedges	$	906	$	3,193	Interest Expense	$	(941)	$	(4,150)	Interest Expense	$	8	$	8

	Gain Recognized in OCI/L (Effective Portion)				Location of Losses Reclassified from (Effective	Loss Recognized in Earnings (Effective Portion)				Location of Gain (Ineffective	Gain Recognized in Earnings (Ineffective Portion)
Hedging	Six Months Ended June 30,				AOCI/L into Earnings	Six Months Ended June 30,				Recognized in Earnings	Six Months Ended June 30,
Instrument	2010		2009		Portion)	2010		2009		Portion)	2010		2009
Interest rate hedges	$	1,515	$	5,123	Interest Expense	$	(1,884)	$	(8,254)	Interest Expense	$	16	$	21

In addition, the Company has a $129,000 notional amount interest rate cap agreement to hedge the risk of changes in cash flows on a loan of one of its properties up to the cap notional amount. The interest rate cap protects the Company from increases in the hedged cash flows attributable to overall changes in 1-month LIBOR above the strike rate of the cap on the debt. The strike rate associated with the interest rate cap is 3.25%. The Company did not designate this cap as a hedge under GAAP and, thus, records any changes in fair value on the cap as interest expense in the condensed consolidated statements of operations. The Company recognized a gain of $6 and a loss of $65 during the three and six months ended June 30, 2009, respectively. No gain or loss was recognized during the three and six months ended June 30, 2010. The interest rate cap had no value as of June 30, 2010 and December 31, 2009 and matures in July 2010.

Note 6 – Comprehensive Income

Comprehensive income includes all changes in redeemable noncontrolling interests and total equity during the period, except those resulting from investments by shareholders and partners, distributions to shareholders and partners and redemption valuation adjustments. Other comprehensive income (“OCI”) includes changes in unrealized gains (losses) on available-for-sale securities, interest rate hedge agreements and foreign currency translation adjustments. The computation of comprehensive income for the three and six months ended June 30, 2010 and 2009 is as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010			2009
Net income	$	4,517	$	25,280	$	31,720		$	39,884
Other comprehensive income:
Net unrealized gain on hedging agreements		906		3,193		1,515			5,123
Net unrealized gain on available-for-sale securities		1,357		2,239		4,896			136
Realized loss on foreign currency translation adjustment		-		27		169			75
Net unrealized gain (loss) on foreign currency translation adjustment		-		3,431		(156	)		4,179
Total other comprehensive income		2,263		8,890		6,424			9,513
Comprehensive income	$	6,780	$	34,170	$	38,144		$	49,397

The components of accumulated other comprehensive income (loss) as of June 30, 2010 and December 31, 2009 are as follows:

	June 30, 2010
	As reported in:
	Redeemable Noncontrolling Interests		Shareholders' Equity		Noncontrolling Interests			Total
Net unrealized gain (loss) on hedging agreements	$	412	$	782	$	(2,639	)	$	(1,445	)
Net unrealized gain on available-for-sale securities		301		3,528		899			4,728
Accumulated other comprehensive income (loss)	$	713	$	4,310	$	(1,740	)	$	3,283

	December 31, 2009
	As reported in:
	Redeemable Noncontrolling Interests		Shareholders' Equity			Noncontrolling Interests			Total
Net unrealized gain (loss) on hedging agreements	$	400	$	(319	)	$	(3,041	)	$	(2,960	)
Net unrealized gain (loss) on available-for-sale securities		261		(29	)		(400	)		(168	)
Net unrealized gain (loss) on foreign currency translation adjustment		396		839			(1,248	)		(13	)
Accumulated other comprehensive income (loss)	$	1,057	$	491		$	(4,689	)	$	(3,141	)

Note 7 – Segment Information

The Company measures performance and allocates resources according to property type, which is determined based on certain criteria such as type of tenants, capital requirements, economic risks, leasing terms, and short and long-term returns on capital. Rental income and tenant reimbursements from tenant leases provide the majority of revenues from all segments. Information on the Company’s reportable segments is presented as follows:

Three Months Ended June 30, 2010	Malls			Associated Centers			Community Centers			All Other (2)			Total
Revenues	$	232,973		$	10,483		$	7,635		$	11,055		$	262,146
Property operating expenses (1)		(76,371	)		(2,717	)		(2,382	)		5,529			(75,941	)
Interest expense		(58,135	)		(1,934	)		(1,875	)		(11,397	)		(73,341	)
Other expense		-			-			-			(6,415	)		(6,415	)
Gain on sales of real estate assets		1,149			-			-			-			1,149
Segment profit (loss)	$	99,616		$	5,832		$	3,378		$	(1,228	)		107,598
Depreciation and amortization expense														(70,652	)
General and administrative expense														(10,321	)
Interest and other income														948
Loss on impairment of real estate														(25,435	)
Equity in earnings of unconsolidated affiliates														409
Income tax benefit														1,911
Income from continuing operations													$	4,458
Capital expenditures (3)	$	31,668		$	3,096		$	1,696		$	12,500		$	48,960

Three Months Ended June 30, 2009	Malls			Associated Centers			Community Centers			All Other (2)			Total
Revenues	$	241,001		$	10,304		$	3,687		$	11,532		$	266,524
Property operating expenses (1)		(80,258	)		(2,459	)		(1,005	)		6,502			(77,220	)
Interest expense		(61,721	)		(2,173	)		(996	)		(7,952	)		(72,842	)
Other expense		(2	)		-			-			(5,912	)		(5,914	)
Gain on sales of real estate assets		4			-			9			59			72
Segment profit	$	99,024		$	5,672		$	1,695		$	4,229			110,620
Depreciation and amortization expense														(75,793	)
General and administrative expense														(10,893	)
Interest and other income														1,362
Equity in earnings of unconsolidated affiliates														62
Income tax provision														(152	)
Income from continuing operations													$	25,206
Capital expenditures (3)	$	47,996		$	2,641		$	429		$	23,352		$	74,418

Six Months Ended June 30, 2010	Malls			Associated Centers			Community Centers			All Other (2)			Total
Revenues	$	470,729		$	20,854		$	14,254		$	22,485		$	528,322
Property operating expenses (1)		(156,809	)		(5,579	)		(5,219	)		11,593			(156,014	)
Interest expense		(116,472	)		(3,978	)		(3,680	)		(22,671	)		(146,801	)
Other expense		-			-			-			(13,116	)		(13,116	)
Gain (loss) on sales of real estate assets		1,113			-			984			(82	)		2,015
Segment profit (loss)	$	198,561		$	11,297		$	6,339		$	(1,791	)		214,406
Depreciation and amortization expense														(142,664	)
General and administrative expense														(21,395	)
Interest and other income														1,999
Loss on impairment of real estate														(25,435	)
Equity in earnings of unconsolidated affiliates														948
Income tax benefit														3,788
Income from continuing operations													$	31,647
Total assets	$	6,574,654		$	327,793		$	67,633		$	686,897		$	7,656,977
Capital expenditures (3)	$	55,862		$	5,165		$	2,732		$	19,017		$	82,776

Six Months Ended June 30, 2009	Malls			Associated Centers			Community Centers			All Other (2)			Total
Revenues	$	485,032		$	20,758		$	9,057		$	22,737		$	537,584
Property operating expenses (1)		(164,350	)		(5,513	)		(3,072	)		11,550			(161,385	)
Interest expense		(122,560	)		(4,340	)		(2,020	)		(15,807	)		(144,727	)
Other expense		(2	)		-			-			(11,069	)		(11,071	)
Gain (loss) on sales of real estate assets		(1	)		-			98			(164	)		(67	)
Segment profit	$	198,119		$	10,905		$	4,063		$	7,247			220,334
Depreciation and amortization expense														(154,104	)
General and administrative expense														(22,372	)
Interest and other income														2,943
Loss on impairment of investment														(7,706	)
Equity in earnings of unconsolidated affiliates														1,596
Income tax provision														(755	)
Income from continuing operations													$	39,936
Total assets	$	6,884,164		$	334,788		$	70,489		$	654,091		$	7,943,532
Capital expenditures (3)	$	71,076		$	8,847		$	1,384		$	64,362		$	145,669

(1)	Property operating expenses include property operating, real estate taxes and maintenance and repairs.
(2)	The All Other category includes mortgage notes receivable, Office Buildings, the Management Company and the Company’s subsidiary that provides security and maintenance services.
(3)	Amounts include acquisitions of real estate assets and investments in unconsolidated affiliates. Developments in progress are included in the All Other category.

Note 8 – Earnings Per Share

During the first quarter of 2010, the Company completed an underwritten public offering of 6,300,000 depositary shares, each representing 1/10th of a share of the Company’s 7.375% Series D Cumulative Redeemable Preferred Stock, having a liquidation preference of $25.00 per depositary share. The depositary shares were sold at $20.30 per share including accrued dividends of $0.37 per share. The net proceeds, after underwriting costs and related expenses, of approximately $123,599 were used to reduce outstanding borrowings under the Company’s credit facilities and for general corporate purposes. The net proceeds included aggregate accrued dividends of $2,331 that were received as part of the offering price.

Including the shares issued in this offering, the Company now has 13,300,000 depositary shares outstanding, each representing 1/10th of a share of its 7.375% Series D Cumulative Redeemable Preferred Stock. The securities are redeemable at liquidation preference, plus accrued and unpaid dividends, at any time at the option of the Company. These securities have no stated maturity, sinking fund or mandatory redemption provisions and are not convertible into any other securities of the Company.

In June 2009, the Company completed a public offering of 66,630,000 shares of its $0.01 par value common stock for $6.00 per share. The net proceeds, after underwriting costs and related expenses, of approximately $381,823 were used to repay outstanding borrowings under the Company’s credit facilities.

In February 2009, the Company’s Board of Directors declared a quarterly dividend for the Company's common stock of $0.37 per share for the quarter ended March 31, 2009, to be paid in a combination of cash and shares of the Company’s common stock. The dividend was paid on 66,407,096 shares of common stock outstanding on the record date. The Company issued 4,754,355 shares of its common stock in connection with the dividend, which resulted in an increase of 7.2% in the number of shares outstanding. The Company initially elected to treat the issuance of its common stock as a stock dividend for per share purposes and adjusted all share and per share information related to earnings per share on a retrospective basis to reflect the additional common stock issued. However, in January 2010, the FASB issued ASU No. 2010-01, requiring that stock dividends such as the one the Company made in April 2009 be treated as a stock issuance that is reflected in share and per share information related to EPS on a prospective basis. Pursuant to its provisions, the Company adopted this guidance effective January 1, 2009 on a retrospective basis. Thus, the information presented for the three and six months ended June 30, 2009, has been revised to reflect this guidance.

Basic EPS is computed by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Diluted EPS assumes the issuance of common stock for all potential dilutive common shares outstanding. The limited partners’ rights to convert their noncontrolling interests in the Operating Partnership into shares of common stock are not dilutive.

The following summarizes the impact of potential dilutive common shares on the denominator used to compute earnings per share:

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2009		2010		2009
Denominator – basic earnings per share		138,068		82,187		138,018		74,341
Dilutive effect of deemed shares related to deferred compensation arrangements		44		39		41		37
Denominator – diluted earnings per share		138,112		82,226		138,059		74,378

Note 9 – Contingencies

The Company is currently involved in certain litigation that arises in the ordinary course of business. It is management’s opinion that the pending litigation will not materially affect the financial position or results of operations of the Company.

The Company consolidates its investment in a joint venture, CW Joint Venture, LLC (“CWJV”), with Westfield. The terms of the joint venture agreement require that CWJV pay an annual preferred distribution at a rate of 5.0%, which increases to 6.0% on July 1, 2013, on the preferred liquidation value of the PJV units of CWJV that are held by Westfield. Westfield has the right to have all or a portion of the PJV units redeemed by CWJV with property owned by CWJV, and subsequent to October 16, 2012, with either cash or property owned by CWJV, in each case for a net equity amount equal to the preferred liquidation value of the PJV units. At any time after January 1, 2013, Westfield may propose that CWJV acquire certain qualifying property that would be used to redeem the PJV units at their preferred liquidation value. If CWJV does not redeem the PJV units with such qualifying property (a “Preventing Event”), then the annual preferred distribution rate on the PJV units increases to 9.0% beginning July 1, 2013. The Company will have the right, but not the obligation, to offer to redeem the PJV units after January 31, 2013 at their preferred liquidation value, plus accrued and unpaid distributions. If the Company fails to make such an offer, the annual preferred distribution rate on the PJV units increases to 9.0% for the period from July 1, 2013 through June 30, 2016, at which time it decreases to 6.0% if a Preventing Event has not occurred. If, upon redemption of the PJV units, the fair value of the Company’s common stock is greater than $32.00 per share, then such excess (but in no case greater than $26,000 in the aggregate) shall be added to the aggregate preferred liquidation value payable on account of the PJV units. The Company accounts for this contingency using the method prescribed for earnings or other performance measure contingencies. As such, should this contingency result in additional consideration to Westfield, the Company will record the current fair value of the consideration issued as a purchase price adjustment at the time the consideration is paid or payable.

Guarantees

The Company may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on the Company’s investment in the joint venture. The Company may receive a fee from the joint venture for providing the guaranty. Additionally, when the Company issues a guaranty, the terms of the joint venture agreement typically provide that the Company may receive indemnification from the joint venture.

The Company owns a parcel of land that it is ground leasing to a third party developer for the purpose of developing a shopping center. The Company has guaranteed 27% of the third party’s construction loan and bond line of credit (the “loans”) of which the maximum guaranteed amount is $31,554. The total amount outstanding at June 30, 2010 on the loans was $77,201 of which the Company has guaranteed $20,844. The third party’s loans matured in June 2010. The third party is currently renegotiating the terms of the loans and the Company anticipates that the loans will be extended on renegotiated terms in the third quarter. The Company recorded an obligation of $315 in the accompanying condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of its guaranty.

The Company has guaranteed 100% of the construction and land loans of West Melbourne I, LLC (“West Melbourne”), an unconsolidated affiliate in which the Company owns a 50% interest, of which the maximum guaranteed amount is $50,678. West Melbourne developed Hammock Landing, a community center in West Melbourne, FL that opened in April 2009. The total amount outstanding at June 30, 2010 on the loans was $45,610. The guaranty will expire upon repayment of the debt. The land loan, representing $3,276 of the amount outstanding at June 30, 2010, matures in August 2010 and has a one-year extension option available. The construction loan, representing $42,334 of the amount outstanding at June 30, 2010, matures in August 2011 and has two one-year extension options available. The Company recorded an obligation of $670 in the accompanying condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of this guaranty.

The Company has guaranteed 100% of the construction loan of Port Orange I, LLC (“Port Orange”), an unconsolidated affiliate in which the Company owns a 50% interest, of which the maximum guaranteed amount is $97,183. Port Orange developed and, in March 2010, opened The Pavilion at Port Orange, a community center in Port Orange, FL. The total amount outstanding at June 30, 2010 on the loan was $69,363. The guaranty will expire upon repayment of the debt. The loan matures in December 2011 and has extension options available. The Company has recorded an obligation of $1,120 in the accompanying condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of this guaranty.

The Company has guaranteed the lease performance of York Town Center, LP (“YTC”), an unconsolidated affiliate in which we own a 50% interest, under the terms of an agreement with a third party that owns property as part of York Town Center. Under the terms of that agreement, YTC is obligated to cause performance of the third party’s obligations as landlord under its lease with its sole tenant, including, but not limited to, provisions such as co-tenancy and exclusivity requirements. Should YTC fail to cause performance, then the tenant under the third party landlord’s lease may pursue certain remedies ranging from rights to terminate its lease to receiving reductions in rent. The Company has guaranteed YTC’s performance under this agreement up to a maximum of $22,000, which decreases by $800 annually until the guaranteed amount is reduced to $10,000. The guaranty expires on December 31, 2020. The maximum guaranteed obligation was $18,800 as of June 30, 2010. The Company entered into an agreement with its joint venture partner under which the joint venture partner has agreed to reimburse the Company 50% of any amounts it is obligated to fund under the guaranty. The Company did not record an obligation for this guaranty because it determined that the fair value of the guaranty is not material.

The Company has guaranteed 100% of a construction loan of JG Gulf Coast Town Center, LLC, an unconsolidated affiliate in which the Company owns a 50% interest, of which the maximum guaranteed amount is $11,561. Proceeds from the construction loan are designated for the development of Phase III of Gulf Coast Town Center, an open-air center in Fort Myers, FL. The total amount outstanding at June 30, 2010 on the loans was $11,561. The guaranty will expire upon repayment of the debt. The loan matures in April 2011 and has a one year extension option available. The Company did not record an obligation for this guaranty because it determined that the fair value of the guaranty is not material.

Performance Bonds

The Company has issued various bonds that it would have to satisfy in the event of non-performance. At June 30, 2010 and December 31, 2009, the total amount outstanding on these bonds was $31,892 and $34,429, respectively.

Sale of Real Estate

As discussed in Note 3, subsequent to June 30, 2010, the Company entered into a contract to sell Oak Hollow Mall in High Point, NC, subject to due diligence and customary closing conditions, for a sales price that is significantly less than the property’s carrying value. The impending sale was considered in the Company’s quarterly impairment review process, which resulted in a loss on impairment of real estate of $25,435 for the three and six month periods ended June 30, 2010. If the sale of this property closes in accordance with the terms of the current contract, the lender of the non-recourse loan secured by this property with a principal balance of $39,559 as of June 30, 2010 has agreed to modify the outstanding principal balance of the loan to equal the net sales price of the property. Should this occur, the Company anticipates recording a gain on extinguishment of debt of approximately $27,977 upon completion of the disposition.

Note 10 – Share-Based Compensation

Share-based compensation expense was $632 and $913 for the three months ended June 30, 2010 and 2009, respectively, and $1,561 and $1,875 for the six months ended June 30, 2010 and 2009, respectively. Share-based compensation cost capitalized as part of real estate assets was $48 and $61 for the three months ended June 30, 2010 and 2009, respectively, and $94 and $132 for the six months ended June 30, 2010 and 2009, respectively.

The Company’s stock option activity for the six months ended June 30, 2010 is summarized as follows:

	Shares			Weighted Average Exercise Price
Outstanding at January 1, 2010		566,334		$	16.06
Exercised		(77,509	)		12.14
Cancelled		(1,200	)		18.27
Outstanding at June 30, 2010		487,625			16.68
Vested and exercisable at June 30, 2010		487,625			16.68

A summary of the status of the Company’s stock awards as of June 30, 2010, and changes during the six months ended June 30, 2010, is presented below:

	Shares			Weighted Average Grant-Date Fair Value
Nonvested at January 1, 2010		156,120		$	33.16
Granted		119,100			10.34
Vested		(83,350	)		34.54
Cancelled		(820	)		18.02
Nonvested at June 30, 2010		191,050			18.40

As of June 30, 2010, there was $2,574 of total unrecognized compensation cost related to nonvested stock awards granted under the plan, which is expected to be recognized over a weighted average period of 3.0 years. In February 2010, the Company granted restricted stock awards for 113,600 shares of common stock to employees that will vest in equal installments over the next five years. In January 2010, the Company granted restricted stock awards for a total of 4,500 shares of common stock to its non-employee directors and granted an additional award of 1,000 shares in conjunction with the election of a new non-employee director in May 2010.

Note 11 – Noncash Investing and Financing Activities

The Company’s noncash investing and financing activities were as follows for the six months ended June 30, 2010 and 2009:

	Six Months Ended June 30,
	2010		2009
Accrued dividends and distributions payable	$	43,116	$	29,202
Additions to real estate assets accrued but not yet paid		13,624		13,475
Issuance of common stock for dividend		-		14,739
Issuance of noncontrolling interests in Operating Partnership for distribution		-		4,148
Notes receivable from sale of interest in unconsolidated affiliate		1,001		1,750
Additions to real estate assets from forgiveness of mortgage note receivable		-		6,502

Note 12 – Income Taxes

The Company is qualified as a REIT under the provisions of the Code. To maintain qualification as a REIT, the Company is required to distribute at least 90% of its taxable income to shareholders and meet certain other requirements.

As a REIT, the Company is generally not liable for federal corporate income taxes. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal and state income taxes on its taxable income at regular corporate tax rates. Even if the Company maintains its qualification as a REIT, the Company may be subject to certain state and local taxes on its income and property, and to federal income and excise taxes on its undistributed income. State tax expense was $1,324 and $1,969 during the three months ended June 30, 2010 and 2009, respectively, and $2,264 and $3,625 during the six months ended June 30, 2010 and 2009, respectively.

The Company has also elected taxable REIT subsidiary status for some of its subsidiaries. This enables the Company to receive income and provide services that would otherwise be impermissible for REITs. For these entities, deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted tax rates expected to be in effect when the temporary differences reverse. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized. An increase or decrease in the valuation allowance resulting from changes in circumstances that may affect the realizability of the related deferred tax asset is included in income or expense, as applicable.

The Company recorded an income tax benefit of $1,911 and an income tax provision of $152 for the three months ended June 30, 2010 and 2009, respectively. The income tax benefit in 2010 consisted of a current tax benefit of $4,980 and a deferred tax provision of $3,069. The income tax provision in 2009 consisted of a current tax benefit of $251 and a deferred tax provision of $403.

The Company recorded an income tax benefit of $3,788 and an income tax provision of $755 for the six months ended June 30, 2010 and 2009, respectively. The income tax benefit in 2010 consisted of a current tax benefit of $6,370 and a deferred tax provision of $2,582. The income tax provision in 2009 consisted of a current income tax provision of $1,075 and a deferred tax benefit of $320.

The Company had deferred tax assets of $6,226 and $3,634 at June 30, 2010 and December 31, 2009, respectively. The Company had a deferred tax liability of $2,941 at June 30, 2010. There was no deferred tax liability as of December 31, 2009. The deferred taxes at June 30, 2010 and December 31, 2009 consisted primarily of operating expense accruals and differences between book and tax depreciation.

The Company reports any income tax penalties attributable to its properties as property operating expenses and any corporate-related income tax penalties as general and administrative expenses in its statement of operations. In addition, any interest incurred on tax assessments is reported as interest expense. The Company reported nominal interest and penalty amounts for the three and six months ended June 30, 2010 and 2009, respectively.

ITEM 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that are included in this Form 10-Q. Capitalized terms used, but not defined, in this Management’s Discussion and Analysis of Financial Condition and Results of Operations have the same meanings as defined in the notes to the condensed consolidated financial statements. In this discussion, the terms “we”, “us”, “our” and the “Company” refer to CBL & Associates Properties, Inc. and its subsidiaries.

Certain statements made in this section or elsewhere in this report may be deemed “forward-looking statements” within the meaning of the federal securities laws. In many cases, these forward-looking statements may be identified by the use of words such as “will,” “may,” “should,” “could,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “projects,” “goals,” “objectives,” “targets,” “predicts,” “plans,” “seeks,” or similar expressions. Any forward-looking statement speaks only as of the date on which it is made and is qualified in its entirety by reference to the factors discussed throughout this report.

Although we believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, forward-looking statements are not guarantees of future performance or results and we can give no assurance that these expectations will be attained. It is possible that actual results may differ materially from those indicated by these forward-looking statements due to a variety of known and unknown risks and uncertainties. In addition to the risk factors described in Part II, Item 1A. of this report, such known risks and uncertainties include, without limitation:

·	general industry, economic and business conditions;

·	interest rate fluctuations, costs and availability of capital and capital requirements;

·	costs and availability of real estate;

·	inability to consummate acquisition opportunities;

·	competition from other companies and retail formats;

·	changes in retail rental rates in our markets;

·	shifts in customer demands;

·	tenant bankruptcies or store closings;

·	changes in vacancy rates at our properties;

·	changes in operating expenses;

·	changes in applicable laws, rules and regulations; and

·	the ability to obtain suitable equity and/or debt financing and the continued availability of financing in the amounts and on the terms necessary to support our future business.

This list of risks and uncertainties is only a summary and is not intended to be exhaustive. We disclaim any obligation to update or revise any forward-looking statements to reflect actual results or changes in the factors affecting the forward-looking information.

EXECUTIVE OVERVIEW

We are a self-managed, self-administered, fully integrated real estate investment trust (“REIT”) that is engaged in the ownership, development, acquisition, leasing, management and operation of regional shopping malls, open-air centers, community centers and office properties. Our shopping centers are located in 27 states, but are primarily in the southeastern and midwestern United States. We have elected to be taxed as a REIT for federal income tax purposes.

As of June 30, 2010, we owned controlling interests in 76 regional malls/open-air centers (including one mixed-use center), 30 associated centers (each located adjacent to a regional mall), ten community centers and 13 office buildings, including our corporate office building. We consolidate the financial statements of all entities in which we have a controlling financial interest or where we are the primary beneficiary of a variable interest entity. As of June 30, 2010, we owned noncontrolling interests in eight regional malls, four associated centers, four community centers and six office buildings. Because one or more of the other partners have substantive participating rights, we do not control these partnerships and joint ventures and, accordingly, account for these investments using the equity method. We had one community center, owned in a 75/25 joint venture, under construction at June 30, 2010. We also hold options to acquire certain development properties owned by third parties.

During the second quarter of 2010, signs of positive results from our focus on creating revenue growth in our portfolio became evident. Our overall portfolio occupancy level increased 160 basis points over the second quarter of the prior year. We completed lease signings for nearly 1.3 million square feet of space in our operating properties and new developments. In addition, same-store sales per square foot for the six months ended June 30, 2010 for stabilized mall tenants increased 2.1% over the prior-year period.

During the quarter, we also entered into financing transactions related to our pro rata share of consolidated and unconsolidated debt totaling $233.8 million secured by four operating properties, one of which is unconsolidated, generating excess proceeds of $27.1 million after repayment of existing loans. We also repaid a mortgage with a principal balance of $9.0 million with proceeds from our $560.0 million secured line of credit. Subsequent to June 30, 2010, we completed a refinancing of $65.0 million secured by one of our operating properties, generating excess proceeds of $24.4 million after repayment of an existing loan, and repaid two CMBS loans with an aggregate principal balance of $55.4 million secured by two operating properties with proceeds from our $560.0 million secured line of credit. In addition, we extended the maturity date of our secured line of credit with total capacity of $105.0 million from June 2011 to June 2012. We have term sheets or availability on our lines of credit to address all of our remaining 2010 debt maturities. Including the use of the net proceeds received from our preferred stock offering in the first quarter of 2009, we have reduced our overall debt level by almost $233.0 million as compared to June 30, 2009.

These accomplishments continue to emphasize the strength of our company and validate our strategic focus. While the current retail real estate environment remains challenging, we believe CBL is emerging in a slow recovery with more efficient operations, an aggressive leasing strategy and continued success in securing capital on favorable terms. We will look to maintain improvements in the performance of our portfolio over the remainder of the year and consistently build on our achievements.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended June 30, 2010 to the Three Months Ended June 30, 2009

We have acquired or opened five community centers since January 1, 2009 (collectively referred to as the “New Properties”). These transactions impact the comparison of the results of operations for the three and six months ended June 30, 2010 to the results of operations for the comparable periods ended June 30, 2009. Properties that were in operation as of January 1, 2009 and June 30, 2010 are referred to as the “Comparable Properties.” We do not consider a property to be one of the Comparable Properties until it has been owned or open for one complete calendar year. The New Properties are as follows:

Property	Location	Date Opened
New Developments:
Hammock Landing (1)	West Melbourne, FL	April 2009
Summit Fair (2)	Lee's Summit, MO	August 2009
Settlers Ridge	Robinson Township, PA	October 2009
The Promenade	D'Iberville, MS	October 2009
The Pavilion at Port Orange (1)	Port Orange, FL	March 2010

(1)	This property represents a 50/50 joint venture that is accounted for using the equity method of accounting and is included in equity in earnings of unconsolidated affiliates in the accompanying consolidated statements of operations.

(2)	CBL’s interest represents cost of the land underlying the project for which it will receive ground rent and a percentage of the net operating cash flows.

Any reference to the New Properties in the discussion below excludes those properties that are accounted for using the equity method of accounting.

Revenues

Total revenues declined by $4.4 million for the three months ended June 30, 2010 compared to the prior- year period. Rental revenues and tenant reimbursements declined by $4.6 million due to a decrease of $7.3 million from the Comparable Properties, partially offset by an increase of $2.7 million from the New Properties. The decrease in revenues of the Comparable Properties was driven by declines of $5.4 million in tenant reimbursements, $1.3 million in base rents and $0.7 million in net below market lease amortization. Tenant reimbursements have decreased primarily due to certain tenants converting their lease payment terms to percent in lieu or base rent. Base rents and tenant reimbursements have both been impacted by negative leasing spreads over the past year.

The decline in our cost recovery ratio to 100.5% for the quarter ended June 30, 2010 from 105.8% for the prior-year period is primarily attributable to the significant decline in tenant reimbursements, as discussed above.

Management, development and leasing fees remained stable for the quarter ended June 30, 2010 compared to the prior year quarter. While development fee income declined $0.3 million during the quarter due to the completion in the prior year of certain joint venture developments that were under construction during the first half of 2009, we experienced an offsetting increase in management and leasing fee income.

Other revenues increased $0.3 million primarily due to higher revenues related to our subsidiary that provides security and maintenance services to third parties.

Operating Expenses

Total expenses increased $19.0 million for the three months ended June 30, 2010 compared to the prior-year period, primarily as a result of a $25.4 million loss on impairment of real estate, as discussed further below. Property operating expenses, including real estate taxes and maintenance and repairs, decreased $1.3 million due to lower expenses of $2.3 million related to the Comparable Properties, partially offset by an increase of $1.0 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $1.4 million in bad debt expense, $0.5 million in promotion-related costs, $0.3 million in land rent expense and $0.2 million in state tax expense.

The decrease in depreciation and amortization expense of $5.1 million resulted from a decrease of $6.6 million from the Comparable Properties, partially offset by an increase of $1.5 million related to the New Properties. The decrease attributable to the Comparable Properties is due to a decline in amortization of tenant allowances compared to the prior-year period, which included write-offs of certain unamortized tenant allowances related to several store closings.

During the course of our normal quarterly impairment review process for the second quarter of 2010, it was determined that a write-down of the depreciated book value of Oak Hollow Mall in High Point, NC, to its estimated fair value was necessary, resulting in a non-cash loss on impairment of real estate assets of $25.4 million for the three months ended June 30, 2010. Subsequent to June 30, 2010, the Company entered into a contract to sell this property, subject to due diligence and customary closing conditions, for a sales price that is significantly less than the property’s carrying value. The impending sale was considered in the quarterly impairment review process, which resulted in a fair value of approximately $11.6 million. If the sale of this property closes in accordance with the terms of the current contract, the lender of the non-recourse loan secured by this property with a principal balance of approximately $39.6 million as of June 30, 2010 has agreed to modify the outstanding principal balance of the loan to equal the net sales price of the property. Should this occur, we anticipate recording a gain on extinguishment of debt of approximately $28.0 million upon completion of the disposition.

General and administrative expenses decreased $0.6 million primarily as a result of declines of $0.3 million in payroll and related expenses and $0.5 million in state tax expense, partially offset by a reduction in capitalized overhead of $0.3 million. As a percentage of revenues, general and administrative expenses were 3.9% and 4.1% for the second quarters of 2010 and 2009, respectively.

Other expenses increased $0.5 million primarily due to higher expenses related to our subsidiary that provides security and maintenance services to third parties.

Other Income and Expenses

Interest expense increased $0.5 million for the three months ended June 30, 2010 compared to the prior-year period. Although we have reduced our overall outstanding debt balance since the prior-year period, we have experienced an increase in our variable-rate debt primarily due to the expiration of two interest rate swaps on December 30, 2009 that had effectively fixed the interest rate on $400.0 million of borrowings under our $525.0 million secured line of credit. The resulting interest savings from our overall decrease in debt have been partially offset by an increase in the variable rates on our credit facilities. Additionally, capitalized interest has declined due to the opening of the New Properties in 2009. Furthermore, interest expense during the second quarter of 2010 includes amortization of fees incurred in connection with the extension of our credit facilities in the latter half of 2009.

During the second quarter of 2010, we recognized a gain on sales of real estate assets of $1.1 million related to the sale of two parcels of land. Results for the second quarter of 2009 included the sale of an easement.

Equity in earnings of unconsolidated affiliates increased by $0.4 million during the second quarter of 2010, primarily due to the opening of a new development.

The income tax benefit of $1.9 million for the three months ended June 30, 2010 relates to our taxable REIT subsidiary and consists of a current tax benefit of $5.0 million and a deferred income tax provision of $3.1 million. During the three months ended June 30, 2009, we recorded an income tax provision $0.2 million, consisting of a current tax benefit of $0.2 million, partially offset by a deferred income tax provision of $0.4 million.

Discontinued operations for the three months ended June 30, 2010 and 2009 include the true up of estimated expenses to actual amounts for properties sold during previous years.

Comparison of the Six Months Ended June 30, 2010 to the Six Months Ended June 30, 2009

Revenues

Total revenues declined by $9.3 million for the six months ended June 30, 2010 compared to the prior-year period. Rental revenues and tenant reimbursements declined by $9.9 million due to a decrease of $14.5 million from the Comparable Properties, partially offset by an increase of $4.6 million from the New Properties. The decrease in revenues of the Comparable Properties was driven by declines of $7.6 million in tenant reimbursements, $2.9 million in base rents, $1.8 million in lease termination fees and $1.4 million in net below market lease amortization. Tenant reimbursements have decreased primarily due to certain tenants converting their lease payment terms to percent in lieu or base rent. Base rents and tenant reimbursements have both been impacted by negative leasing spreads over the past year.

Our cost recovery ratio declined to 100.1% for the six months ended June 30, 2010 from 101.1% for the prior-year period primarily due to the significant decline in tenant reimbursements.

The decrease in management, development and leasing fees of $0.8 million was mainly attributable to lower development fee income due to the completion in the prior year of certain joint venture developments that were under construction during the prior-year period.

Other revenues increased $1.4 million primarily due to higher revenues related to our subsidiary that provides security and maintenance services to third parties.

Operating Expenses

Total expenses increased $9.7 million for the six months ended June 30, 2010 compared to the prior-year period, primarily as a result of a $25.4 million loss on impairment of real estate, as discussed further below. However, property operating expenses, including real estate taxes and maintenance and repairs, decreased $5.4 million due to lower expenses of $7.4 million related to the Comparable Properties, partially offset by an increase of $2.0 million of expenses attributable to the New Properties. The decrease in property operating expenses of the Comparable Properties is primarily attributable to reductions of $2.7 million in promotion-related costs, $1.3 million in utilities expense, $1.2 million in security and maintenance expenses and $1.8 million in bad debt expense. Property operating expenses continued to benefit from the cost containment program that we implemented in late 2008 and 2009.

The decrease in depreciation and amortization expense of $11.4 million resulted from a decrease of $14.1 million from the Comparable Properties, partially offset by an increase of $2.7 million related to the New Properties. The decrease attributable to the Comparable Properties is primarily due to a decline in amortization of tenant allowances compared to the prior-year period, which included write-offs of certain unamortized tenant allowances related to several store closings.

property closes in accordance with the terms of the current contract, the lender of the non-recourse loan secured by this property with a principal balance of approximately $39.6 million as of June 30, 2010 has agreed to modify the outstanding principal balance of the loan to equal the net sales price of the property. Should this occur, we anticipate recording a gain on extinguishment of debt of approximately $28.0 million upon completion of the disposition.

General and administrative expenses decreased $1.0 million primarily as a result of declines of $1.0 million in payroll and related expenses and $1.1 million in state tax expense, partially offset by a reduction in capitalized overhead of $1.0 million. As a percentage of revenues, general and administrative expenses were 4.0% and 4.2% for the six months ended June 30, 2010 and 2009, respectively.

Other expenses increased $2.0 million primarily due to higher expenses related to our subsidiary that provides security and maintenance services to third parties.

Other Income and Expenses

Interest expense increased $2.1 million for the six months ended June 30, 2010 compared to the prior-year period. Although we have reduced our overall outstanding debt balance since the prior-year period, we have experienced an increase in our variable-rate debt primarily due to the expiration of two interest rate swaps on December 30, 2009 that had effectively fixed the interest rate on $400.0 million of borrowings under our $525.0 million secured line of credit. The resulting interest savings from our overall decrease in debt have been partially offset by an increase in the variable rates on our credit facilities. Our weighted average interest rate on total variable-rate debt increased 111 basis points compared to the prior-year period. Additionally, capitalized interest has declined due to the opening of the New Properties in 2009. Furthermore, interest expense during the first half of 2010 includes amortization of fees incurred in connection with the extension of our credit facilities in the latter half of 2009.

During the six months ended June 30, 2009, we incurred an impairment loss of $7.7 million on our investment in Jinsheng Group (“Jinsheng”), an established mall operating and real estate development company located in Nanjing, China, due to a decline in expected future cash flows. The decrease was a result of declining occupancy and sales due to the then downturn of the real estate market in China.

During the six months ended June 30, 2010, we recognized a gain on sales of real estate assets of $2.0 million related to the sale of three parcels of land. We recognized a loss on sales of real estate assets of $0.1 million during the six months ended June 30, 2009 due to the disposition of one of our investments in Brazil.

Equity in earnings of unconsolidated affiliates decreased by $0.6 million during the six months ended June 30, 2010 primarily due to a decline in outparcel sales compared to the prior-year period, partially offset by an increase related to the opening of a new development.

The income tax benefit of $3.8 million for the six months ended June 30, 2010 relates to our taxable REIT subsidiary and consists of a current tax benefit of $6.4 million, partially offset by a deferred income tax provision of $2.6 million. During the six months ended June 30, 2009, we recorded an income tax provision $0.8 million, consisting of a provision for current income taxes of $1.1 million, partially offset by a deferred tax benefit of $0.3 million.

Discontinued operations for the six months ended June 30, 2010 and 2009 include the true up of estimated expenses to actual amounts for properties sold during previous years.

Operational Review

The shopping center business is, to some extent, seasonal in nature with tenants typically achieving the highest levels of sales during the fourth quarter due to the holiday season, which generally results in higher percentage rents in the fourth quarter. Additionally, the malls earn most of their “temporary” rents (rents from short-term tenants) during the holiday period. Thus, occupancy levels and revenue production are generally the highest in the fourth quarter of each year. Results of operations realized in any one quarter may not be indicative of the results likely to be experienced over the course of the fiscal year.

We classify our regional malls into two categories – malls that have completed their initial lease-up are referred to as stabilized malls and malls that are in their initial lease-up phase and have not been open for three calendar years are referred to as non-stabilized malls. Alamance Crossing in Burlington, NC, which opened in August 2007, and our mixed-use center, Pearland Town Center (the financial results of which are classified in Malls), which opened in July 2008, are our only non-stabilized malls as of June 30, 2010.

We derive a significant amount of our revenues from the mall properties. The sources of our revenues by property type were as follows:

	Six Months Ended June 30,
	2010			2009
Malls		89.1	%		90.2	%
Associated centers		3.9	%		3.9	%
Community centers		2.7	%		1.7	%
Mortgages, office building and other		4.3	%		4.2	%

Mall store sales per square foot for the six months ended June 30, 2010 for our portfolio increased 2.1% from the prior-year period. Mall store sales for the trailing twelve months ended June 30, 2010 on a comparable per square foot basis were $316 per square foot compared with $321 per square foot in the prior-year period, a decline of 1.5%.

Occupancy

Our portfolio occupancy is summarized in the following table:

	At June 30,
	2010			2009
Total portfolio occupancy		89.6	%		88.0	%
Total mall portfolio		89.8	%		88.7	%
Stabilized malls		90.1	%		89.1	%
Non-stabilized malls		76.9	%		72.2	%
Associated centers		91.9	%		88.7	%
Community centers		86.4	%		78.5	%

Occupancy levels at June 30, 2010 are a reflection of the strong relationships that we enjoy with our retail partners. Our occupancy improvements during 2010 are an indication of the demand that we are receiving from retailers and their desire to locate in dominant properties. Total portfolio occupancy increased 160 basis points from the prior-year period to 89.6%. Stabilized mall occupancy increased 100 basis points to 90.1% compared with the prior-year period. Certain re-leased box locations opening in the associated center and community center portfolios, as well as specialty stores continuing to fulfill their expansion plans, have contributed to this growth.

During the second quarter of 2010, we experienced limited tenant bankruptcy activity. We are optimistic that tenant bankruptcy and store closure rates will continue to decline over the year and remain below the average rates experienced since 2008.

Leasing

During the second quarter of 2010, we signed more than 1.3 million square feet of leases including 1.2 million square feet of leases in our operating portfolio and approximately 0.1 million square feet of development leases. The leases signed in our operating portfolio included 0.7 million square feet of new leases and 0.5 million square feet of renewals.

Average annual base rents per square foot were as follows for each property type:

	At June 30,
	2010		2009
Stabilized malls	$	28.95	$	29.27
Non-stabilized malls		25.41		26.71
Associated centers		11.89		11.90
Community centers		14.68		14.80
Office Buildings		19.21		19.09

Results from new and renewal leasing of comparable small shop space during the three and six months ended June 30, 2010 for spaces that were previously occupied are as follows:

	Square Feet		Prior Gross Rent PSF		New Initial Gross Rent PSF		% Change Initial			New Average Gross Rent PSF (2)		% Change Average
Quarter:
All Property Types (1)		580,855	$	39.25	$	33.83		-13.8	%	$	34.96		-10.9	%
Stabilized malls		505,012		42.12		36.27		-13.9	%		37.48		-11.0	%
New leases		203,391		41.87		36.04		-13.9	%		37.70		-10.0	%
Renewal leases		301,621		42.28		36.42		-13.9	%		37.33		-11.7	%

Year to Date:
All Property Types (1)		1,262,916		38.83		33.74		-13.1	%		34.70		-10.6	%
Stabilized malls		1,153,542		40.57		35.24		-13.1	%		36.24		-10.7	%
New leases		338,321		43.38		37.19		-14.3	%		39.06		-10.0	%
Renewal leases		815,221		39.41		34.42		-12.7	%		35.07		-11.0	%

(1)	Includes stabilized malls, associated centers, community centers and other.
(2)	Average Gross Rent does not incorporate allowable future increases for recoverable common area expenses.

During the second quarter of 2010, rental rates were signed at an average decrease of 10.9% from the prior gross rent per square foot on a same space basis. However, there were several leasing deals that have disproportionately affected the results this quarter, especially nine leases totaling approximately 70,000 square feet with two national apparel retailers. These nine deals negatively impacted our mall average leasing spread by almost 450 basis points. The lease terms on these spaces are two years or less as we intend to replace the current leases at these locations with leases at more favorable market rates.

We are continuing to sign shorter term leases in locations where unoccupied space is not currently renting at favorable rates. However, we are seeing the frequency of these situations slow and, excluding the nine leasing transactions described above, we are pleased by this trend and feel that the lease signings this quarter overall were stronger than in prior quarters. We believe this trend will continue throughout the year as the economy recovers. We will also be looking to improve the rental rates on shorter term deals that we have signed over the last twelve months as they expire.

LIQUIDITY AND CAPITAL RESOURCES

During the first quarter of 2010, we completed an equity offering of 6,300,000 depositary shares, each representing 1/10th of a share of our 7.375% Series D Cumulative Redeemable Preferred Stock, having a liquidation preference of $25.00 per share. The depositary shares were sold at $20.30 per share including accrued dividends of $0.37 per share. The net proceeds, after underwriting costs and related expenses, of approximately

$123.6 million were used to reduce outstanding borrowings under our credit facilities and for general corporate purposes. The net proceeds included accrued dividends of $2.3 million that were received as part of the offering price.

In June 2010, our 50.6% owned unconsolidated joint venture, Mall Shopping Center Company, sold Plaza del Sol in Del Rio, TX. The joint venture recognized a gain of $1.2 million from the sale, of which our share was $0.1 million, net of the excess of our basis over our underlying equity in the amount of $0.6 million.

During the six months ended June 30, 2010, we entered into financing transactions related to our pro rata share of consolidated and unconsolidated debt totaling $305.8 million secured by five operating properties, one of which is unconsolidated. After payment of the existing loans with principal balances totaling $263.9 million, plus accrued interest and closing costs, excess proceeds were used to pay down our secured credit facilities.

Also during the six months ended June 30, 2010, we repaid two CMBS loans, each secured by an operating property, with principal balances totaling $47.8 million with borrowings from the $560.0 million credit facility. The two operating properties were added to the collateral pool securing that facility.

Subsequent to June 30, 2010, we closed on a $65.0 million loan related to one of our operating properties. After payment of the existing loan with a principal balance of $40.6 million, plus accrued interest and closing costs, excess proceeds were used to pay down our secured credit facilities. We also repaid two CMBS loans secured by two of our operating properties with an aggregate principal balance of $55.4 million with borrowings from the $560.0 million credit facility and the properties were added to the collateral pool securing that facility. In addition, we closed on the extension and modification of our secured credit facility with total capacity of $105.0 million, extending the facility’s maturity date to June 2012 at its existing interest rate of LIBOR, subject to a floor of 1.50%, plus a margin of 300 basis points. We have term sheets or availability on our lines of credit to address all of our remaining 2010 debt maturities.

We are encouraged by the positive changes in the capital markets. The strength of the credit markets over the past few months has improved considerably, including increased availability of the emerging CMBS market. In addition, it has been encouraging to receive more reasonable appraisal valuations on our more recent financing transactions than what we experienced a year ago. As of June 30, 2010, we had more than $558.0 million available on our lines of credit. Our performance relative to the financial covenants in our credit lines remained sound with a debt to gross asset value ratio of 54% and an interest coverage ratio of 2.3 times for the trailing twelve months.

We derive a majority of our revenues from leases with retail tenants, which has historically been the primary source for funding short-term liquidity and capital needs such as operating expenses, debt service, tenant construction allowances, recurring capital expenditures, dividends and distributions. We believe that the combination of our cash flows generated from our operations, combined with our debt and equity sources and the availability under our lines of credit will, for the foreseeable future, provide adequate liquidity to meet our cash needs. In addition to these factors, we have options available to us to generate additional liquidity, including but not limited to, equity offerings, joint venture investments, issuances of noncontrolling interests in our Operating Partnership, decreasing the amount of expenditures we make related to tenant construction allowances and other capital expenditures and implementing further cost containment initiatives. We also generate revenues from sales of peripheral land at the properties and from sales of real estate assets when it is determined that we can realize an optimal value for the assets.

Cash Flows From Operations

There was $60.6 million of unrestricted cash and cash equivalents as of June 30, 2010, an increase of $12.5 million from December 31, 2009. Cash provided by operating activities during the six months ended June 30, 2010, decreased $17.2 million to $181.9 million from $199.1 million during the six months ended June 30, 2009. The decrease was primarily attributable to the decline in rental revenues, partially offset by lower operating expenses and the operations of the New Properties.

Debt

The following tables summarize debt based on our pro rata ownership share, including our pro rata share of unconsolidated affiliates and excluding noncontrolling investors’ share of consolidated properties, because we believe this provides investors and lenders a clearer understanding of our total debt obligations and liquidity (in thousands):

	Consolidated		Noncontrolling Interests			Unconsolidated Affiliates		Total		Weighted Average Interest Rate (1)
June 30, 2010:
Fixed-rate debt:
Non-recourse loans on operating properties	$	3,849,952	$	(24,850	)	$	422,013	$	4,247,115		5.92	%
Recourse term loans on operating properties (2)		159,443		-			-		159,443		5.27	%
Total fixed-rate debt		4,009,395		(24,850	)		422,013		4,406,558		5.90	%
Variable-rate debt:
Non-recourse term loans on operating properties		-		-			20,198		20,198		1.60	%
Recourse term loans on operating properties		377,027		(928	)		147,378		523,477		2.76	%
Secured lines of credit		631,951		-			-		631,951		3.51	%
Unsecured term facilities		437,494		-			-		437,494		1.71	%
Total variable-rate debt		1,446,472		(928	)		167,576		1,613,120		2.75	%
Total	$	5,455,867	$	(25,778	)	$	589,589	$	6,019,678		5.06	%

	Consolidated		Noncontrolling Interests			Unconsolidated Affiliates		Total		Weighted Average Interest Rate (1)
December 31, 2009:
Fixed-rate debt:
Non-recourse loans on operating properties	$	3,888,822	$	(23,737	)	$	404,104	$	4,269,189		5.99	%
Recourse loans on operating properties (2)		160,896		-			-		160,896		5.28	%
Total fixed-rate debt		4,049,718		(23,737	)		404,104		4,430,085		5.96	%
Variable-rate debt:
Recourse term loans on operating properties		242,763		(928	)		98,708		340,543		1.97	%
Construction loans		126,958		-			88,179		215,137		3.37	%
Land loans		-		-			3,276		3,276		2.23	%
Secured lines of credit		759,206		-			-		759,206		4.19	%
Unsecured term facilities		437,494		-			-		437,494		1.73	%
Total variable-rate debt		1,566,421		(928	)		190,163		1,755,656		3.04	%
Total	$	5,616,139	$	(24,665	)	$	594,267	$	6,185,741		5.13	%

(1)	Weighted average interest rate includes the effect of debt premiums (discounts), but excludes amortization of deferred financing costs.

(2)

We have entered into interest rate swaps on notional amounts totaling $127,500 as of June 30, 2010 and December 31, 2009 related to two of our variable-rate loans on operating properties to effectively fix the interest rates on these loans. Therefore, these amounts are currently reflected in fixed-rate debt.

During the remainder of 2010, a total of $704.2 million of our pro rata share of consolidated and unconsolidated debt is scheduled to mature. However, we have extensions of $484.6 million available at our option that we intend to exercise, leaving approximately $219.6 million of maturities in 2010 that must be retired or refinanced.

Subsequent to the end of the second quarter, we closed on a $65.0 million non-recourse CMBS loan secured by Valley View Mall in Roanoke, VA. The new loan replaced an existing loan with a principal balance of $40.6 million that was scheduled to mature in September 2010. We also repaid two CMBS loans secured by Parkdale Mall and Parkdale Crossing in Beaumont, TX with an aggregate principal balance of $55.4 million with borrowings from the $560.0 million credit facility and the properties were added to the collateral pool securing that facility.

The remaining loans due in 2010, totaling $123.6 million, relate to five property-specific loans, one of which is unconsolidated, that have maturity dates ranging from June 2010 to December 2010. We have term sheets or availability on our lines of credit to address all of our remaining 2010 debt maturities.

The weighted average remaining term of our total share of consolidated and unconsolidated debt was 3.6 years at June 30, 2010 and 3.7 years at December 31, 2009. The weighted average remaining term of our pro rata share of fixed-rate debt was 4.6 years and 4.5 years at June 30, 2010 and December 31, 2009, respectively.

As of June 30, 2010 and December 31, 2009, our pro rata share of consolidated and unconsolidated variable-rate debt represented 26.8% and 28.4%, respectively, of our total pro rata share of debt. As of June 30, 2010, our share of consolidated and unconsolidated variable-rate debt represented 18.3% of our total market capitalization (see Equity below) as compared to 21.1% as of December 31, 2009.

Secured Lines of Credit

We have three secured lines of credit that are used for mortgage retirement, working capital, construction and acquisition purposes, as well as issuances of letters of credit. Each of these lines is secured by mortgages on certain of our operating properties. Borrowings under the secured lines of credit bear interest at LIBOR, subject to a floor of 1.50%, plus a margin ranging from 0.75% to 4.25% and had a weighted average interest rate of 3.51% at June 30, 2010. The Company also pays fees based on the amount of unused availability under its two largest secured lines of credit at an annual rate of 0.35% of unused availability. The following summarizes certain information about the secured lines of credit as of June 30, 2010 (in thousands):

	Total Capacity		Total Outstanding		Maturity Date	Extended Maturity Date
$	560,000	$	385,633		August 2011	April 2014
	525,000		243,318	(1)	February 2012	February 2013
	105,000		3,000	(2)	June 2011	N/A
$	1,190,000	$	631,951

(1)	There was an additional $7,291 outstanding on this secured line of credit as of June 30, 2010 for letters of credit. Up to $50,000 of the capacity on this line can be used for letters of credit.

(2)	Subsequent to June 30, 2010, the maturity date on this secured line of credit was extended to June 2012.

Subsequent to June 30, 2010, we closed on the extension and modification of our secured credit facility with total capacity of $105.0 million. The facility’s maturity date was extended to June 2012 at its existing interest rate of LIBOR, subject to a floor of 1.50%, plus a margin of 300 basis points. At June 1, 2011, the total capacity on this line of credit could decrease to $82.5 million due to an exiting participant lender that has provided $22.5 million of this line’s total capacity. We are currently negotiating the terms with a potential replacement lender and believe that an agreement with a replacement lender or lenders will be executed prior to that date.

We also have secured and unsecured lines of credit with a total commitment of $21.0 million that are used only to issue letters of credit. There was $17.7 million outstanding under these lines at June 30, 2010.

Unsecured Term Facilities

We have an unsecured term facility with total availability of $228.0 million that bears interest at LIBOR plus a margin of 1.50% to 1.80% based on our leverage ratio, as defined in the agreement to the facility. At June 30, 2010, the outstanding borrowings of $228.0 million under the unsecured term facility had a weighted average interest rate of 1.95%. The facility matures in April 2011 and has two one-year extension options, which are at our election, for an outside maturity date of April 2013.

We have an unsecured term facility that was obtained for the exclusive purpose of acquiring certain properties from the Starmount Company or its affiliates. At June 30, 2010, the outstanding borrowings of $209.5 million under this facility had a weighted average interest rate of 1.45%. We completed our acquisition of the properties in February 2008 and, as a result, no further draws can be made against the facility. The unsecured term facility bears interest at LIBOR plus a margin of 0.95% to 1.40% based on our leverage ratio, as defined in the agreement to the facility. Net proceeds from a sale or our share of excess proceeds from any refinancings of any of the properties originally purchased with borrowings from this unsecured term facility must be used to pay

down any remaining outstanding balance. The facility matures in November 2010 and has two one-year extension options, which are at our election, for an outside maturity date of November 2012.

The agreements to the $560.0 million and $525.0 million secured credit facilities and the two unsecured term facilities described above, each with the same lender, contain default and cross-default provisions customary for transactions of this nature (with applicable customary grace periods) in the event (i) there is a default in the payment of any indebtedness owed by us to any institution which is a part of the lender groups for the credit facilities, or (ii) there is any other type of default with respect to any indebtedness owed by us to any institution which is a part of the lender groups for the credit facilities and such lender accelerates the payment of the indebtedness owed to it as a result of such default. The credit facility agreements provide that, upon the occurrence and continuation of an event of default, payment of all amounts outstanding under these credit facilities and those facilities with which these agreements reference cross-default provisions may be accelerated and the lenders’ commitments may be terminated. Additionally, any default in the payment of any recourse indebtedness greater than $50.0 million or any non-recourse indebtedness greater than $100.0 million, regardless of whether the lending institution is a part of the lender groups for the credit facilities, will constitute an event of default under the agreements to the credit facilities. The Company was not in default with regard to any of these provisions as of June 30, 2010.

Mortgages on Operating Properties

During the second quarter of 2010, we entered into an $83.0 million ten-year, non-recourse CMBS loan with a fixed interest rate of 6.00% secured by Burnsville Center in Minneapolis, MN. The loan replaced an existing $60.7 million loan that was scheduled to mature in August 2010. We also entered into an eight-year $115.0 million loan with a fixed interest rate of 6.98% secured by CoolSprings Galleria in Nashville, TN. Proceeds from the new loan, plus cash on hand, were used to retire an existing loan of $120.5 million that was scheduled to mature in September 2010. Additionally, we closed on a new ten-year $14.8 million loan with a fixed interest rate of 7.25% secured by The Terrace in Chattanooga, TN. Excess proceeds from these financing activities were used to pay down our secured credit facilities.

Also during the second quarter, we repaid a CMBS loan with a principal balance of $9.0 million secured by WestGate Crossing in Spartanburg, SC with borrowings from the $560.0 million credit facility and the property was added to the collateral pool securing that facility.

In addition, we entered into a $21.0 million ten-year, non-recourse CMBS loan with a fixed interest rate of 6.50% secured by Parkway Place, an unconsolidated operating property in Huntsville, AL. The $21.0 million loan represents our 50% share of the total $42.0 million loan obtained on the property. The loan replaced an existing $51.0 million loan that was scheduled to mature in June 2010, of which our 50% share was $25.5 million.

During the first quarter of 2010, we closed on a variable-rate $72.0 million non-recourse loan that bears interest at LIBOR plus a margin of 400 basis points secured by St. Clair Square in Fairview Heights, IL. The new loan replaced an existing loan with a principal balance of $57.2 million. We have an interest rate cap in place on this loan to limit the LIBOR rate to a maximum of 3.00%. The cap matures in January 2012. The excess proceeds received from the refinancing were used to pay down our secured credit facilities. Also during the first quarter, we repaid a CMBS loan secured by Park Plaza Mall in Little Rock, AK with a principal balance of $38.9 million with borrowings from the $560.0 million credit facility and the property was added to the collateral pool securing that facility.

Subsequent to June 30, 2010, we closed on a $65.0 million ten-year, non-recourse CMBS loan with a fixed interest rate of 6.50% secured by Valley View Mall in Roanoke, VA. The new loan replaced an existing loan with a principal balance of $40.6 million that was scheduled to mature in September 2010. We also repaid two CMBS loans secured by Parkdale Mall and Parkdale Crossing in Beaumont, TX, with an aggregate principal balance of $55.4 million with borrowings from the $560.0 million credit facility and the properties were added to the collateral pool securing that facility.

We own a parcel of land that we are ground leasing to a third party developer for the purpose of developing a shopping center. We have guaranteed 27% of the third party’s construction loan and bond line of credit (the “loans”) of which the maximum guaranteed amount is $31.6 million. The total amount outstanding at June 30, 2010 on the loans was $77.2 million of which we have guaranteed $20.8 million. The third party’s loans matured in June 2010. The third party is currently renegotiating the terms of the loans and we anticipate that the loans will be extended on renegotiated terms in the third quarter. The $20.8 million guaranteed amount is included in our pro rata share of consolidated and unconsolidated debt at June 30, 2010.

Interest Rate Hedging Instruments

($ in 000's)
Instrument Type	Location in Consolidated Balance Sheet	Notional Amount		Designated Benchmark Interest Rate	Strike Rate			Fair Value at 6/30/10			Fair Value at 12/31/09			Maturity Date
Cap	Intangible lease assets and other assets	$	72,000 (amortizing to $69,375)	3-month LIBOR		3.000	%	$	21		$	-		Jan-12
Cap	Intangible lease assets and other assets		80,000	USD-SIFMA Municipal Swap Index		4.000	%		-			2		Dec-10
Pay fixed/ Receive variable Swap	Accounts payable and accrued liabilities		40,000	1-month LIBOR		2.175	%		(310	)		(636	)	Nov-10
Pay fixed/ Receive variable Swap	Accounts payable and accrued liabilities		87,500	1-month LIBOR		3.600	%		(887	)		(2,271	)	Sep-10

Equity

In March 2010, we completed an underwritten public offering of 6,300,000 depositary shares, each representing 1/10th of a share of our 7.375% Series D Cumulative Redeemable Preferred Stock, having a liquidation preference of $25.00 per depositary share. The depositary shares were sold at $20.30 per share including accrued dividends of $0.37 per share. The net proceeds, after underwriting costs and related expenses, of approximately $123.6 million, including accrued dividends of $2.3 million, were used to reduce outstanding borrowings under our credit facilities and for general corporate purposes.

Including the shares issued in this offering, we now have 13,300,000 depositary shares outstanding, each representing 1/10th of a share of our 7.375% Series D Cumulative Redeemable Preferred Stock. The securities are redeemable at liquidation preference, plus accrued and unpaid dividends, at any time at our option. These securities have no stated maturity, sinking fund or mandatory redemption provisions and are not convertible into any of our other securities.

During the six months ended June 30, 2010, we paid cash dividends of $48.9 million to holders of our common stock and our preferred stock, as well as $41.6 million in distributions to the noncontrolling interest investors in our Operating Partnership and other consolidated subsidiaries.

On June 2, 2010, we announced a second quarter 2010 common stock dividend of $0.20 per share payable in cash. The dividend was paid on July 15, 2010. On February 22, 2010, we announced a first quarter

2010 common stock dividend of $0.20 per share payable in cash, that was paid on April 16, 2010. Future dividends payable will be determined by our Board of Directors based upon circumstances at the time of declaration.

As a publicly traded company, we have access to capital through both the public equity and debt markets. We currently have a shelf registration statement on file with the Securities and Exchange Commission authorizing us to publicly issue senior and/or subordinated debt securities, shares of preferred stock (or depositary shares representing fractional interests therein), shares of common stock, warrants or rights to purchase any of the foregoing securities, and units consisting of two or more of these classes or series of securities. There is no limit to the offering price or number of securities that we may issue under this shelf registration statement.

Our strategy is to maintain a conservative debt-to-total-market capitalization ratio in order to enhance our access to the broadest range of capital markets, both public and private. Based on our share of total consolidated and unconsolidated debt and the market value of equity, our debt-to-total-market capitalization (debt plus market value of equity) ratio was as follows at June 30, 2010 (in thousands, except stock prices):

	Shares Outstanding		Stock Price (1)		Value
Common stock and operating partnership units		190,024	$	12.44	$	2,363,899
7.75% Series C Cumulative Redeemable Preferred Stock		460		250.00		115,000
7.375% Series D Cumulative Redeemable Preferred Stock		1,330		250.00		332,500
Total market equity						2,811,399
Company’s share of total debt						6,019,678
Total market capitalization					$	8,831,077
Debt-to-total-market capitalization ratio						68.2	%

(1)	Stock price for common stock and Operating Partnership units equals the closing price of the common stock on June 30, 2010. The stock price for the preferred stock represents the liquidation preference of each respective series of preferred stock.

Capital Expenditures

Including our share of unconsolidated affiliates’ capital expenditures, we spent $13.5 million and $17.7 million during the three and six month periods ended June 30, 2010, respectively, for tenant allowances, which generally generate increased rents from tenants over the terms of their leases. Deferred maintenance expenditures were $3.6 million for the three months ended June 30, 2010 and included $1.3 million for roof replacements and $2.3 million for various other capital expenditures. Deferred maintenance expenditures were $6.8 million for the six months ended June 30, 2010 and included $1.8 million for roof replacements and $5.0 million for various other capital expenditures.

Deferred maintenance expenditures are generally billed to tenants as common area maintenance expense, and most are recovered over a 5 to 15-year period. Renovation expenditures are primarily for remodeling and upgrades of malls, of which approximately 30% is recovered from tenants over a 5 to 15-year period. We are recovering these costs through fixed amounts with annual increases or pro rata cost reimbursements based on the tenant’s occupied space.

As part of our strategy to strengthen our liquidity position, we have focused on reducing capital expenditures related to renovations and tenant allowances. Since the vast majority of our properties have been renovated within the last ten years, we decided to delay any renovation plans during 2009 and do not have any renovations currently scheduled for 2010.

We completed one development project, The Pavilion at Port Orange, during the first quarter of 2010 and have one project under development, The Forum at Grandview, as of June 30, 2010.

Annual capital expenditures budgets are prepared for each of our properties that are intended to provide for all necessary recurring and non-recurring capital expenditures. We believe that property operating cash flows, which include reimbursements from tenants for certain expenses, will provide the necessary funding for these expenditures.

Developments and Expansions

The following table summarizes our development projects as of June 30, 2010 (dollars in thousands):

Properties Opened During the Six Months Ended June 30, 2010

(Dollars in thousands)

Total

Project

CBL's Share of

Property

Location

Square

Feet

Total

Cost (b)

Cost to

Date (c)

Date Opened

Initial

Yield

Community/Open-Air Centers:

The Pavilion at Port Orange (Phase I and Phase 1A) (a)

Port Orange, FL

492,394

67,439

70,747

Fall-09/Spring-10

7.3

Properties Under Development at June 30, 2010

(Dollars in thousands)

Total

Project

CBL's Share of

Property

Location

Square

Feet

Total

Cost (b)

Cost to

Date (c)

Date Opened

Initial

Yield

Community/Open-Air Centers:

The Forum at Grandview Phase I (a)

Madison, MS

110,690

19,653

13,013

Fall-10

6.0

(a)	The Pavilion at Port Orange is a 50/50 joint venture and The Forum at Grandview is a 75/25 joint venture.
(b)	Total Cost is presented net of reimbursements to be received.
(c)	Cost to Date does not reflect reimbursements until they are received.

*	Pro forma initial yields for phased projects reflect full land cost in Phase I. Combined pro forma yields are higher than Phase I project yields.

We celebrated the grand opening of the first phase of The Pavilion at Port Orange, a 492,000-square-foot-open-air development in Port Orange, FL, on March 10, 2010. The project opened approximately 92% leased or committed with anchors including Hollywood Theaters, Belk, HomeGoods, Marshalls, Michaels, PETCO and ULTA.

In March 2010, we started construction on the first phase of a 75/25 joint venture community center project in Madison, MS. We converted our ground lease position into a 75% ownership interest in the development. This project will serve to meet the strong retail demand in the Madison area of greater Jackson, MS. The first phase of this project is 110,000 square feet comprised of anchors including Dick’s Sporting Goods, Best Buy and Stein Mart. The project is 100% leased and is expected to open in the fourth quarter of 2010.

Subsequent to June 30, 2010, we began construction on second phases of our centers in Burlington, NC and Pittsburgh, PA. In 2007, we opened Alamance Crossing and have now started construction on Alamance West, a 210,000-square-foot second phase. The project will include a wholesale club, a sporting goods store and an 80,000-square-foot fashion anchor. Alamance West is scheduled to open in fall 2011.

We are also starting construction on a 78,000-square-foot expansion of Settlers Ridge, which we opened last year. The project will include Michaels, Ross Dress for Less and an additional junior anchor. The project is scheduled to open in spring 2011.

We have entered into one option agreement for the development of a future shopping center. Except for the projects presented above, we do not have any other material capital commitments as of June 30, 2010.

Off-Balance Sheet Arrangements

Unconsolidated Affiliates

We have ownership interests in 20 unconsolidated affiliates that are described in Note 4 to the consolidated financial statements. The unconsolidated affiliates are accounted for using the equity method of accounting and are reflected in the consolidated balance sheets as “Investments in Unconsolidated Affiliates.” The following are circumstances when we may consider entering into a joint venture with a third party:

Third parties may approach us with opportunities in which they have obtained land and performed some pre-development activities, but they may not have sufficient access to the capital resources or the development and leasing expertise to bring the project to fruition. We enter into such arrangements when we determine such a project is viable and we can achieve a satisfactory return on our investment. We typically earn development fees from the joint venture and provide management and leasing services to the property for a fee once the property is placed in operation.

We determine that we may have the opportunity to capitalize on the value we have created in a property by selling an interest in the property to a third party. This provides us with an additional source of capital that can be used to develop or acquire additional real estate assets that we believe will provide greater potential for growth. When we retain an interest in an asset rather than selling a 100% interest, it is typically because this allows us to continue to manage the property, which provides us the ability to earn fees for management, leasing, development and financing services provided to the joint venture.

Guarantees

We may guarantee the debt of a joint venture primarily because it allows the joint venture to obtain funding at a lower cost than could be obtained otherwise. This results in a higher return for the joint venture on its investment, and a higher return on our investment in the joint venture. We may receive a fee from the joint venture for providing the guaranty. Additionally, when we issue a guaranty, the terms of the joint venture agreement typically provide that we may receive indemnification from the joint venture partner.

We own a parcel of land that we are ground leasing to a third party developer for the purpose of developing a shopping center. We have guaranteed 27% of the third party’s construction loan and bond line of credit (the “loans”) of which the maximum guaranteed amount is $31.6 million. The total amount outstanding at June 30, 2010 on the loans was $77.2 million of which we have guaranteed $20.8 million. The third party’s loans matured in June 2010. The third party is currently renegotiating the terms of the loans and we anticipate that the loans will be extended on renegotiated terms in the third quarter. We have recorded an obligation of $0.3 million in our condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of the guaranty.

We have guaranteed 100% of the construction and land loans of West Melbourne I, LLC (“West Melbourne”), an unconsolidated affiliate in which we own a 50% interest, of which the maximum guaranteed amount is $50.7 million. West Melbourne developed and, in April 2009, opened Hammock Landing, a community center in West Melbourne, FL. The total amount outstanding at June 30, 2010 on the loans was $45.6 million. The guaranty will expire upon repayment of the debt. The land loan, representing $3.3 million of the amount outstanding at June 30, 2010, matures in August 2010 and has a one-year extension option available. The construction loan, representing $42.3 million of the amount outstanding at June 30, 2010, matures in August 2011 and has two one-year extension options available. We have recorded an obligation of $0.7 million in the accompanying condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of this guaranty.

We have guaranteed 100% of the construction loan of Port Orange I, LLC (“Port Orange”), an unconsolidated affiliate in which we own a 50% interest, of which the maximum guaranteed amount is $97.2 million. Port Orange developed and, in March 2010, opened The Pavilion at Port Orange, a community center in Port Orange, FL. The total amount outstanding at June 30, 2010 on the loan was $69.4 million. The guaranty will expire upon repayment of debt. The loan matures in December 2011 and has extension options available. We have recorded an obligation of $1.1 million in the accompanying condensed consolidated balance sheets as of June 30, 2010 and December 31, 2009 to reflect the estimated fair value of this guaranty.

We have guaranteed the lease performance of York Town Center, LP (“YTC”), an unconsolidated affiliate in which we own a 50% interest, under the terms of an agreement with a third party that owns property as part of York Town Center. Under the terms of that agreement, YTC is obligated to cause performance of the third party’s obligations as landlord under its lease with its sole tenant, including, but not limited to, provisions such as co-tenancy and exclusivity requirements. Should YTC fail to cause performance, then the tenant under the third party landlord’s lease may pursue certain remedies ranging from rights to terminate its lease to receiving

reductions in rent. We have guaranteed YTC’s performance under this agreement up to a maximum of $22.0 million, which decreases by $0.8 million annually until the guaranteed amount is reduced to $10.0 million. The guaranty expires on December 31, 2020. The maximum guaranteed obligation was $18.8 million as of June 30, 2010. We entered into an agreement with our joint venture partner under which the joint venture partner has agreed to reimburse us 50% of any amounts we are obligated to fund under the guaranty. We did not record an obligation for this guaranty because we determined that the fair value of the guaranty is not material.

We have guaranteed 100% of a construction loan of JG Gulf Coast town Center, LLC, an unconsolidated affiliate in which we own a 50% interest, of which the maximum guaranteed amount is $11.6 million. Proceeds from the construction loan are designated for the development of Phase III of Gulf Coast Town Center, an open-air center in Fort Myers, FL. The total amount outstanding at June 30, 2010 on the loan was $11.6 million. The guaranty will expire upon repayment of the debt. The loan matures in April 2011 and has a one year extension option available. We did not record an obligation for this guaranty because we determined that the fair value of the guaranty is not material.

Our guarantees and the related accounting are more fully described in Note 9 to the condensed consolidated financial statements.

CRITICAL ACCOUNTING POLICIES

Our significant accounting policies are disclosed in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2009. The following discussion describes our most critical accounting policies, which are those that are both important to the presentation of our financial condition and results of operations and that require significant judgment or use of complex estimates.

Revenue Recognition

Minimum rental revenue from operating leases is recognized on a straight-line basis over the initial terms of the related leases. Certain tenants are required to pay percentage rent if their sales volumes exceed thresholds specified in their lease agreements. Percentage rent is recognized as revenue when the thresholds are achieved and the amounts become determinable.

We receive reimbursements from tenants for real estate taxes, insurance, common area maintenance, and other recoverable operating expenses as provided in the lease agreements. Tenant reimbursements are recognized as revenue in the period the related operating expenses are incurred. Tenant reimbursements related to certain capital expenditures are billed to tenants over periods of 5 to 15 years and are recognized as revenue when billed.

We receive management, leasing and development fees from third parties and unconsolidated affiliates. Management fees are charged as a percentage of revenues (as defined in the management agreement) and are recognized as revenue when earned. Development fees are recognized as revenue on a pro rata basis over the development period. Leasing fees are charged for newly executed leases and lease renewals and are recognized as revenue when earned. Development and leasing fees received from unconsolidated affiliates during the development period are recognized as revenue to the extent of the third-party partners’ ownership interest. Fees to the extent of our ownership interest are recorded as a reduction to our investment in the unconsolidated affiliate.

Gains on sales of real estate assets are recognized when it is determined that the sale has been consummated, the buyer’s initial and continuing investment is adequate, our receivable, if any, is not subject to future subordination, and the buyer has assumed the usual risks and rewards of ownership of the asset. When we have an ownership interest in the buyer, gain is recognized to the extent of the third party partner’s ownership interest and the portion of the gain attributable to our ownership interest is deferred.

Real Estate Assets

We capitalize predevelopment project costs paid to third parties. All previously capitalized predevelopment costs are expensed when it is no longer probable that the project will be completed. Once development of a project commences, all direct costs incurred to construct the project, including interest and real estate taxes, are capitalized. Additionally, certain general and administrative expenses are allocated to the projects and capitalized based on the amount of time applicable personnel work on the development project.

Ordinary repairs and maintenance are expensed as incurred. Major replacements and improvements are capitalized and depreciated over their estimated useful lives.

All acquired real estate assets are accounted for using the purchase method of accounting and accordingly, the results of operations are included in the consolidated statements of operations from the respective dates of acquisition. The purchase price is allocated to (i) tangible assets, consisting of land, buildings and improvements, as if vacant, and tenant improvements and (ii) identifiable intangible assets and liabilities generally consisting of above- and below-market leases and in-place leases. We use estimates of fair value based on estimated cash flows, using appropriate discount rates, and other valuation methods to allocate the purchase price to the acquired tangible and intangible assets. Liabilities assumed generally consist of mortgage debt on the real estate assets acquired. Assumed debt with a stated interest rate that is significantly different from market interest rates is recorded at its fair value based on estimated market interest rates at the date of acquisition.

Depreciation is computed on a straight-line basis over estimated lives of 40 years for buildings, 10 to 20 years for certain improvements and 7 to 10 years for equipment and fixtures. Tenant improvements are capitalized and depreciated on a straight-line basis over the term of the related lease. Lease-related intangibles from acquisitions of real estate assets are amortized over the remaining terms of the related leases. The amortization of above- and below-market leases is recorded as an adjustment to minimum rental revenue, while the amortization of all other lease-related intangibles is recorded as amortization expense. Any difference between the face value of the debt assumed and its fair value is amortized to interest expense over the remaining term of the debt using the effective interest method.

Carrying Value of Long-Lived Assets

We periodically evaluate long-lived assets to determine if there has been any impairment in their carrying values and record impairment losses if there are indicators of impairment and the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts. If it is determined that an impairment has occurred, the excess of the asset’s carrying value over its estimated fair value is charged to operations.

During the course of our normal quarterly impairment review process for the second quarter of 2010, it was determined that a write-down of the depreciated book value of Oak Hollow Mall in High Point, NC, to its estimated fair value was necessary, resulting in a non-cash loss on impairment of real estate assets of $25.4 million for the three and six months ended June 30, 2010. Subsequent to June 30, 2010, we entered into a contract to sell this property, subject to due diligence and customary closing conditions, for a sales price that is significantly less than the property’s carrying value. The impending sale was considered in the quarterly impairment review process, which resulted in a fair value of $11.6 million. If the sale of this property closes in accordance with the terms of the current contract, the lender of the non-recourse loan secured by this property with a principal balance of $39.6 million as of June 30, 2010 has agreed to modify the outstanding principal balance of the loan to equal the net sales price of the property. Should this occur, we anticipate recording a gain on extinguishment of debt of approximately $28.0 million upon completion of the disposition.

No impairments of the carrying values of long-lived assets were incurred during the three and six month periods ended June 30, 2009.

Allowance for Doubtful Accounts

We periodically perform a detailed review of amounts due from tenants to determine if accounts receivable balances are impaired based on factors affecting the collectability of those balances. Our estimate of the allowance for doubtful accounts requires significant judgment about the timing, frequency and severity of collection losses, which affects the allowance and net income. We recorded a provision for doubtful accounts of $1.7 million and $3.8 million for the six months ended June 30, 2010 and 2009, respectively.

Investments in Unconsolidated Affiliates

Initial investments in joint ventures that are in economic substance a capital contribution to the joint venture are recorded in an amount equal to our historical carryover basis in the real estate contributed. Initial investments in joint ventures that are in economic substance the sale of a portion of our interest in the real estate are accounted for as a contribution of real estate recorded in an amount equal to our historical carryover basis in the ownership percentage retained and as a sale of real estate with profit recognized to the extent of the other joint

venturers’ interests in the joint venture. Profit recognition assumes that we have no commitment to reinvest with respect to the percentage of the real estate sold and the accounting requirements of the full accrual method are met.

We account for our investment in joint ventures where we own a non-controlling interest or where we are not the primary beneficiary of a variable interest entity using the equity method of accounting. Under the equity method, our cost of investment is adjusted for our share of equity in the earnings of the unconsolidated affiliate and reduced by distributions received. Generally, distributions of cash flows from operations and capital events are first made to partners to pay cumulative unpaid preferences on unreturned capital balances and then to the partners in accordance with the terms of the joint venture agreements.

Any differences between the cost of our investment in an unconsolidated affiliate and our underlying equity as reflected in the unconsolidated affiliate’s financial statements generally result from costs of our investment that are not reflected on the unconsolidated affiliate’s financial statements, capitalized interest on our investment and our share of development and leasing fees that are paid by the unconsolidated affiliate to us for development and leasing services provided to the unconsolidated affiliate during any development periods. The net difference between our investment in unconsolidated affiliates and the underlying equity of unconsolidated affiliates is generally amortized over a period of 40 years.

On a periodic basis, we assess whether there are any indicators that the fair value of our investments in unconsolidated affiliates may be impaired. An investment is impaired only if our estimate of the fair value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the fair value of the investment. Our estimates of fair value for each investment are based on a number of assumptions such as future leasing expectations, operating forecasts, discount rates and capitalization rates, among others. These assumptions are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates, and operating costs. As these factors are difficult to predict and are subject to future events that may alter our assumptions, the fair values estimated in the impairment analyses may not be realized.

During the six months ended June 30, 2009, we recorded a non-cash impairment charge of $7.7 million related to our cost-method investment in Jinsheng due to a decline in expected future cash flows. The projected decrease was a result of declining occupancy and sales due to the downturn of the real estate market in China in early 2009. No impairments of investments in unconsolidated affiliates were incurred during the six months ended June 30, 2010.

Recent Accounting Pronouncements

Effective January 1, 2010, we adopted ASU No. 2010-06, Fair Value Measurements and Disclosures: Improving Disclosures about Fair Value Measurements (“ASU 2010-06”). ASU 2010-06 provides that significant transfers in or out of measurements classified as Levels 1 or 2 should be disclosed separately along with reasons for the transfers. Information regarding purchases, sales, issuances and settlements related to measurements classified as Level 3 are also to be presented separately. Existing disclosures have been updated to include fair value measurement disclosures for each class of assets and liabilities and information regarding the valuation techniques and inputs used to measure fair value in measurements classified as either Levels 2 or 3. The guidance is effective for fiscal years beginning after December 15, 2009. The adoption of this guidance did not have an impact on our condensed consolidated financial statements.

Effective January 1, 2010, we adopted ASU No. 2009-16, Transfers and Servicing: Accounting for Transfers of Financial Assets (“ASU 2009-16”). The guidance eliminates the concept of a “qualifying special-purpose entity,” changes the requirements for derecognizing financial assets and requires additional related disclosures. The new accounting guidance is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance did not have an impact on our condensed consolidated financial statements.

Effective January 1, 2010, we adopted ASU No. 2009-17, Consolidations: Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities (“ASU 2009-17”). ASU 2009-17 modifies how a company determines when an entity that is insufficiently capitalized or is not controlled through voting, or similar, rights should be consolidated. The guidance clarifies that the determination of whether a company is required to consolidate an entity is based on, among other things, an entity’s purpose and design and a company’s ability to direct the activities of the entity that most significantly impact the entity’s economic performance. This guidance requires an ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity. It also requires additional disclosure about a company’s involvement in variable interest entities and any significant changes in risk exposure due to that involvement. The guidance is effective for fiscal years beginning after November 15, 2009. The adoption of this guidance did not have an impact on our condensed consolidated financial statements.

On February 24, 2010, the FASB issued ASU No. 2010-09, Subsequent Events: Amendments to Certain Recognition and Disclosure Requirements (“ASU 2010-09”). ASU 2010-09 amends the disclosure provision related to subsequent events by removing the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated. The new accounting guidance was effective immediately and we adopted ASU No. 2010-09 upon the date of issuance.

Impact of Inflation

Deflation can result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand. Restricted lending practices could impact our ability to obtain financings or refinancings for our properties and our tenants’ ability to obtain credit. Decreases in consumer demand can have a direct impact on our tenants and the rents we receive.

During late 2009, the markets that were impacted by the economic crisis that arose primarily in the fourth quarter of 2008 seemed to stabilize and related bankruptcy activity started to decline. The credit and investment markets have been slowly, but steadily, showing signs of improvement. Retailers seem to have revised their business plans to better adapt to the current economic environment and are starting to report improving margins and profitability. The primary focus has begun to shift to planning for a market recovery.

During inflationary periods, substantially all of our tenant leases contain provisions designed to mitigate the impact of inflation. These provisions include clauses enabling us to receive percentage rent based on tenants' gross sales, which generally increase as prices rise, and/or escalation clauses, which generally increase rental rates during the terms of the leases. In addition, many of the leases are for terms of less than 10 years, which may provide us the opportunity to replace existing leases with new leases at higher base and/or percentage rent if rents of the existing leases are below the then existing market rate. Most of the leases require the tenants to pay a fixed amount subject to annual increases for, or their share of, operating expenses, including common area maintenance, real estate taxes, insurance and certain capital expenditures, which reduces our exposure to increases in costs and operating expenses resulting from inflation.

Funds From Operations

Funds From Operations (“FFO”) is a widely used measure of the operating performance of real estate companies that supplements net income (loss) determined in accordance with GAAP. The National Association of Real Estate Investment Trusts (“NAREIT”) defines FFO as net income (loss) (computed in accordance with GAAP) excluding gains or losses on sales of operating properties, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests. Adjustments for unconsolidated partnerships and joint ventures and noncontrolling interests are calculated on the same basis. We define FFO allocable to common shareholders as defined above by NAREIT less dividends on preferred stock. Our method of calculating FFO allocable to common shareholders may be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.

We believe that FFO provides an additional indicator of the operating performance of our Properties without giving effect to real estate depreciation and amortization, which assumes the value of real estate assets declines predictably over time. Since values of well-maintained real estate assets have historically risen with market conditions, we believe that FFO enhances investors’ understanding of our operating performance. The use of FFO as an indicator of financial performance is influenced not only by the operations of our properties and interest rates, but also by our capital structure.

We present both FFO of our Operating Partnership and FFO allocable to common shareholders, as we believe that both are useful performance measures. We believe FFO of our Operating Partnership is a useful performance measure since we conduct substantially all of our business through our Operating Partnership and, therefore, it reflects the performance of the properties in absolute terms regardless of the ratio of ownership interests of our common shareholders and the noncontrolling interest in our Operating Partnership. We believe FFO allocable to common shareholders is a useful performance measure because it is the performance measure that is most directly comparable to net income available to common shareholders.

In our reconciliation of net income (loss) available to common shareholders to FFO allocable to common shareholders that is presented below, we make an adjustment to add back noncontrolling interest in income of our Operating Partnership in order to arrive at FFO of our Operating Partnership. We then apply a percentage to FFO of our Operating Partnership to arrive at FFO allocable to common shareholders. The percentage is computed by taking the weighted average number of common shares outstanding for the period and dividing it by the sum of the weighted average number of common shares and the weighted average number of Operating Partnership units outstanding during the period (excluding those operating partnership units held by subsidiaries of the Company which correspond to the outstanding common shares).

During the quarter ended June 30, 2010, we recorded a loss on impairment of real estate assets related to one operating property. Considering the significance and nature of the impairment, we believe that it is important to identify the impact of the charge on our FFO measures for a reader to have a complete understanding of our results of operations. Therefore, we have also presented our FFO measure excluding the impairment charge.

FFO does not represent cash flows from operations as defined by GAAP, is not necessarily indicative of cash available to fund all cash flow needs and should not be considered as an alternative to net income for purposes of evaluating our operating performance or to cash flow as a measure of liquidity.

FFO of the Operating Partnership decreased 28.7% to $68.6 million for the three months ended June 30, 2010 from $96.3 million for the same period in 2009 primarily as result of a $25.4 million non-cash impairment loss on real estate recognized in the second quarter of 2010. Excluding the impairment charge, FFO of the Operating Partnership decreased 2.3% for the three months ended June 30, 2010, compared to the prior year quarter. FFO of the Operating Partnership decreased 12.2% for the six months ended June 30, 2010 to $162.2 million compared to $184.7 million for the same period in 2009. Excluding the impairment charge, FFO of the Operating Partnership increased 1.6% for the six months ended June 30, 2010, compared to the prior-year period.

The reconciliation of FFO to net income (loss) available to common shareholders is as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009

Net income (loss) available to common shareholders	$	(7,242	)	$	8,137		$	3,686		$	9,849
Noncontrolling interest in earnings of Operating Partnership		(2,723	)		5,109			1,387			6,415
Depreciation and amortization expense of:
Consolidated properties		70,652			75,793			142,664			154,104
Unconsolidated affiliates		8,486			7,555			15,371			15,064
Non-real estate assets		(219	)		(243	)		(438	)		(490	)
Noncontrolling investors' share of depreciation and amortization		(311	)		(64	)		(456	)		(265	)
Loss on discontinued operations		-			12			-			72
Funds from operations of the operating partnership		68,643			96,299			162,214			184,749
Loss on impairment of real estate		25,435			-			25,435			-
Funds from operations of the operating partnership, excluding loss on impairment of real estate	$	94,078		$	96,299		$	187,649		$	184,749

The reconciliations of FFO of the Operating Partnership to FFO allocable to the Company shareholders, including and excluding the loss on impairment of real estate, are as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2009			2010			2009

Funds from operations of the operating partnership	$	68,643		$	96,299		$	162,214		$	184,749
Percentage allocable to Company shareholders (1)		72.66	%		61.37	%		72.65	%		59.23	%

Funds from operations allocable to Company shareholders	$	49,876		$	59,099		$	117,848		$	109,427

Funds from operations of the operating partnership, excluding loss on impairment of real estate	$	94,078		$	96,299		$	187,649		$	184,749
Percentage allocable to Company shareholders (1)		72.66	%		61.37	%		72.65	%		59.23	%

Funds from operations allocable to Company shareholders, excluding loss on impairment of real estate	$	68,357		$	59,099		$	136,327		$	109,427

(1)	Represents the weighted average number of common shares outstanding for the period divided by the sum of the weighted average number of common shares and the weighted average number of operating partnership units outstanding during the period.

ITEM 3: Quantitative and Qualitative Disclosures About Market Risk

We are exposed to various market risk exposures, including interest rate risk and foreign exchange rate risk. The following discussion regarding our risk management activities includes forward-looking statements that involve risk and uncertainties. Estimates of future performance and economic conditions are reflected assuming certain changes in interest and foreign exchange rates. Caution should be used in evaluating our overall market risk from the information presented below, as actual results may differ. We employ various derivative programs to manage certain portions of our market risk associated with interest rates. See Note 5 of the notes to consolidated financial statements for further discussions of the qualitative aspects of market risk, including derivative financial instrument activity.

Based on our proportionate share of consolidated and unconsolidated variable-rate debt at June 30, 2010, a 0.5% increase or decrease in interest rates on variable rate debt would increase or decrease annual cash flows by approximately $8.1 million and, after the effect of capitalized interest, annual earnings by approximately $8.1 million.

Based on our proportionate share of total consolidated and unconsolidated debt at June 30, 2010, a 0.5% increase in interest rates would decrease the fair value of debt by approximately $82.7 million, while a 0.5% decrease in interest rates would increase the fair value of debt by approximately $84.8 million.

ITEM 4: Controls and Procedures

Disclosure Controls and Procedures

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of its effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As of the end of the period covered by this quarterly report, an evaluation was performed under the supervision of our Chief Executive Officer and Chief Financial Officer and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures are effective to ensure that information that we are required to disclose in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1: Legal Proceedings

None

ITEM 1A. Risk Factors

The following information updates the information disclosed in “Item 1A – Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2009, by providing information that is current as of June 30, 2010:

RISKS RELATED TO REAL ESTATE INVESTMENTS

Real property investments are subject to various risks, many of which are beyond our control, that could cause declines in the operating revenues and/or the underlying value of one or more of our Properties.

A number of factors may decrease the income generated by a retail shopping center property, including:

National, regional and local economic climates, which may be negatively impacted by loss of jobs, production slowdowns, adverse weather conditions, natural disasters, acts of violence, war or terrorism, declines in residential real estate activity and other factors which tend to reduce consumer spending on retail goods.

·	Adverse changes in levels of consumer spending, consumer confidence and seasonal spending (especially during the holiday season when many retailers generate a disproportionate amount of their annual profits).

·	Local real estate conditions, such as an oversupply of, or reduction in demand for, retail space or retail goods, and the availability and creditworthiness of current and prospective tenants.

·	Increased operating costs, such as increases in repairs and maintenance, real property taxes, utility rates and insurance premiums.

Delays or cost increases associated with the opening of new or renovated properties, due to higher than estimated construction costs, cost overruns, delays in receiving zoning, occupancy or other governmental approvals, lack of availability of materials and labor, weather conditions, and similar factors which may be outside our ability to control.

·	Perceptions by retailers or shoppers of the safety, convenience and attractiveness of the shopping center.

·	The willingness and ability of the shopping center’s owner to provide capable management and maintenance services.

·	The convenience and quality of competing retail properties and other retailing options, such as the Internet.

In addition, other factors may adversely affect the value of our Properties without affecting their current revenues, including:

·	Adverse changes in governmental regulations, such as local zoning and land use laws, environmental regulations or local tax structures that could inhibit our ability to proceed with development, expansion, or renovation activities that otherwise would be beneficial to our Properties.

·	Potential environmental or other legal liabilities that reduce the amount of funds available to us for investment in our Properties.

Any inability to obtain sufficient financing (including construction financing and permanent debt), or the inability to obtain such financing on commercially favorable terms, to fund repayment of maturing loans, new developments, acquisitions, and property expansions and renovations which otherwise would benefit our Properties.

·	An environment of rising interest rates, which could negatively impact both the value of commercial real estate such as retail shopping centers and the overall retail climate.

Illiquidity of real estate investments could significantly affect our ability to respond to adverse changes in the performance of our Properties and harm our financial condition.

Substantially all of our total consolidated assets consist of investments in real properties. Because real estate investments are relatively illiquid, our ability to quickly sell one or more properties in our portfolio in response to changing economic, financial and investment conditions is limited. The real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand for space, that are beyond our control. We cannot predict whether we will be able to sell any property for the price or on the terms we set, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We also cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. In addition, current economic and capital market conditions might make it more difficult for us to sell properties or might adversely affect the price we receive for properties that we do sell, as prospective buyers might experience increased costs of debt financing or other difficulties in obtaining debt financing.

Moreover, there are some limitations under federal income tax laws applicable to REITs that limit our ability to sell assets. In addition, because our Properties are generally mortgaged to secure our debts, we may not be able to obtain a release of a lien on a mortgaged property without the payment of the associated debt and/or a substantial prepayment penalty, which restricts our ability to dispose of a property, even though the sale might otherwise be desirable. Furthermore, the number of prospective buyers interested in purchasing shopping centers is limited. Therefore, if we want to sell one or more of our Properties, we may not be able to dispose of it in the desired time period and may receive less consideration than we originally invested in the Property.

Before a property can be sold, we may be required to make expenditures to correct defects or to make improvements. We cannot assure you that we will have funds available to correct those defects or to make those improvements, and if we cannot do so, we might not be able to sell the property, or might be required to sell the property on unfavorable terms. In acquiring a property, we might agree to provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as limitations on the amount of debt that can be placed or repaid on that property. These factors and any others that would impede our ability to respond to adverse changes in the performance of our Properties could adversely affect our financial condition and results of operations.

We may elect not to proceed with certain development or expansion projects once they have been undertaken, resulting in charges that could have a material adverse effect on our results of operations for the period in which the charge is taken.

We intend to pursue development and expansion activities as opportunities arise. In connection with any development or expansion, we will incur various risks, including the risk that development or expansion opportunities explored by us may be abandoned for various reasons including, but not limited to, credit disruptions that require the Company to conserve its cash until the capital markets stabilize or alternative credit or funding arrangements can be made. Developments or expansions also include the risk that construction costs of a project may exceed original estimates, possibly making the project unprofitable. Other risks include the risk that we may not be able to refinance construction loans which are generally with full recourse to us, the risk that occupancy rates and rents at a completed project will not meet projections and will be insufficient to make the project profitable, and the risk that we will not be able to obtain anchor, mortgage lender and property partner approvals for certain expansion activities.

When we elect not to proceed with a development opportunity, the development costs ordinarily are charged against income for the then-current period. Any such charge could have a material adverse effect on our results of operations for the period in which the charge is taken.

Certain of our Properties are subject to ownership interests held by third parties, whose interests may conflict with ours and thereby constrain us from taking actions concerning these properties which otherwise would be in the best interests of the Company and our stockholders.

We own partial interests in 22 malls, twelve associated centers, six community centers and eight office buildings. We manage all but three of these properties. Governor’s Square, Governor’s Plaza and Kentucky Oaks are all owned by joint ventures and are managed by a property manager that is affiliated with the third party managing general partner. The property manager performs the property management and leasing services for these three Properties and receives a fee for its services. The managing partner of the Properties controls the cash flow distributions, although our approval is required for certain major decisions.

Where we serve as managing general partner (or equivalent) of the entities that own our Properties, we may have certain fiduciary responsibilities to the other owners of those entities. In certain cases, the approval or consent of the other owners is required before we may sell, finance, expand or make other significant changes in the operations of such Properties. To the extent such approvals or consents are required, we may experience difficulty in, or may be prevented from, implementing our plans with respect to expansion, development, financing or other similar transactions with respect to such Properties.

With respect to those Properties for which we do not serve as managing general partner (or equivalent), we do not have day-to-day operational control or control over certain major decisions, including leasing and the timing and amount of distributions, which could result in decisions by the managing entity that do not fully reflect our interests. This includes decisions relating to the requirements that we must satisfy in order to maintain our status as a REIT for tax purposes. However, decisions relating to sales, expansion and disposition of all or substantially all of the assets and financings are subject to approval by the Operating Partnership.

Bankruptcy of joint venture partners could impose delays and costs on us with respect to the jointly owned retail properties.

In addition to the possible effects on our joint ventures of a bankruptcy filing by us, the bankruptcy of one of the other investors in any of our jointly owned shopping centers could materially and adversely affect the relevant property or properties. Under the bankruptcy laws, we would be precluded from taking some actions affecting the estate of the other investor without prior approval of the bankruptcy court, which would, in most cases, entail prior notice to other parties and a hearing in the bankruptcy court. At a minimum, the requirement to obtain court approval may delay the actions we would or might want to take. If the relevant joint venture through which we have invested in a property has incurred recourse obligations, the discharge in bankruptcy of one of the other investors might result in our ultimate liability for a greater portion of those obligations than we would otherwise bear.

We may incur significant costs related to compliance with environmental laws, which could have a material adverse effect on our results of operations, cash flows and the funds available to us to pay dividends.

Under various federal, state and local laws, ordinances and regulations, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of petroleum, certain hazardous or toxic substances on, under or in such real estate. Such laws typically impose such liability without regard to whether the owner or operator knew of, or was responsible for, the presence of such substances. The costs of remediation or removal of such substances may be substantial. The presence of such substances, or the failure to promptly remove or remediate such substances, may adversely affect the owner’s or operator’s ability to lease or sell such real estate or to borrow using such real estate as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic substances may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, regardless of whether such facility is owned or operated by such person. Certain laws also impose requirements on conditions and activities that may affect the environment or the impact of the environment on human health. Failure to comply with such requirements could result in the imposition of monetary penalties (in addition to the costs to achieve compliance) and potential liabilities to third parties. Among other things, certain laws require abatement or removal of friable and certain non-friable asbestos-containing materials in the event of demolition or certain renovations or remodeling. Certain laws regarding asbestos-containing materials require building owners and lessees, among other things, to notify and train certain employees working in areas known or presumed to contain asbestos-containing materials. Certain laws also impose liability for release of asbestos-containing materials into the air and third parties may seek recovery from owners or operators of real properties for personal injury or property damage associated with asbestos-containing materials. In connection with the ownership and operation of properties, we may be potentially liable for all or a portion of such costs or claims.

All of our Properties (but not properties for which we hold an option to purchase but do not yet own) have been subject to Phase I environmental assessments or updates of existing Phase I environmental assessments. Such assessments generally consisted of a visual inspection of the Properties, review of federal and state environmental databases and certain information regarding historic uses of the property and adjacent areas and the preparation and issuance of written reports. Some of the Properties contain, or contained, underground storage tanks used for storing petroleum products or wastes typically associated with automobile service or other operations conducted at the Properties. Certain Properties contain, or contained, dry-cleaning establishments utilizing solvents. Where believed to be warranted, samplings of building materials or subsurface investigations were undertaken. At certain Properties, where warranted by the conditions, we have developed and implemented an operations and maintenance program that establishes operating procedures with respect to

asbestos-containing materials. The cost associated with the development and implementation of such programs was not material. We have also obtained environmental insurance coverage at certain of our Properties.

We believe that our Properties are in compliance in all material respects with all federal, state and local ordinances and regulations regarding the handling, discharge and emission of hazardous or toxic substances. As of June 30, 2010, we have recorded in our financial statements a liability of $2.8 million related to potential future asbestos abatement activities at our Properties which are not expected to have a material impact on our financial condition or results of operations. We have not been notified by any governmental authority, and are not otherwise aware, of any material noncompliance, liability or claim relating to hazardous or toxic substances in connection with any of our present or former Properties. Therefore, we have not recorded any liability related to hazardous or toxic substances. Nevertheless, it is possible that the environmental assessments available to us do not reveal all potential environmental liabilities. It is also possible that subsequent investigations will identify material contamination, that adverse environmental conditions have arisen subsequent to the performance of the environmental assessments, or that there are material environmental liabilities of which management is unaware. Moreover, no assurances can be given that (i) future laws, ordinances or regulations will not impose any material environmental liability or (ii) the current environmental condition of the Properties has not been or will not be affected by tenants and occupants of the Properties, by the condition of properties in the vicinity of the Properties or by third parties unrelated to us, the Operating Partnership or the relevant Property’s partnership.

Possible terrorist activity or other acts of violence could adversely affect our financial condition and results of operations.

Future terrorist attacks in the United States, and other acts of violence, including terrorism or war, might result in declining consumer confidence and spending, which could harm the demand for goods and services offered by our tenants and the values of our Properties, and might adversely affect an investment in our securities. A decrease in retail demand could make it difficult for us to renew or re-lease our Properties at lease rates equal to or above historical rates and, to the extent our tenants are affected, could adversely affect their ability to continue to meet obligations under their existing leases. Terrorist activities also could directly affect the value of our Properties through damage, destruction or loss. Furthermore, terrorist acts might result in increased volatility in national and international financial markets, which could limit our access to capital or increase our cost of obtaining capital.

RISKS RELATED TO OUR BUSINESS AND THE MARKET FOR OUR STOCK

Declines in economic conditions, including increased volatility in the capital and credit markets, could adversely affect our business, results of operations and financial condition.

An economic recession can result in extreme volatility and disruption of our capital and credit markets. The resulting economic environment may be affected by dramatic declines in the stock and housing markets, increases in foreclosures, unemployment and costs of living, as well as limited access to credit. This economic situation can, and most often will, impact consumer spending levels, which can result in decreased revenues for our tenants and related decreases in the values of our Properties. A sustained economic downward trend could impact our tenants’ ability to meet their lease obligations due to poor operating results, lack of liquidity, bankruptcy or other reasons. Our ability to lease space and negotiate rents at advantageous rates could also be affected in this type of economic environment. Additionally, access to capital and credit markets could be

disrupted over an extended period, which may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. Any of these events could harm our business, results of operations and financial condition.

Both our June 2009 common stock offering and the payment of a portion of our common stock dividend for the first quarter of 2009 in shares of common stock were dilutive, and there may be future dilution of our common stock.

In June 2009, we completed a public offering of 66,630,000 shares of our newly-issued common stock. In April 2009, we issued 4,754,355 shares of common stock in connection with the payment of a portion of our first quarter 2009 common stock dividend. These transactions have had a dilutive effect on our earnings per share and funds from operations per share for the three and six months ended June 30, 2010. We are not restricted by our organizational documents, contractual arrangements or otherwise from issuing additional common stock, including any securities that are convertible into or exchangeable or exercisable for, or that represent the right to receive, common stock or any substantially similar securities in the future. Future sales or issuances of substantial amounts of our common stock may be at prices below the then-current market price of our common stock and may adversely impact the market price of our common stock. Additionally, the market price of our common stock could decline as a result of sales of a large number of shares of our common stock in the market after our recent common stock offering or the perception that such sales could occur.

The market price of our common stock or other securities may fluctuate significantly.

The market price of our common stock or other securities may fluctuate significantly in response to many factors, including:

·	actual or anticipated variations in our operating results, funds from operations, cash flows or liquidity;

·	changes in our earnings estimates or those of analysts;

·	changes in our dividend policy;

·	impairment charges affecting the carrying value of one or more of our Properties or other assets;

·	publication of research reports about us, the retail industry or the real estate industry generally;

·	increases in market interest rates that lead purchasers of our securities to seek higher dividend or interest rate yields;

·	changes in market valuations of similar companies;

·	adverse market reaction to the amount of our outstanding debt at any time, the amount of our maturing debt in the near and medium term and our ability to refinance such debt and the terms thereof or our plans to incur additional debt in the future;

·	additions or departures of key management personnel;

·	actions by institutional security holders;

·	speculation in the press or investment community;

·	the occurrence of any of the other risk factors included in, or incorporated by reference in, this report; and

·	general market and economic conditions.

Many of the factors listed above are beyond our control. Those factors may cause the market price of our common stock or other securities to decline significantly, regardless of our financial performance and condition and prospects. It is impossible to provide any assurance that the market price of our common stock or other securities will not fall in the future, and it may be difficult for holders to sell such securities at prices they find attractive, or at all.

The issuance of additional preferred stock may adversely affect the earnings per share available to common shareholders and amounts available to common shareholders for payments of dividends.

In March 2010, we completed an equity offering of 6,300,000 depositary shares, each representing 1/10th of a share of our 7.375% Series D Cumulative Redeemable Preferred Stock, having a liquidation preference of $25.00 per share. The securities are redeemable at liquidation preference, plus accrued and unpaid dividends, at any time at the option of the Company. The shares issued in the March 2010 offering will accrue dividends totaling approximately $11.6 million annually, decreasing earnings per share available to our common shareholders and the amounts available to our common shareholders for dividend payments.

We are not restricted by our organizational documents, contractual arrangements or otherwise from issuing additional preferred shares, including any securities that are convertible into or exchangeable or exercisable for, or that represent the right to receive, preferred stock or any substantially similar securities in the future.

Competition could adversely affect the revenues generated by our Properties, resulting in a reduction in funds available for distribution to our stockholders.

There are numerous shopping facilities that compete with our Properties in attracting retailers to lease space. In addition, retailers at our Properties face competition for customers from:

discount shopping centers;

outlet malls;

wholesale clubs;

direct mail;

television shopping networks; and

shopping via the internet.

Each of these competitive factors could adversely affect the amount of rents and tenant reimbursements that we are able to collect from our tenants, thereby reducing our revenues and the funds available for distribution to our stockholders.

We compete with many commercial developers, real estate companies and major retailers for prime development locations and for tenants. New regional malls or other retail shopping centers with more convenient locations or better rents may attract tenants or cause them to seek more favorable lease terms at, or prior to, renewal.

Increased operating expenses and decreased occupancy rates may not allow us to recover the majority of our common area maintenance (CAM) and other operating expenses from our tenants, which could adversely affect our financial position, results of operations and funds available for future distributions.

Energy costs, repairs, maintenance and capital improvements to common areas of our Properties, janitorial services, administrative, property and liability insurance costs and security costs are typically allocable to our Properties’ tenants. Our lease agreements typically provide that the tenant is liable for a portion of the CAM and other operating expenses. While historically our lease agreements provided for variable CAM provisions, the majority of our current leases require an equal periodic tenant reimbursement amount for our cost recoveries which serves to fix our tenants’ CAM contributions to us. In these cases, a tenant will pay a single specified rent amount, or a set expense reimbursement amount, subject to annual increases, regardless of the actual amount of operating expenses. The tenant’s payment remains the same regardless of whether operating expenses increase or decrease, causing us to be responsible for any excess amounts or to benefit from any declines. As a result, the CAM and tenant reimbursements that we receive may or may not allow us to recover a substantial portion of these operating costs.

Additionally, in the event that our Properties are not fully occupied, we would be required to pay the portion of any operating, redevelopment or renovation expenses allocable to the vacant space(s) that would otherwise typically be paid by the residing tenant(s).

The loss of one or more significant tenants, due to bankruptcies or as a result of ongoing consolidations in the retail industry, could adversely affect both the operating revenues and value of our Properties.

Regional malls are typically anchored by well-known department stores and other significant tenants who generate shopping traffic at the mall. A decision by an anchor tenant or other significant tenant to cease operations at one or more Properties could have a material adverse effect on those Properties and, by extension, on our financial condition and results of operations. The closing of an anchor or other significant tenant may allow other anchors and/or tenants at an affected Property to terminate their leases, to seek rent relief and/or cease operating their stores or otherwise adversely affect occupancy at the Property. In addition, key tenants at one or more Properties might terminate their leases as a result of mergers, acquisitions, consolidations, dispositions or bankruptcies in the retail industry. The bankruptcy and/or closure of one or more significant tenants, if we are not able to successfully re-tenant the affected space, could have a material adverse effect on both the operating revenues and underlying value of the Properties involved, reducing the likelihood that we would be able to sell the Properties if we decided to do so, or we may be required to incur redevelopment costs in order to successfully obtain new anchors or other significant tenants when such vacancies exist.

Our Properties may be subject to impairment charges which can adversely affect our financial results.

We periodically evaluate long-lived assets to determine if there has been any impairment in their carrying values and record impairment losses if the undiscounted cash flows estimated to be generated by those assets are less than their carrying amounts or if there are other indicators of impairment. If it is determined that an impairment has occurred, the amount of the impairment charge is equal to the excess of the asset’s carrying value over its estimated fair value, which could have a material adverse effect on our financial results in the accounting period in which the adjustment is made. Our estimates of undiscounted cash flows expected to be generated by each property are based on a number of assumptions such as leasing expectations, operating budgets, estimated useful lives, future maintenance expenditures, intent to hold for use and capitalization rates. These assumptions are subject to economic and market uncertainties including, but not limited to, demand for space, competition for tenants, changes in market rental rates and costs to operate each property. As these factors are difficult to predict and are subject to future events that may alter our assumptions, the future cash flows estimated in our impairment analyses may not be achieved. During the second quarter of 2010, we recorded a non-cash loss on impairment of real estate of $25.4 million related to one of our Properties.

Inflation or deflation may adversely affect our financial condition and results of operations.

Increased inflation could have a pronounced negative impact on our mortgage and debt interest and general and administrative expenses, as these costs could increase at a rate higher than our rents. Also, inflation may adversely affect tenant leases with stated rent increases, which could be lower than the increase in inflation at any given time. Inflation could also have an adverse effect on consumer spending which could impact our tenants' sales and, in turn, our percentage rents, where applicable.

Deflation can result in a decline in general price levels, often caused by a decrease in the supply of money or credit. The predominant effects of deflation are high unemployment, credit contraction and weakened consumer demand. Restricted lending practices could impact our ability to obtain financings or refinancings for our Properties and our tenants’ ability to obtain credit. Decreases in consumer demand can have a direct impact on our tenants and the rents we receive.

Certain agreements with prior owners of Properties that we have acquired may inhibit our ability to enter into future sale or refinancing transactions affecting such Properties, which otherwise would be in the best interests of the Company and our stockholders.

Certain Properties that we originally acquired from third parties had unrealized gain attributable to the difference between the fair market value of such Properties and the third parties’ adjusted tax basis in the Properties immediately prior to their contribution of such Properties to the Operating Partnership pursuant to our acquisition. For this reason, a taxable sale by us of any of such Properties, or a significant reduction in the debt encumbering such Properties, could result in adverse tax consequences to the third parties who contributed these Properties in exchange for interests in the Operating Partnership. Under the terms of these transactions, we have generally agreed that we either will not sell or refinance such an acquired Property for a number of years in any transaction that would trigger adverse tax consequences for the parties from whom we acquired such Property, or else we will reimburse such parties for all or a portion of the additional taxes they are required to pay as a result of

the transaction. Accordingly, these agreements may cause us not to engage in future sale or refinancing transactions affecting such Properties which otherwise would be in the best interests of the Company and our stockholders, or may increase the costs to us of engaging in such transactions.

Uninsured losses could adversely affect our financial condition, and in the future our insurance may not include coverage for acts of terrorism.

We carry a comprehensive blanket policy for general liability, property casualty (including fire, earthquake and flood) and rental loss covering all of the Properties, with specifications and insured limits customarily carried for similar properties. However, even insured losses could result in a serious disruption to our business and delay our receipt of revenue. Furthermore, there are some types of losses, including lease and other contract claims, as well as some types of environmental losses, that generally are not insured or are not economically insurable. If an uninsured loss or a loss in excess of insured limits occurs, we could lose all or a portion of the capital we have invested in a Property, as well as the anticipated future revenues from the Property. If this happens, we, or the applicable Property’s partnership, may still remain obligated for any mortgage debt or other financial obligations related to the Property.

The general liability and property casualty insurance policies on our Properties currently include coverage for losses resulting from acts of terrorism, whether foreign or domestic. While we believe that the Properties are adequately insured in accordance with industry standards, the cost of general liability and property casualty insurance policies that include coverage for acts of terrorism has risen significantly subsequent to September 11, 2001. The cost of coverage for acts of terrorism is currently mitigated by the Terrorism Risk Insurance Act (“TRIA”). If TRIA is not extended beyond its current expiration date of December 31, 2014, we may incur higher insurance costs and greater difficulty in obtaining insurance that covers terrorist-related damages. Our tenants may also experience similar difficulties.

The U.S. federal income tax treatment of corporate dividends may make our stock less attractive to investors, thereby lowering our stock price.

The maximum U.S. federal income tax rate for qualified dividends received by individual taxpayers has been reduced generally from 38.6% to 15.0% (currently effective from January 1, 2003 through December 31, 2010). However, dividends payable by REITs are generally not eligible for such treatment. Although this legislation did not have a directly adverse effect on the taxation of REITs or dividends paid by REITs, the more favorable treatment for certain non-REIT dividends could cause individual investors to consider investments in non-REIT corporations as more attractive relative to an investment in a REIT, which could have an adverse impact on the market price of our stock.

RISKS RELATED TO DEBT AND FINANCIAL MARKETS

A deterioration of the capital and credit markets could adversely affect our ability to access funds and the capital needed to refinance debt or obtain new debt.

We are significantly dependent upon external financing to fund the growth of our business and ensure that we meet our debt servicing requirements. Our access to financing depends on the willingness of lending institutions to grant credit to us and conditions in the capital markets in general. An economic recession may cause extreme volatility and disruption in the capital and credit markets. We rely upon our largest credit facilities as sources of funding for numerous transactions. Our access to these funds is dependent upon the ability of each of the participants to the credit facilities to meet their funding commitments. When markets are volatile, access to capital and credit markets could be disrupted over an extended period of time and many financial institutions may not have the available capital to meet their previous commitments. The failure of one or more significant participants to our credit facilities to meet their funding commitments could have an adverse affect on our financial condition and results of operations. This may make it difficult to obtain the financing we may need for future growth and/or to meet our debt service obligations as they mature. Although we have successfully obtained debt for refinancings of our maturing debt, acquisitions and the construction of new developments in the past, we cannot make any assurances as to whether we will be able to obtain debt in the future, or that the financing options available to us will be on favorable or acceptable terms.

Our indebtedness is substantial and could impair our ability to obtain additional financing.

After payment of the underwriting discount and our other offering expenses, we received approximately $123.6 million in net proceeds, including accrued dividends, from the sale of additional shares of our 7.375% Series D Cumulative Redeemable Preferred Stock in our recent offering which closed on March 1, 2010. These proceeds were used to reduce amounts outstanding under our current credit facilities and for general corporate purposes.

At June 30, 2010, our total share of consolidated and unconsolidated debt outstanding was approximately $6,019.7 million, which represented approximately 68.2% of our total market capitalization at that time, and our total share of consolidated and unconsolidated debt maturing in 2010, 2011 and 2012, giving effect to all maturity extensions that are available at our election, was approximately $219.6 million, $439.5 million and $966.3 million, respectively. Our substantial leverage could have important consequences. For example, it could:

·	result in the acceleration of a significant amount of debt for non-compliance with the terms of such debt or, if such debt contains cross-default or cross-acceleration provisions, other debt;

·	result in the loss of assets due to foreclosure or sale on unfavorable terms, which could create taxable income without accompanying cash proceeds;

·	materially impair our ability to borrow unused amounts under existing financing arrangements or to obtain additional financing or refinancing on favorable terms or at all;

·	require us to dedicate a substantial portion of our cash flow to paying principal and interest on our indebtedness, reducing the cash flow available to fund our business, to pay dividends, including those necessary to maintain our REIT qualification, or to use for other purposes;

·	increase our vulnerability to an economic downturn;

·	limit our ability to withstand competitive pressures; or

·	reduce our flexibility to respond to changing business and economic conditions.

If any of the foregoing occurs, our business, financial condition, liquidity, results of operations and prospects could be materially and adversely affected, and the trading price of our common stock or other securities could decline significantly.

Rising interest rates could both increase our borrowing costs, thereby adversely affecting our cash flows and the amounts available for distributions to our stockholders, and decrease our stock price, if investors seek higher yields through other investments.

An environment of rising interest rates could lead holders of our securities to seek higher yields through other investments, which could adversely affect the market price of our stock. One of the factors that may influence the price of our stock in public markets is the annual distribution rate we pay as compared with the yields on alternative investments. Numerous other factors, such as governmental regulatory action and tax laws, could have a significant impact on the future market price of our stock. In addition, increases in market interest rates could result in increased borrowing costs for us, which may adversely affect our cash flow and the amounts available for distributions to our stockholders.

As of June 30, 2010, our total share of consolidated and unconsolidated variable rate debt was $1,613.1 million. Increases in interest rates will increase our cash interest payments on the variable rate debt we have outstanding from time to time. If we do not have sufficient cash flow from operations, we might not be able to make all required payments of principal and interest on our debt, which could result in a default or have a material adverse effect on our financial condition and results of operations, and which might adversely affect our cash flow and our ability to make distributions to shareholders. These significant debt payment obligations might also require us to use a significant portion of our cash flow from operations to make interest and principal payments on our debt rather than for other purposes such as working capital, capital expenditures or distributions on our common equity.

Certain of our credit facilities, the loss of which could have a material, adverse impact on our financial condition and results of operations, are conditioned upon the Operating Partnership continuing to be managed by certain members of its current senior management and by such members of senior management continuing to own a significant direct or indirect equity interest in the Operating Partnership.

Certain of the Operating Partnership’s lines of credit are conditioned upon the Operating Partnership continuing to be managed by certain members of its current senior management and by such members of senior management continuing to own a significant direct or indirect equity interest in the Operating Partnership (including both units of limited partnership in the Operating Partnership and shares of our common stock owned by such members of senior management). If the failure of one or more of these conditions resulted in the loss of these credit facilities and we were unable to obtain suitable replacement financing, such loss could have a material, adverse impact on our financial position and results of operations.

Our hedging arrangements might not be successful in limiting our risk exposure, and we might be required to incur expenses in connection with these arrangements or their termination that could harm our results of operations or financial condition.

From time to time, we use interest rate hedging arrangements to manage our exposure to interest rate volatility, but these arrangements might expose us to additional risks, such as requiring that we fund our contractual payment obligations under such arrangements in relatively large amounts or on short notice. Developing an effective interest rate risk strategy is complex, and no strategy can completely insulate us from risks associated with interest rate fluctuations. We cannot assure you that our hedging activities will have a positive impact on our results of operations or financial condition. We might be subject to additional costs, such as transaction fees or breakage costs, if we terminate these arrangements. In addition, although our interest rate risk management policy establishes minimum credit ratings for counterparties, this does not eliminate the risk that a counterparty might fail to honor its obligations, particularly given current market conditions.

The covenants in our credit facilities might adversely affect us.

Our credit facilities require us to satisfy certain affirmative and negative covenants and to meet numerous financial tests. The financial covenants under the credit facilities require, among other things, that our Debt to Gross Asset Value ratio, as defined in the agreements to our credit facilities, be less than 65%, that our Interest Coverage ratio, as defined, be greater than 1.75, and that our Debt Service Coverage ratio, as defined, be greater than 1.50. Compliance with each of these ratios is dependent upon our financial performance. The Debt to Gross Asset Value ratio is based, in part, on applying a capitalization rate to our earnings before income taxes, depreciation and amortization (“EBITDA”), as defined in the agreements to our credit facilities. Based on this calculation method, decreases in EBITDA would result in an increased Debt to Gross Asset Value ratio, although overall debt levels remain constant. As of June 30, 2010, the Debt to Gross Asset Value ratio was 54% and we were in compliance with all other covenants related to our credit facilities.

RISKS RELATED TO GEOGRAPHIC CONCENTRATIONS

Since our Properties are located principally in the Southeastern and Midwestern United States, our financial position, results of operations and funds available for distribution to shareholders are subject generally to economic conditions in these regions.

Our Properties are located principally in the southeastern and midwestern United States. Our Properties located in the southeastern United States accounted for approximately 47.5% of our total revenues from all Properties for the six months ended June 30, 2010 and currently include 44 malls, 20 associated centers, nine community centers and 18 office buildings. Our Properties located in the midwestern United States accounted for approximately 33.3% of our total revenues from all Properties for the six months ended June 30, 2010 and currently include 26 malls and four associated centers. Our results of operations and funds available for distribution to shareholders therefore will be subject generally to economic conditions in the southeastern and midwestern United States. While we already have Properties located in eight states across the southwestern, northeastern and western regions, we will continue to look for opportunities to geographically diversify our portfolio in order to minimize dependency on any particular region; however, the expansion of the portfolio through both acquisitions and developments is contingent on many factors including consumer demand, competition and economic conditions.

Our financial position, results of operations and funds available for distribution to shareholders could be adversely affected by any economic downturn affecting the operating results at our Properties in the St. Louis, MO, Nashville, TN, Kansas City (Overland Park), KS, Madison, WI, and Chattanooga, TN metropolitan areas, which are our five largest markets.

Our Properties located in the St. Louis, MO, Nashville, TN, Kansas City (Overland Park), KS, Madison, WI, and Chattanooga, TN metropolitan areas accounted for approximately 9.8%, 3.8%, 3.0%, 2.8% and 2.6%, respectively, of our total revenues for the six months ended June 30, 2010. No other market accounted for more than 2.6% of our total revenues for the six months ended June 30, 2010. Our financial position and results of operations will therefore be affected by the results experienced at Properties located in these metropolitan areas.

RISKS RELATED TO INTERNATIONAL INVESTMENTS

Ownership interests in investments or joint ventures outside the United States present numerous risks that differ from those of our domestic investments.

We have an investment in a mall operating and real estate development company in China that is currently immaterial to our consolidated financial position. International development and ownership activities yield additional risks that differ from those related to our domestic properties and operations. These additional risks include, but are not limited to:

·	Impact of adverse changes in exchange rates of foreign currencies;

·	Difficulties in the repatriation of cash and earnings;

·	Differences in managerial styles and customs;

·	Changes in applicable laws and regulations in the United States that affect foreign operations;

·	Changes in foreign political, legal and economic environments; and

·	Differences in lending practices.

Our international activities are currently limited in their scope. However, should our investments in international joint ventures or investments grow, these additional risks could increase in significance and adversely affect our results of operations.

RISKS RELATED TO DIVIDENDS

We may change the dividend policy for our common stock in the future.

We issued 4,754,355 shares of common stock for a portion of our dividend payment for the first quarter of 2009. All subsequent dividend payments through the date of issuance of this report have been paid in cash. Depending upon our liquidity needs, we reserve the right to pay any or all of a dividend in a combination of cash and shares of common stock, in accordance with applicable revenue procedures of the IRS. In the event that we pay a portion of our dividends in shares of our common stock pursuant to such procedures, taxable U.S. stockholders would be required to pay tax on the entire amount of the dividend, including the portion paid in shares of common stock, in which case such stockholders may have to use cash from other sources to pay such tax. If a U.S. stockholder sells the common stock it receives as a dividend in order to pay its taxes, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to non-U.S. stockholders, we may be required to withhold federal tax with respect to our dividends, including dividends that are paid in common stock. In addition, if a significant number of our stockholders sell shares of our common stock in order to pay taxes owed on dividends, such sales would put downward pressure on the market price of our common stock.

The decision to declare and pay dividends on our common stock in the future, as well as the timing, amount and composition of any such future dividends, will be at the sole discretion of our Board of Directors and will depend on our earnings, taxable income, funds from operations, liquidity, financial condition, capital requirements, contractual prohibitions or other limitations under our indebtedness and preferred stock, the annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended (the

“Internal Revenue Code”), Delaware law and such other factors as our Board of Directors deems relevant. Any dividends payable will be determined by our Board of Directors based upon the circumstances at the time of declaration. Any change in our dividend policy could have a material adverse effect on the market price of our common stock.

RISKS RELATED TO FEDERAL INCOME TAX LAWS

We conduct a portion of our business through taxable REIT subsidiaries, which are subject to certain tax risks.

We have established several taxable REIT subsidiaries including our management company. Despite our qualification as a REIT, our taxable REIT subsidiaries must pay income tax on their taxable income. In addition, we must comply with various tests to continue to qualify as a REIT for federal income tax purposes, and our income from and investments in our taxable REIT subsidiaries generally do not constitute permissible income and investments for these tests. While we will attempt to ensure that our dealings with our taxable REIT subsidiaries will not adversely affect our REIT qualification, we cannot provide assurance that we will successfully achieve that result. Furthermore, we may be subject to a 100% penalty tax, or our taxable REIT subsidiaries may be denied deductions, to the extent our dealings with our taxable REIT subsidiaries are not deemed to be arm’s length in nature.

If we fail to qualify as a REIT in any taxable year, our funds available for distribution to stockholders will be reduced.

We intend to continue to operate so as to qualify as a REIT under the Internal Revenue Code. Although we believe that we are organized and operate in such a manner, no assurance can be given that we currently qualify and in the future will continue to qualify as a REIT. Such qualification involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to qualify. In addition, no assurance can be given that legislation, new regulations, administrative interpretations or court decisions will not significantly change the tax laws with respect to qualification or its corresponding federal income tax consequences. Any such change could have a retroactive effect.

If in any taxable year we were to fail to qualify as a REIT, we would not be allowed a deduction for distributions to stockholders in computing our taxable income and we would be subject to federal income tax on our taxable income at regular corporate rates. Unless entitled to relief under certain statutory provisions, we also would be disqualified from treatment as a REIT for the four taxable years following the year during which qualification was lost. As a result, the funds available for distribution to our stockholders would be reduced for each of the years involved. This would likely have a significant adverse effect on the value of our securities and our ability to raise additional capital. In addition, we would no longer be required to make distributions to our stockholders. We currently intend to operate in a manner designed to qualify as a REIT. However, it is possible that future economic, market, legal, tax or other considerations may cause our Board of Directors, with the consent of a majority of our stockholders, to revoke the REIT election.

Any issuance or transfer of our capital stock to any person in excess of the applicable limits on ownership necessary to maintain our status as a REIT would be deemed void ab initio, and those shares would automatically be transferred to a non-affiliated charitable trust.

To maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) at any time during the last half of a taxable year. Our certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by vote, value or number of shares (other than Charles Lebovitz, Executive Chairman of our board of directors and our former Chief Executive Officer, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code’s attribution rules). The affirmative vote of 66 2/3% of our outstanding voting stock is required to amend this provision.

Our board of directors may, subject to certain conditions, waive the applicable ownership limit upon receipt of a ruling from the IRS or an opinion of counsel to the effect that such ownership will not jeopardize our status as a REIT. Absent any such waiver, however, any issuance or transfer of our capital stock to any person in excess of the applicable ownership limit or any issuance or transfer of shares of such stock which would cause us to be beneficially owned by fewer than 100 persons, will be null and void and the intended transferee will acquire no rights to the stock. Instead, such issuance or transfer with respect to that number of shares that would be owned by the transferee in excess of the ownership limit provision would be deemed void ab initio and those shares would automatically be transferred to a trust for the exclusive benefit of a charitable beneficiary to be designated by us, with a trustee designated by us, but who would not be affiliated with us or with the prohibited owner. Any acquisition of our capital stock and continued holding or ownership of our capital stock constitutes, under our certificate of incorporation, a continuous representation of compliance with the applicable ownership limit.

In order to maintain our status as a REIT and avoid the imposition of certain additional taxes under the Internal Revenue Code, we must satisfy minimum requirements for distributions to shareholders, which may limit the amount of cash we might otherwise have been able to retain for use in growing our business.

To maintain our status as a REIT under the Internal Revenue Code, we generally will be required each year to distribute to our stockholders at least 90% of our taxable income after certain adjustments. However, to the extent that we do not distribute all of our net capital gains or distribute at least 90% but less than 100% of our REIT taxable income, as adjusted, we will be subject to tax on the undistributed amount at regular corporate tax rates, as the case may be. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which certain distributions paid by us during each calendar year are less than the sum of 85% of our ordinary income for such calendar year, 95% of our capital gain net income for the calendar year and any amount of such income that was not distributed in prior years. In the case of property acquisitions, including our initial formation, where individual Properties are contributed to our Operating Partnership for Operating Partnership units, we have assumed the tax basis and depreciation schedules of the entities’ contributing Properties. The relatively low tax basis of such contributed Properties may have the effect of increasing the cash amounts we are required to distribute as dividends, thereby potentially limiting the amount of cash we might otherwise have been able to retain for use in growing our business. This low tax basis may also have the effect of reducing or eliminating the portion of distributions made by us that are treated as a non-taxable return of capital.

Complying with REIT requirements might cause us to forego otherwise attractive opportunities.

In order to qualify as a REIT for U.S. federal income tax purposes, we must satisfy tests concerning, among other things, our sources of income, the nature of our assets, the amounts we distribute to our shareholders and the ownership of our stock. We may also be required to make distributions to our shareholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with REIT requirements may cause us to forego opportunities we would otherwise pursue. In addition, the REIT provisions of the Internal Revenue Code impose a 100% tax on income from “prohibited transactions.” “Prohibited transactions” generally include sales of assets that constitute inventory or other property held for sale in the ordinary course of business, other than foreclosure property. This 100% tax could impact our desire to sell assets and other investments at otherwise opportune times if we believe such sales could be considered “prohibited transactions.”

Our holding company structure makes us dependent on distributions from the Operating Partnership.

Because we conduct our operations through the Operating Partnership, our ability to service our debt obligations and pay dividends to our shareholders is strictly dependent upon the earnings and cash flows of the Operating Partnership and the ability of the Operating Partnership to make distributions to us. Under the Delaware Revised Uniform Limited Partnership Act, the Operating Partnership is prohibited from making any distribution to us to the extent that at the time of the distribution, after giving effect to the distribution, all liabilities of the Operating Partnership (other than some non-recourse liabilities and some liabilities to the partners) exceed the fair value of the assets of the Operating Partnership. Additionally, the terms of some of the debt to which our Operating Partnership is a party may limit its ability to make some types of payments and other distributions to us. This in turn may limit our ability to make some types of payments, including payment of dividends on our outstanding capital stock, unless we meet certain financial tests or such payments or dividends are required to maintain our qualification as a REIT or to avoid the imposition of any federal income or excise tax

on undistributed income. Any inability to make cash distributions from the Operating Partnership could jeopardize our ability to pay dividends on our outstanding shares of capital stock and to maintain qualification as a REIT.

RISKS RELATED TO OUR ORGANIZATIONAL STRUCTURE

The ownership limit described above, as well as certain provisions in our amended and restated certificate of incorporation and bylaws, and certain provisions of Delaware law, may hinder any attempt to acquire us.

There are certain provisions of Delaware law, our amended and restated certificate of incorporation, our bylaws, and other agreements to which we are a party that may have the effect of delaying, deferring or preventing a third party from making an acquisition proposal for us. These provisions may also inhibit a change in control that some, or a majority, of our stockholders might believe to be in their best interest or that could give our stockholders the opportunity to realize a premium over the then-prevailing market prices for their shares. These provisions and agreements are summarized as follows:

The Ownership Limit – As described above, to maintain our status as a REIT under the Internal Revenue Code, not more than 50% in value of our outstanding capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Internal Revenue Code to include certain entities) during the last half of a taxable year. Our certificate of incorporation generally prohibits ownership of more than 6% of the outstanding shares of our capital stock by any single stockholder determined by value (other than Charles Lebovitz, David Jacobs, Richard Jacobs and their affiliates under the Internal Revenue Code’s attribution rules). In addition to preserving our status as a REIT, the ownership limit may have the effect of precluding an acquisition of control of us without the approval of our board of directors.

Classified Board of Directors; Removal for Cause – Our certificate of incorporation provides for a board of directors divided into three classes, with one class elected each year to serve for a three-year term. As a result, at least two annual meetings of stockholders may be required for the stockholders to change a majority of our board of directors. In addition, our stockholders can only remove directors for cause and only by a vote of 75% of the outstanding voting stock. Collectively, these provisions make it more difficult to change the composition of our board of directors and may have the effect of encouraging persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with our board of directors rather than pursue non-negotiated takeover attempts.

Advance Notice Requirements for Stockholder Proposals – Our bylaws establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of our stockholders. These procedures generally require advance written notice of any such proposals, containing prescribed information, to be given to our Secretary at our principal executive offices not less than 60 days nor more than 90 days prior to the meeting.

Vote Required to Amend Bylaws – A vote of 66 2/3% of our outstanding voting stock (in addition to any separate approval that may be required by the holders of any particular class of stock) is necessary for stockholders to amend our bylaws.

Delaware Anti-Takeover Statute – We are a Delaware corporation and are subject to Section 203 of the Delaware General Corporation Law. In general, Section 203 prevents an “interested stockholder” (defined generally as a person owning 15% or more of a company’s outstanding voting stock) from engaging in a “business combination” (as defined in Section 203) with us for three years following the date that person becomes an interested stockholder unless:

(a)

before that person became an interested holder, our board of directors approved the transaction in which the interested holder became an interested stockholder or approved the business combination;

(b)

upon completion of the transaction that resulted in the interested stockholder becoming an interested stockholder, the interested stockholder owns 85% of our voting stock outstanding at the time the transaction commenced (excluding stock held by directors who are also officers and by

employee stock plans that do not provide employees with the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer); or

(c)

following the transaction in which that person became an interested stockholder, the business combination is approved by our board of directors and authorized at a meeting of stockholders by the affirmative vote of the holders of at least two-thirds of our outstanding voting stock not owned by the interested stockholder.

Under Section 203, these restrictions also do not apply to certain business combinations proposed by an interested stockholder following the announcement or notification of certain extraordinary transactions involving us and a person who was not an interested stockholder during the previous three years or who became an interested stockholder with the approval of a majority of our directors, if that extraordinary transaction is approved or not opposed by a majority of the directors who were directors before any person became an interested stockholder in the previous three years or who were recommended for election or elected to succeed such directors by a majority of directors then in office.

Certain ownership interests held by members of our senior management may tend to create conflicts of interest between such individuals and the interests of the Company and our Operating Partnership.

Tax Consequences of the Sale or Refinancing of Certain Properties – Since certain of our Properties had unrealized gain attributable to the difference between the fair market value and adjusted tax basis in such Properties immediately prior to their contribution to the Operating Partnership, a taxable sale of any such Properties, or a significant reduction in the debt encumbering such Properties, could cause adverse tax consequences to the members of our senior management who owned interests in our predecessor entities. As a result, members of our senior management might not favor a sale of a property or a significant reduction in debt even though such a sale or reduction could be beneficial to us and the Operating Partnership. Our bylaws provide that any decision relating to the potential sale of any property that would result in a disproportionately higher taxable income for members of our senior management than for us and our stockholders, or that would result in a significant reduction in such property’s debt, must be made by a majority of the independent directors of the board of directors. The Operating Partnership is required, in the case of such a sale, to distribute to its partners, at a minimum, all of the net cash proceeds from such sale up to an amount reasonably believed necessary to enable members of our senior management to pay any income tax liability arising from such sale.

Interests in Other Entities; Policies of the Board of Directors – Certain entities owned in whole or in part by members of our senior management, including the construction company that built or renovated most of our properties, may continue to perform services for, or transact business with, us and the Operating Partnership. Furthermore, certain property tenants are affiliated with members of our senior management. Accordingly, although our bylaws provide that any contract or transaction between us or the Operating Partnership and one or more of our directors or officers, or between us or the Operating Partnership and any other entity in which one or more of our directors or officers are directors or officers or have a financial interest, must be approved by our disinterested directors or stockholders after the material facts of the relationship or interest of the contract or transaction are disclosed or are known to them, these affiliations could nevertheless create conflicts between the interests of these members of senior management and the interests of the Company, our shareholders and the Operating Partnership in relation to any transactions between us and any of these entities.

ITEM 2: Unregistered Sales of Equity Securities and Use of Proceeds

(c) The following table presents information with respect to repurchases of common stock made by us during the three months ended June 30, 2010:

Period	Total Number of Shares Purchased (1)		Average Price Paid per Share (2)	Total Number of Shares Purchased as Part of a Publicly Announced Plan	Maximum Number of Shares that May Yet Be Purchased Under the Plan
April 1–30, 2010	—	$	—	—	—
May 1–31, 2010	10,668	$	13.98	—	—
June 1–30, 2010	159	$	14.20	—	—
Total	10,827	$	13.98	—	—

(1)	Represents shares surrendered to the Company by employees to satisfy federal and state income tax withholding requirements related to the vesting of shares of restricted stock.

(2)	Represents the market value of the common stock on the vesting date for the shares of restricted stock, which was used to determine the number of shares required to be surrendered to satisfy income tax withholding requirements.

ITEM 3: Defaults Upon Senior Securities

None

ITEM 4: (Removed and Reserved)

ITEM 5: Other Information

(a)

On July 29, 2010, we extended and modified our $105.0 million secured credit facility with First Tennessee Bank NA, as administrative agent. The revised facility reflects an extension of the maturity of the facility from June 2011 to June 2012. Amounts outstanding thereunder will continue to bear interest at an annual rate equal to one-month, three-month, six-month or one-year LIBOR (as selected by us), subject to a floor of 1.50%, plus 300 basis points. At June 1, 2011, the total capacity on this line of credit could decrease to $82.5 million due to an exiting participant lender that has provided $22,500 of this line’s total capacity. The Company is currently negotiating the terms with a potential replacement lender and believes that an agreement with a replacement lender or lenders will be executed prior to that time.

ITEM 6: Exhibits

The Exhibit Index attached to this report is incorporated by reference into this Item 6.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CBL & ASSOCIATES PROPERTIES, INC.

/s/ John N. Foy

_____________________________________

John N. Foy

Vice Chairman of the Board, Chief Financial

Officer, Treasurer and Secretary

(Authorized Officer and Principal Financial Officer)

Date: August 9, 2010

INDEX TO EXHIBITS

Exhibit Number	Description

10.5.9	CBL & Associates Properties, Inc. Second Amended and Restated Stock Incentive Plan.*
10.15.3	Amended and Restated Loan Agreement between the Operating Partnership, The Lakes Mall, LLC, Lakeshore / Sebring Limited Partnership and First Tennessee Bank National Association, dated July 29, 2010.
12.1	Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends.
31.1	Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification pursuant to Securities Exchange Act Rule 13a-14(a) by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Executive Officer, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification pursuant to Securities Exchange Act Rule 13a-14(b) by the Chief Financial Officer as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Effective May 4, 2010, in conjunction with an immaterial amendment waiving the transfer restrictions imposed on common stock granted to Non-Employee Directors in the event of death or disability, the Company’s Board of Directors and Compensation Committee also approved a restatement of the Stock Incentive Plan to incorporate and clearly reflect the changes made by this and all prior amendments, as well as to reflect the antidilution adjustments made in connection with the two-for-one stock split of the Company’s Common Stock which was effected in the form of a stock dividend as of June 15, 2005.

EX-10.5.9 2 exhibit1059.htm EXHIBIT 10.5.9 exhibit1059.htm

Exhibit 10.5.9

SECOND AMENDED AND RESTATED

CBL & ASSOCIATES PROPERTIES, INC.

STOCK INCENTIVE PLAN

SECOND AMENDED AND RESTATED

CBL & ASSOCIATES PROPERTIES, INC.

STOCK INCENTIVE PLAN

WHEREAS, the CBL & Associates Properties, Inc. 1993 Stock Incentive Plan was adopted by the Company on October 27, 1993 (the “Initial Plan”);

WHEREAS, the Initial Plan has been amended by Amendment No. 1 on May 1, 1996, Amendment No. 2 on May 3, 2000 and by Amendment No. 3 on May 7, 2002;

WHEREAS, the Initial Plan, as amended, was scheduled to terminate on October 27, 2003;

WHEREAS, the Awards granted under the Initial Plan, as amended, and the status of the Initial Plan, as amended, were as follows as of March 10, 2003 (the record date for stockholders voting on the adoption of the Amended and Restated Plan, as defined below, and prior to the antidilution adjustment made to reflect the 6/15/05 Stock Split, as defined below):

Stock Awards (fully vested on grant or fully vested as of March 10, 2003) 301,336

Deferred Stock Awards (subject to vesting/issuance

following March 10, 2003) 205,534

Outstanding Employee Stock Options (vested and non-vested unexercised

stock options granted to employees prior to March 10, 2003) 2,510,377

Non-Employee Directors Shares 3,000

Outstanding Non-Employee Directors Stock Options 20,000

Shares Available For Awards 1,109,461

WHEREAS, pursuant to the recommendation of the Corporation’s Board of Directors, the Corporation’s shareholders adopted the Amended and Restated CBL & Associates Properties, Inc. Stock Incentive Plan on May 5, 2003 (the “Amended and Restated Plan”); and

WHEREAS, pursuant to the recommendation of the Compensation Committee of the Corporation’s Board of Directors, the Board of Directors adopted that certain Amendment #1 to the Amended and Restated Plan on October 29, 2003, which authorized the granting of up to 100 shares of restricted Common Stock to the Non-Employee Directors of the Corporation in lieu of annual grants of stock options; and

WHEREAS, pursuant to the recommendation of the Compensation Committee of the Corporation’s Board of Directors, the Board of Directors adopted that certain Amendment #2 to the Amended and Restated Plan on November 4, 2004, which increased the number of shares of restricted Common Stock that may be granted to the Non-Employee Directors of the Corporation in lieu of stock options; and

WHEREAS, effective as of June 15, 2005, acting pursuant to Section 3(b) of the Amended and Restated Plan in conjunction with a two-for-one stock split of the Company’s

Common Stock, which was effected in the form of a stock dividend as of such date (the “6/15/05 Stock Split”), the Compensation Committee determined to make appropriate and equitable adjustments to the Amended and Restated Plan and to the number of shares subject to any award and any deferred compensation arrangement outstanding under the Amended and Restated Plan, and to any vesting schedule and exercise price applicable to each such outstanding award, as well as to the total number of shares authorized for issuance under the Amended and Restated Plan, to reflect the 6/15/05 Stock Split and to preserve the intrinsic value of each such award and deferred compensation arrangement outstanding at such time; and

WHEREAS, pursuant to the recommendation of the Compensation Committee of the Corporation’s Board of Directors, the Board of Directors adopted that certain Amendment #3 to the Amended and Restated Plan as of May 4, 2010, which amended the terms of the transfer restrictions imposed on restricted common stock granted to Non-Employee Directors to waive the transfer restrictions in the event of the death or disability of a Non-Employee Director; and

WHEREAS, pursuant to the recommendation of the Compensation Committee of the Corporation’s Board of Directors and in conjunction with the adopton of Amendment #3 as described above, the Board of Directors also approved, effective as of May 4, 2010, a further restatement of the the Amended and Restated Plan, to be desinated the Second Amended and Restated CBL & Associates Properties, Inc. Stock Incentive Plan (the “Second Amended and Restated Plan”), to create an official version of such plan to be filed as an exhibit to the Corporation’s periodic reports filed with the SEC that incorporates and clearly reflects the changes made by Amendment #1, Amendment #2 and Amendment #3 thereto, as well as by the antidilution adjustments effected in connection with the 6/15/05 Stock Split.

NOW, THEREFORE, pursuant to the action of the Board of Directors of the Company on May 4, 2010, the Amended and Restated Plan, as amended by Amendment #1, Amendment #2 and Amendment #3 thereto as described above, as well as by the antidilution adjustments effected in connection with the 6/15/05 Stock Split, is hereby restated in its entirety to reflect such changes, on the terms and provisions set forth below. Notwithstanding the preceding sentence, the terms and provisions of Pre-Amendment Awards, as defined below, continue in force as such terms and provisions existed on the date such Pre-Amendment Awards were made.

Effective Date – as a restatement of the original Amended and Restated Plan, as amended, the effective date of this Plan shall remain May 5, 2003, the date the Amended and Restated Plan was submitted to the Company’s stockholders for vote, as to all provisions hereof other than the changes previously effected by Amendment #1, Amendment #2, Amendment #3 and the antidilution adjustments effected in connection with the 6/15/05 Stock Split, each of which are effective as of their respective dates of adoption by the Corporation’s Board of Directors or by the Compensation Committee of the Corporation’s Board of Directors, as applicable.

Expiration Date – the expiration date of this Plan, after which no Awards may be granted hereunder, shall be May 5, 2013; provided, however, that the administration of the Plan shall continue in effect until all matters relating to the payment of Awards previously granted have been settled.

SECTION 1. Purpose; Definitions.

Purpose. The purpose of the Plan is to give the Company a significant advantage in attracting, retaining and motivating officers, employees and directors of the Company and to provide the Company and is Subsidiaries with the ability to provide incentives more directly linked to the long term profitability of the Company’s businesses and increases in stockholder value thereby strengthening the commitment of the Company’s officers, employees and directors to the welfare of the Company and promoting an identity of interest between stockholders and the Company’s officers, employees and directors.

Definitions. For purposes of the Plan, the following terms are defined as set forth below:

“Affiliate” means CBL & Associates Management, Inc., and any other corporation or other entity in which the Company has a substantial direct or indirect ownership interest, and designated by the Compensation Committee as such.

“Award” means awards/grants of Stock Option(s), unrestricted Stock, Restricted Stock, Non-Employee Director Share(s), Non-Employee Director Stock Option(s) and/or any other stock based awards described in Section 7 below that is made pursuant to the terms of this Plan.

“Board” means the Board of Directors of the Company.

“Cause” has the meaning set forth in Section 5(a)(ix) below.

“Change in Control” shall mean the happening of any of the following events:

(i) An acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either (A) the then outstanding shares of common Stock of the Company (the “Outstanding Common Stock”) or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Voting Securities”); excluding, however, the following: (I) any acquisition directly from the Company, other than an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired directly from the Company, (II) any acquisition by the Company, or members of the Company’s management, or any combination thereof, (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (IV) any acquisition by any Person pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (iii) of this definition; or

(ii) A change in the composition of the Board such that the individuals who, as of the effective date of the Plan, constitute the Board (such Board shall be hereinafter referred to as the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, for the purposes of this definition, that any individual who becomes a

member of the Board subsequent to such effective date, whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this provision) shall be considered as though such individual were a member of the Incumbent Board; but, provided further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board; or

(iii) The approval by the stockholders of the Company of a Corporate Event as defined in Section 8(a) below; excluding, however, such a Corporate Event pursuant to which

(A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Common Stock and Outstanding Voting Securities immediately prior to such Corporate Event will beneficially own, directly or indirectly, more than 60% of, respectively, the outstanding shares of common stock, and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Event (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Corporate Event, of the Outstanding Common Stock and Outstanding Voting Securities, as the case may be;

(B) no Person (other than the Company, any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or such corporation resulting from such Corporate Event) will beneficially own, directly or indirectly, 20% or more of, respectively, the outstanding shares of common stock of the corporation resulting from such Corporate Event or the combined voting power of the outstanding voting securities of such corporation entitled to vote generally in the election of directors except to the extent that such ownership existed with respect to the Company prior to the Corporate Event; and

(C) individuals who were members of the Incumbent Board will constitute at least a majority of the members of the board of directors of the corporation resulting from such Corporate Event; or

(iv) The approval by the stockholders of the Company of a complete liquidation or dissolution of the Company.

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor thereto.

“Commission” means the Securities and Exchange Commission or any successor agency.

“Common Stock” means common stock, par value $0.01 per share, of the Company.

“Company” means CBL & Associates Properties, Inc., Delaware corporation.

“Compensation Committee” means the Compensation Committee referred to in Section 2 below.

“Corporate Event” shall have the meaning ascribed to that term in Section 8(a) below.

“Date of Grant” means the date on which the granting of an Award is authorized or such other date as may be set forth in such authorization.

“Disability” means permanent and total disability as determined under procedures established by the Compensation Committee for purposes of the Plan.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor thereto.

“Fair Market Value” means, as of any given date, the mean between the highest and lowest reported sales prices of the Common Stock on the New York Stock Exchange or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on NASDAQ. If there is no regular public trading market for such Common Stock the Fair Market Value of the Common Stock shall be determined by the Compensation Committee in good faith.

“Incentive Stock Option” means any Stock Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.

“Mature Stock” shall have the meaning ascribed to that term in Section 5(a)(iv) below.

“Non-Employee Director Share” means a share of Common Stock granted to Non-Employee Directors as set forth in Section 13 below.

“Non-Employee Director Stock Option” means a Stock Option granted to Non-Employee Directors as set forth in Section 13 below.

“Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

“Participant” shall mean any recipient of an Award under this Plan.

“Plan” means the Amended and Restated CBL & Associates Properties, Inc. Stock Incentive Plan, as set forth herein and as hereinafter amended from time to time.

“Pre-Amendment Awards” means collectively the Deferred Stock Awards set forth in the 4th Whereas clause above, the Outstanding Employee Stock Options set forth in the 4th Whereas clause above, the Non-Employee Director Shares set forth in the 4th Whereas clause above and the Outstanding Non-Employee Director Stock Options set forth in the 4th Whereas clause above.

“Restricted Stock” means an Award granted under Section 6 below.

“Retirement” means retirement from active employment under a pension plan of the Company, any Subsidiary or Affiliate, or under an employment contract with any of them, or termination of employment at or after age 65 under circumstances which the Compensation Committee, in its sole discretion, deems equivalent to retirement.

“Rule 16b-3” means Rule 16b-3, as promulgated by the Commission under Section 16(b) of the Exchange Act, as amended from time to time.

“Stock Award(s)” means any award of Common Stock of the Company, whether such award is in the form of Restricted Stock or Stock that is unrestricted.

“Stock Option” or “Option” means an option granted under Section 5(a) below.

“Subsidiary” means a “subsidiary corporation” within the meaning of Section 424(f) of the Code.

“Termination of Employment” means the termination of the Participant’s employment with the Company or any Subsidiary or Affiliate. A Participant employed by a Subsidiary or an Affiliate shall also be deemed to incur a Termination of Employment if the Subsidiary or Affiliate ceases to be such a Subsidiary or Affiliate, as the case may be, and the Participant does not immediately thereafter become an employee of the Company or another Subsidiary or Affiliate.

In addition, certain other terms used herein have definitions given to them in the first place in which they are used.

SECTION 2. Administration.

The Plan shall be administered by the Compensation Committee of the Board as such is presently situated on the Effective Date and as it shall be constituted after the Effective Date throughout the term of this Plan (the “Compensation Committee”). The Compensation Committee is required to be comprised of Independent Directors, as defined by the Board and/or applicable law. If at any time no Compensation Committee shall be in office, the functions of the Compensation Committee specified in the Plan shall be exercised by the Board or by such

other committee of the Board; provided any such other committee that shall be charged with the responsibility of exercising the functions of the Compensation Committee hereunder in the absence of the Compensation Committee shall be comprised of not less than two Persons who shall meet the definition of “Independent Director” as set forth above.

Subject to Section 14 hereof, the Compensation Committee shall have primary authority to grant Awards pursuant to the terms of the Plan to officers, employees and directors of the Company and its Subsidiaries and Affiliates.

Among other things, the Compensation Committee shall have the authority, subject to the terms of the Plan:

(a) to select the officers, employees and directors to whom Awards may from time to time be granted; provided that awards to non-employee directors shall be made only in accordance with Section 13 below;

(b) to determine whether and to what extent Incentive Stock Options, Non-Qualified Stock Options and Restricted Stock or any combination thereof are to be granted hereunder;

(d) to determine the terms and conditions of any Award granted hereunder (including, but not limited to, subject to Section 5(a) below, the option price, any vesting restriction or limitation and any vesting acceleration or forfeiture waiver regarding any Award and the shares of Common Stock relating thereto, based on such factors as the Compensation Committee shall determine);

(e) to modify, amend or adjust the terms and conditions of any Award, at any time or from time to time, including, but not limited to, with respect to performance goals and measurements applicable to performance-based Awards pursuant to the terms of the Plan;

(f) to determine to what extent and under what circumstances Common Stock and other amounts payable with respect to an Award shall be deferred; and

(g) to determine under what circumstances a Stock Option may be settled in cash or Common Stock under Section 5(a)(iv) below.

The Compensation Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan as it shall, from time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreement relating thereto) and to otherwise supervise the administration of the Plan.

The Compensation Committee may act with respect to the Plan only by a majority of its members then in office, except that the members thereof may authorize any one or more of their number or any officer of the Company to execute and deliver documents on behalf of the Compensation Committee.

Any determination made by the Compensation Committee or pursuant to delegated authority pursuant to the provisions of the Plan with respect to any Award shall be made in the sole discretion of the Compensation Committee or such delegate at the time of the grant of the Award or, unless in contravention of any express term of the Plan, at any time thereafter. All decisions made by the Compensation Committee or any appropriately delegated officer pursuant to the provisions of the Plan shall be final and binding on all persons, including the Company and Plan Participants subject to Plan provisions, including but not limited to Section 14 below.

SECTION 3. Common Stock Subject to Plan.

(a) Number of Shares of Common Stock Available. Subject to adjustment as provided herein, the total number of shares of Common Stock available for distribution pursuant to Awards under the Plan shall be 10,400,000 shares of Common Stock, and the maximum number of shares of Common Stock with respect to which Options may be granted to any Plan Participant during any calendar year shall not exceed 200,000. Shares subject to an Award under the Plan may be authorized and unissued shares or may be treasury shares.

(b) Adjustments. Awards granted under the Plan and any agreements evidencing such Awards, the maximum number of shares of Stock subject to all Awards under the Plan, the number of shares of Stock subject to outstanding Awards and the maximum number of shares of Stock with respect to which any one person may be granted Options or stock appreciation rights during any year may be subject to adjustment or substitution, as determined by the Company or the Compensation Committee, as to the number, price or kind of a share of Stock or other consideration subject to such Awards or as otherwise determined by the Company or the Compensation Committee to be equitable:

(i) in the event of changes in the outstanding Stock or in the capital structure of the Company by reason of stock dividends, stock splits, reverse stock splits, recapitalizations, reorganizations, mergers, consolidations, combinations, exchanges, or other relevant changes in capitalization occurring after the Date of Grant of any such Award; or

(ii) in the event of any change in applicable laws or any change in circumstances which results in or would result in any substantial dilution or enlargement of the rights granted to, or available for, Participants in the Plan; or

(iii) for any other reason which the Company or the Compensation Committee determines otherwise warrants equitable adjustment because it interferes with the intended operation of the Plan.

Any adjustment to Incentive Stock Options under this Section 3(b) shall take into account that adjustments which constitute a "modification" within the meaning of Section 424(h)(3) of the Code may have an adverse tax impact on such Incentive Stock Options and the Compensation Committee may, in its sole discretion, provide for a different adjustment or no adjustment in order to preserve the tax effects of Incentive Stock Options. Unless otherwise determined by the Company or the Compensation Committee, any adjustments or substitutions under this Section 3(b) shall be made in a manner which does not adversely affect the exemption provided pursuant to Rule 16b-3 under the Exchange Act and any such adjustments or substitutions shall be subject to the provisions of this Plan including, but not limited to Section 9 and Section 14 below. Further, with respect to Awards intended to qualify as "performance-based compensation" under Section 162(m) of the Code, such adjustments or substitutions shall, unless otherwise determined by the Company or the Compensation Committee, be made only to the extent that the Company or the Compensation Committee determines that such adjustments or substitutions may be made without a loss of deductibility for such Awards under Section 162(m) of the Code. The Company shall give each Participant notice of an adjustment hereunder and, upon notice, such adjustment shall be conclusive and binding for all purposes.

SECTION 4. Eligibility.

Officers, employees and directors of the Company, its Subsidiaries and Affiliates who are responsible for or contribute to the management, growth and profitability of the business of the Company, its Subsidiaries and Affiliates are eligible to be granted Awards under the Plan. Except as expressly authorized by Section 13 of the Plan, however, no grant shall be made to a director who is not an officer or a salaried employee of the Company, its Subsidiaries and/or Affiliates.

SECTION 5. Stock Options; Stock Awards.

(a) Stock Options. Stock Options may be granted alone or in addition to other Awards granted under the Plan and may be of two types: Incentive Stock Options and Non-Qualified Stock Options. Any Stock Option granted under the Plan shall be in such form as the Compensation Committee may from time to time approve.

The Compensation Committee shall have the authority to grant any optionee Incentive Stock Options, Non-Qualified Stock Options or both types of Stock Options. Incentive Stock Options may be granted only to employees of the Company and its Subsidiaries and Affiliates. To the extent that any Stock Option is not designated as an Incentive Stock Option or even if so designated does not qualify as an Incentive Stock Option, it shall constitute a Non-Qualified Stock Option.

Stock Options shall be evidenced by option agreements, the terms and provisions of which may differ. An option agreement shall indicate on its face whether it is intended to be an agreement for an Incentive Stock Option or a Non-Qualified Stock Option. The grant of a Stock Option shall occur on the date the Compensation Committee by resolution selects an individual to be a Participant in any grant of a Stock Option, determines the number of shares of Stock to be subject to such Stock Option to be granted to such individual and specifies the terms

and provisions of the Stock Option. The Company shall notify a Participant of any grant of a Stock Option, and a written option agreement or agreements shall be duly executed and delivered by the Company to the Participant. Such agreement or agreements shall become effective upon execution by the Participant.

Anything in the Plan to the contrary notwithstanding, no term of the Plan relating to Incentive Stock Options shall be interpreted, amended or altered nor shall any discretion or authority granted under the Plan be exercised so as to disqualify the Plan under Section 422 of the Code or, without the consent of the optionee affected, to disqualify any Incentive Stock Option under such Section 422 of the Code.

Stock Options granted under the Plan shall be subject to the following terms and conditions and shall contain such additional terms and conditions as the Compensation Committee shall deem desirable:

(i) Option Price. The option price per share of Common Stock purchasable under a Stock Option (A) shall be determined by the Compensation Committee and set forth in the option agreement, (B) shall not be less than the Fair Market Value of the Common Stock subject to the Stock Option on the Date of Grant and (C) in the case of an Incentive Stock Option granted to an optionee who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any subsidiary of the Company, shall not be less than 110% of the Fair Market Value of the Common Stock subject to the Incentive Stock Option on the Date of Grant.

(ii) Option Term. The term of each Stock Option shall be fixed by the Compensation Committee, but (A) no Stock Option shall be exercisable more than 10 years after the date the Stock Option is granted and (B) no Incentive Stock Option granted to an optionee who owns stock representing more than 10% of the voting power of all classes of stock of the Company or any Subsidiary shall be exercisable more than five years after the date the Stock Option is granted.

(iii) Exercisability. Except as otherwise provided herein, Stock Options shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Compensation Committee. If the Compensation Committee provides that any Stock Option is exercisable only in installments, the Compensation Committee may at any time waive such installment exercise provisions, in whole or in part, based on such factors as the Compensation Committee may determine. In addition, the Compensation Committee may at any time, in whole or in part, accelerate the exercisability of any Stock Option.

Notwithstanding any other provision hereof, the aggregate Fair Market Value, determined on the date of award, of Common Stock with respect to which Incentive Stock Options are exercisable by an optionee for the first time during any calendar year under all stock option plans of the Company and any Subsidiary of the Company shall not exceed $100,000.

(iv) Method of Exercise. Subject to the provisions of this Section 5(a), Stock Options may be exercised, in whole or in part, at any time during the option term by giving

written notice of exercise to the Company specifying the number of shares of Common Stock subject to the Stock Option to be purchased.

The option price of Common Stock to be purchased upon exercise of any Option shall be paid in full in cash (by certified or bank check, or such other instrument as the Company may accept) or, if and to the extent set forth in the option agreement, may also be paid by one or more of the following: (A) in the case of the exercise of a Non-Qualified Stock Option, in the form of unrestricted Common Stock already owned by the optionee that meets the definition of “Mature Stock”, as defined below, based in any such instance on the Fair Market Value of the Common Stock on the date the Stock Option is exercised; provided, however, that, in the case of an Incentive Stock Option, the right to make a payment in the form of already owned shares of Common Stock may be authorized only at the time the Stock Option is granted; (B) by requesting the Company to withhold from the number of shares of Common Stock otherwise issuable upon exercise of the Stock Option that number of shares having an aggregate Fair Market Value on the date of exercise equal to the exercise price for all of the shares of Common Stock subject to such exercise; or (C) by a combination thereof, in each case in the manner provided in the option agreement.

As noted above, the option price may be paid in shares of Common Stock owned by the optionee upon the exercise of a Stock Option provided the shares of Common Stock so utilized meet the definition of “Mature Stock”. For purposes hereof, the term “Mature Stock” shall mean (I) shares of unrestricted Common Stock that have been owned by the optionee for at least six (6) consecutive months prior to the date of the exercise of the Stock Option wherein such shares at to be utilized to pay all or a portion of the Option Price; or (II) shares of unrestricted Common Stock that were purchased by the optionee in an open-market transaction prior to the exercise of the Stock Options wherein such shares are to be utilized to pay all or a portion of the Option Price.

In the discretion of the Compensation Committee and to the extent allowed under applicable law, payment for any shares subject to a Stock Option may also be made by delivering a properly executed exercise notice to the Company, together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of funds to pay the purchase price.

(v) Transferability of Stock Options. No Stock Option shall be transferable by the optionee other than (A) by will or by the laws of descent and distribution or (B) pursuant to a qualified domestic relations order (as defined in the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or the rules thereunder) or (C) by a gift to a “family member”, as herein defined. All Stock Options shall be exercisable, during the optionee’s lifetime, only by the optionee or by the guardian or legal representative of the optionee or by an alternate payee pursuant to such qualified domestic relations order or by the “family member” who is the donee of a gift, it being understood that the terms “holder” and “optionee” include the guardian, legal representative or family member donee of the optionee named in the option agreement and any person to whom an option is transferred by will or the laws of descent and distribution, pursuant to a qualified domestic relations order or pursuant to a gift to a “family member”. For purposes of this Plan, the term “family member” as relates to the

optionee means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, including adoptive relationships, any person sharing the optionee’s household (other than a tenant or employee), a trust in which these persons (or the optionee) control the management of the assets and any other entity in which these persons (or the optionee) own more than fifty percent of the voting interests. No Stock Option may be transferred for value except for (I) transfers under a qualified domestic relations order in settlement of marital property rights; and (II) a transfer to an entity in which more than fifty percent of the voting interests are owned by “family members” (or the optionee) in exchange for an interest in that entity. Notwithstanding the above definition of “family member” and prohibitions on transfers and exceptions thereto, the definition of “family member” and the prohibitions and exceptions to transfers shall be subject to the definitions thereof and restrictions set forth on Form S-8 Registration Statement Under the Securities Act of 1933 as such definitions and restrictions shall be revised, amended or replaced from time to time.

(vi) Termination by Death. If an optionee’s employment terminates by reason of death, any Stock Option held by such optionee may thereafter be exercised, to the extent then exercisable, or on such accelerated basis as the Compensation Committee may determine, for a period of one year (or such other period as the Compensation Committee may specify in the option agreement) from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment due to death, if an Incentive Stock option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.

(vii) Termination by Reason of Disability. If an optionee’s employment terminates by reason of Disability, any Stock Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of termination, or on such accelerated basis as the Compensation Committee may determine, for a period of three years (or such shorter period as the Compensation Committee may specify in the option agreement) from the date of such termination of employment or until the expiration of the stated term of such Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such three-year period (or such shorter period), any unexercised Stock Option held by such optionee shall, notwithstanding the expiration of such three-year (or such shorter) period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Disability, if an Incentive Stock Option is exercised after the expiration of the exercise periods that apply for purposes of Section 422 of the Code, such Stock Option will thereafter be treated as a Non-Qualified Stock Option.

(viii) Termination by Reason of Retirement. If an optionee’s employment terminates by reason of Retirement, any Non-Qualified Stock Option held by such optionee may thereafter be exercised by the optionee, to the extent it was exercisable at the time of such Retirement or on such accelerated basis as the Compensation Committee may determine, for a period of three years (or such shorter period as the Compensation Committee may specify in the

option agreement) from the date of such termination of employment or until the expiration of the stated term of such Non-Qualified Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such three-year (or such shorter) period, any unexercised Non-Qualified Stock Option held by such optionee shall, notwithstanding the expiration of such three-year (or such shorter) period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year-from the date of such death or until the expiration of the stated term of such Non-Qualified Stock Option, whichever period is the shorter. In the event of termination of employment by reason of Retirement, an Incentive Stock Option may be exercised by the optionee to the extent it was exercisable at the time of such Retirement or on such accelerated basis as the Compensation Committee may determine, only within a period of three months thereafter or prior to the expiration of the stated term of such Incentive Stock Option, whichever period is the shorter; provided, however, that if the optionee dies within such three-month period, any unexercised Incentive Stock Option held by such optionee shall, notwithstanding the expiration of such three-month period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or until the expiration of the stated term of such Incentive Stock Option, whichever period is the shorter.

(ix) Other Termination. Unless otherwise determined by the Compensation Committee, if there occurs a Termination of Employment for any reason other than death, Disability, Retirement or Cause, any Stock Option held by such optionee shall thereupon terminate, except that such Stock Option, to the extent then exercisable, or on such accelerated basis as the Compensation Committee may determine, may, if such Termination of Employment is without Cause, be exercised for the lesser of (A) in the case of a Non-Qualified Stock Option, one year from the date of such Termination of Employment or the balance of such Stock Option’s term and (B) in the case of an Incentive Stock Option, three months from the date of such Termination of Employment or the balance of such Stock Option’s term; provided, however, that if the optionee dies within such one-year or three-month period, any unexercised Stock Option held by such optionee shall notwithstanding the expiration of such one-year or three-month period, continue to be exercisable to the extent to which it was exercisable at the time of death for a period of one year from the date of such death or until the expiration of the stated term of such Stock Option, whichever period is the shorter. In the event of Termination of Employment for Cause, any unexercised Stock Option held by such optionee shall expire immediately upon the giving to the optionee of notice of such Termination of Employment. Unless otherwise determined by the Compensation Committee, for the purposes of the Plan, “Cause” shall mean (I) the conviction of the optionee for a felony under Federal law or the law of the state in action occurred, (II) dishonesty in the course of the optionee’s employment duties or (III) willful and failure on the part of the optionee to perform his duties in any material respect.

(x) Cashing Out of Stock Option. On receipt of written notice of exercise and subject to confirmation of applicable accounting implications, the Compensation Committee may elect to cash out all or any part of the shares of Common Stock for which a Stock Option is being exercised by paying the optionee an amount, in cash or Common Stock, equal to the excess of the Fair Market Value of the Common Stock over the option price times the number of shares of

Common Stock for which the Stock Option is being exercised on the effective date of such cash out.

(xi) Corporate Event Cash Out. The provisions of Section 8 below shall be applicable in the event of a Corporate Event as defined therein.

(b) Stock Awards. Subject to the terms of this Plan, the Compensation Committee may grant Awards to individuals in the form of shares of Common Stock of the Company and may place restrictions on such Awards as set forth in Section 6 below or may grant such shares of Common Stock without restrictions.

SECTION 6. Restricted Stock.

(a) Administration. Restricted Stock may be awarded either alone, in addition to or in tandem with other Awards granted under the Plan. The Compensation Committee shall determine the eligible persons to whom and the time or times at which Restricted Stock shall be awarded, the number of shares of Restricted Stock to be awarded, the number of shares of Restricted Stock to be awarded to any person, the duration of the period (the “Restrictions Period”) during which, and the conditions under which receipt of the Common Stock will be Restricted, and the other terms and conditions of the Award in addition to those set forth in Section 6(b).

The Compensation Committee may condition the grant of Restricted Stock upon the attainment of specified performance goals or such other factors or criteria as the Compensation Committee shall determine, in its sole discretion.

The provisions of Restricted Stock awards need not be the same with respect to each recipient.

(b) Terms and Conditions. The shares of Restricted Stock awarded pursuant to this Section 6 may, in the sole discretion of the Compensation Committee, be subject to any of the following terms and conditions:

(i) Subject to the provisions of this Plan and the Award agreement referred to in Section 6(b)(v) below, Restricted Stock Awards may not be sold, assigned, transferred, pledged or otherwise encumbered during the Restrictions Period and a legend evidencing such restrictions shall, at the request of the Company or the Compensation Committee and upon such language as the Company or the Compensation Committee shall require, be inserted on any stock certificate evidencing shares received under a Restricted Stock Award. At the expiration of the Restrictions Period if such Participant has previously received stock certificates with the above-referenced legend thereon with respect to the referenced Restricted Stock Award, certificates for shares of Common Stock without such legend shall, within a reasonable time following the request of the Participant or his or her legal representative, be delivered to the Participant or his or her legal representative, by the Company’s transfer agent in a number equal to the shares represented by the stock certificates previously received by such Participant with respect to the referenced Restricted Stock Award.

If the Participant has not received certificates representing his or her Restricted Stock Award by the end of the Restrictions Period, the Company shall, within a reasonable time following the request of the Participant or his or her legal representative, cause the Company’s transfer agent to deliver to the Participant or his or her legal representative stock certificates, without the above-referenced legend appearing thereon, in a number equal to the number of shares with respect to the referenced Restricted Stock Award.

(ii) Unless otherwise determined by the Compensation Committee at grant, amounts equal to any dividends declared during the Restrictions Period with respect to the number of shares covered by a Restricted Stock Award will be paid to the Participant currently, or deferred and deemed to be reinvested in additional Restricted Stock, or otherwise reinvested, all as determined at or after the time of the Award by the Compensation Committee or, if the Compensation Committee determines to allow the Participant to make the election, at the election of the Participant.

(iii) Subject to the provisions of the Award agreement and this Section 6, upon termination of a Participant’s employment with the Company and any Subsidiary or Affiliate for any reason during the Restrictions Period for a given Award, the Restricted Stock in question will vest, or be forfeited, in accordance with the terms and conditions established by the Compensation Committee at grant.

(iv) The Compensation Committee may, at or after grant, accelerate the vesting of all or any part of any Restricted Stock Award and/or waive the deferral limitations for all or any part of such Award.

(v) Each Restricted Stock Award shall be confirmed by, and subject to the terms of, a Restricted Stock agreement executed by the Company and the Participant.

(c) Limitations and Additional Restrictions Applicable to Restricted Stock Awards. Notwithstanding the provisions of this Section 6, any awards of Restricted Stock under this Plan shall be subject to the provisions of Section 14 below.

SECTION 7. Other Stock-Based Awards

Subject to all other applicable provisions of this Plan, including but not limited to the provisions of Section 9 and Section 14 below, the Compensation Committee may grant any other cash, stock or stock-related Awards to any eligible individual under this Plan that the Compensation Committee deems appropriate, including, but not limited to, stock appreciation rights, limited stock appreciation rights, phantom stock Awards, the bargain purchase of Stock and Stock bonuses. Any such benefits and any related agreements shall contain such terms and conditions as the Compensation Committee deems appropriate including, but not limited to the right to settle any stock appreciation right by use of Common Stock. Such Awards and agreements need not be identical. The Compensation Committee may provide a stock option deferral program or similar types of plans designed to provide further deferral of taxable income to Participants including the use of unfunded deferred compensation arrangements that may

provide for future payments to Participants in the form of Common Stock or cash provided such programs or plans do not include re-pricing of Stock Options, and such programs or plans shall be subject to the provisions of this Plan, including but not limited to the provisions of Section 9 and Section 14 below. With respect to any benefit under which shares of Stock are or may in the future be issued for consideration other than prior services, the amount of such consideration shall not be less than the amount (such as the par value of such shares) required to be received by the Company in order to comply with applicable state law.

SECTION 8. Changes in Company’s Capital Structure.

(a) Corporate Events. Notwithstanding the above, in the event of any of the following:

(i) The Company is merged or consolidated with another corporation or entity;

(ii) All or substantially all of the assets of the Company or the Common Stock are acquired by another person or entity;

(iii) The reorganization or liquidation of the Company; or

(iv) The Company shall enter into a written agreement to undergo an event described in clauses (i), (ii) or (iii) above,

(each (i), (ii), (iii) and (iv) above, a “Corporate Event”) then, the Company shall require the successor corporation or parent thereof to assume such outstanding Awards; provided, however, the Company or the Compensation Committee may, in lieu of requiring such assumption, provide that all outstanding Awards shall terminate as of the consummation of such Corporate Event, and (x) accelerate the exercisability of, or cause all vesting restrictions to lapse on, all outstanding Awards to a date at least ten days prior to the date of such Corporate Event and/or (y) provide that holders of Awards will receive a cash payment in respect of cancellation of their Awards based on the amount (if any) by which the per share consideration being paid for the Stock in connection with such Corporate Event exceeds the applicable exercise price.

For purposes of this Section 8, an Award shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Event, each holder of an Award would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of shares of Stock covered by the Award at such time; provided, that if such consideration received in the transaction is not solely equity securities of the successor entity, the Company or the Compensation Committee may, with the consent of the successor entity, provide for the consideration to be received upon exercise of the Award to be solely equity securities of the successor entity equal to the Fair Market Value of the per share consideration received by holders of Stock in the Corporate Event.

(b) Effect of Change in Control. Except to the extent reflected in a particular Award agreement or as determined by the Company or the Compensation Committee, in the event of a Change in Control, notwithstanding any vesting schedule with respect to an Award of Options or Restricted Stock, such Option shall become immediately exercisable with respect to 100% of the shares subject to such Option, and the Restrictions Period shall expire immediately with respect to 100% of such shares of Restricted Stock. In the event of a Change in Control, all other Awards shall become fully vested and or payable to the fullest extent of any Award or portion thereof that has not then expired and any restrictions with respect thereto shall expire. The Company and the Compensation Committee shall have full authority and discretion to interpret this Section 8(b) and to implement any course of action with respect to any Award so as to satisfy the intent of this provision. The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

SECTION 9. Term, Amendment and Termination.

The Plan will terminate on May 5, 2013. Under the Plan, Awards outstanding as of May 5, 2013 shall not be affected or impaired by the termination of the Plan.

The Board may not amend, alter or discontinue the Plan or an Award in such manner so as to impair the rights of an optionee under a Stock Option or a recipient of a Restricted Stock Award theretofore granted without the optionee’s or recipient’s consent except such an amendment made to cause the Award to qualify for the exemption provided by Rule 16b-3. If any proposed amendment to the Plan would (i) materially increase the benefits accruing to Participants under the Plan, (ii) materially increase the aggregate number of securities that may be issued under the Plan or (iii) materially reduce the requirements as to eligibility for participation in the Plan, then to the extent required by applicable law or deemed necessary or advisable by the Compensation Committee, such amendment shall be presented to the Company’s stockholders for approval. Notwithstanding the foregoing, however, the requirement that any such amendments to the Plan be presented to the Company's stockholders for approval shall not apply to such amendments as required by applicable law or to cause the Plan to comply with generally accepted accounting principles.

Subject to the above provisions, the Board shall have authority to amend the Plan to take into account changes in law and tax and accounting rules, as well as other developments and to grant Awards which qualify for beneficial treatment under such rules without stockholder approval. Notwithstanding the above provisions, any changes or adjustments as described in Section 3(b) above may be made without stockholder approval.

SECTION 10. Unfunded Status of Plan.

It is presently intended that the Plan constitute an “unfunded” plan for incentive and deferred compensation. The Compensation Committee may authorize the creation of trusts

or other arrangements to meet the obligations created under the Plan to deliver Common Stock or make payments; provided, however, that, unless the Compensation Committee otherwise determines, the existence of such trusts or other arrangements is consistent with the “unfunded” status of the Plan. No provision of the Plan shall require the Company, for the purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company maintain separate bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Holders shall have no rights under the Plan other than as unsecured general creditors of the Company, except that insofar as they may have become entitled to payment of additional compensation by performance of services, they shall have the same rights as other employees under general law.

SECTION 11. General Provisions.

(a) Additional Provisions of an Award. The Compensation Committee may require each person purchasing or receiving shares pursuant to an Award to represent to and agree with the Company in writing that such person is acquiring the shares without a view to the distribution thereof. The certificates for such shares may include any legend which the Compensation Committee deems appropriate to reflect any restrictions on transfer. All certificates for shares of Common Stock or other securities delivered under the Plan shall be subject to such stock transfer orders and other restrictions as the Compensation Committee may deem advisable under the rules, regulations and other requirements of the Commission, any stock exchange upon which the Common Stock is then listed and any applicable Federal or state securities law, and the Compensation Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

(b) Privileges of Stock Ownership. Except as otherwise provided in this Plan, no person shall be entitled to the privileges of stock ownership in respect of shares of Common Stock which are subject to Awards hereunder until such shares shall have been issued to such person.

(c) Government and Other Regulations. The obligation of the Company to make payment of Awards in Stock or otherwise shall be subject to all applicable laws, rules and regulations, and to such approvals by governmental agencies as may be required. Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell and shall be prohibited from offering to sell or selling any shares of Stock pursuant to an Award unless such shares have been properly registered for sale pursuant to the Securities Act with the Securities and Exchange Commission or unless the Company has received an opinion of counsel, satisfactory to the Company, that such shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with. The Company shall be under no obligation to register for sale under the Securities Act any of the shares of Stock to be offered or sold under the Plan. If the shares of Stock offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Act, the Company may restrict the transfer of such shares and may legend the Stock

certificates representing such shares in such manner as it deems advisable to ensure the availability of any such exemption.

(d) No Restriction on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting other or additional compensation arrangements for its employees.

(e) No Employment Right or Claim. The adoption of the Plan shall not confer upon any employee any right to continued employment nor shall it interfere in any way with the right of the Company or any Subsidiary or Affiliate to terminate the employment of any employee at any time. No individual shall have any claim or right to be granted an Award under the Plan, or, having been selected for the grant of an Award, to be selected for the grant of any other Award.

(f) Tax Withholding. No later than the date as of which an amount first becomes subject to being included in the gross income of the Participant for Federal income tax purposes with respect to any Award under the Plan, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, any Federal, state, local or foreign taxes of any kind required by law to be withheld with respect to such amount. If so determined by the Compensation Committee, withholding obligations may be settled with Common Stock, including Common Stock that is part of the Award that gives rise to the withholding requirement. The obligations of the Company under the Plan shall be conditional on such payment or arrangements, and the Company, its Subsidiaries and its Affiliates shall, to the extent permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant. The Compensation Committee may establish such procedures as it deems appropriate, including the making of irrevocable elections, for the settlement of withholding obligations with Common Stock.

(g) Payments to Persons Other Than Participants. If any person to whom any amount is payable under the Plan is unable to care for his affairs because of illness or accident, or is a minor, or has died, then any payment due to such person or his estate (unless a prior claim therefor has been made by a duly appointed legal representative) may, if the Compensation Committee so directs the Company, be paid to his spouse, child, relative, an institution maintaining or having custody of such person, or any other person deemed by the Compensation Committee to be a proper recipient on behalf of such person otherwise entitled to payment. Any such payment shall be a complete discharge of the liability of the Company therefor.

(h) No Liability of Compensation Committee Members. No member of the Compensation Committee shall be personally liable by reason of any contract or other instrument executed by such member or on his behalf in his capacity as a member of the Compensation Committee nor for any mistake of judgment made in good faith, and the Company shall indemnify and hold harmless each member of the Compensation Committee and each other employee, officer or director of the Company to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against any cost or expense (including counsel fees) or liability (including any sum paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan unless arising out of such

person's own fraud or willful bad faith; provided, however, that approval of the Board shall be required for the payment of any amount in settlement of a claim against any such person. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company's Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

(i) Reliance on Reports. Each member of the Compensation Committee and each member of the Board shall be fully justified in relying, acting or failing to act, and shall not be liable for having so relied, acted or failed to act in good faith, upon any report made by the independent public accountant of the Company and its Subsidiaries and upon any other information furnished in connection with the Plan by any person or persons other than himself.

(j) Relationship to Other Benefits. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Subsidiary except as otherwise specifically provided in such other plan.

(k) Expenses. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

(l) Pronouns. Masculine pronouns and other words of masculine gender shall refer to both men and women.

(m) Titles and Headings. The titles and headings of the sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

(n) Termination of Employment. For all purposes herein, a person who transfers from employment or service with the Company to employment or service with a Subsidiary or vice versa shall not be deemed to have terminated employment or service with the Company or a Subsidiary.

(o) Other Procedures. The Compensation Committee shall establish such procedures as it deems appropriate for a Participant to designate a beneficiary to whom any amounts payable in the event of the Participant’s death are to be paid.

(p) Governing Law. The Plan and all Awards made and actions taken thereunder shall be governed by and construed in accordance with the laws of the State of Delaware.

SECTION 12. Effective Date of Plan.

Provided the Plan is approved by the Company’s stockholders, the Plan shall be effective on May 5, 2003, the date the Plan was submitted to the Company’s stockholders for vote.

SECTION 13. Non-Employee Director Stock Options and Non-Employee Director Shares.

(a) Each director of the Company who is not otherwise an employee of the Company or any Subsidiary or Affiliate from and after the effective date of the Plan (a “Non-Employee Director”) shall, on each December 31 during such Non-Employee Director’s term, automatically be granted, either, in the discretion of the Compensation Committee,

(i) Non-Qualified Stock Options to purchase 1,000 shares of Common Stock having an exercise price per share equal to 100% of the Fair Market value of the Common Stock at the Date of Grant of such Non-Qualified Stock Option or

(ii) Non-Employee Director Shares, as defined below, in an amount not to exceed 1,000 shares of Non-Employee Director Shares per grant per year.

Each such Non-Employee Director, upon joining the Board, shall also be awarded 1,000 shares of Common Stock (such initial grant of Common Stock and shares of Common Stock awarded pursuant to Subsection (ii) of this Section 13 are herein referred to as “Non-Employee Director Shares”). Non-Employee Director Shares shall be fully vested upon grant, but may not be sold, pledged, or otherwise transferred in any manner during a Non-Employee Director’s term and for one year thereafter; provided, however, that in the event of the death or Disability of a Non-Employee Director, all transfer restrictions concerning such Non-Employee Director Shares shall immediately be removed, and such shares shall thereupon be freely transferrable by the Non-Employee Director or by his or her estate or legal representative, as applicable. The Compensation Committee may require that such shares bear an appropriate legend evidencing such transfer restrictions. The Compensation Committee may determine to grant the Awards set forth above on January 1 of a year in lieu of December 31.

(b) An automatic Non-Employee Director Stock Option or award of additional Non-Employee Director Shares shall be granted hereunder only if as of each Date of Grant (or, in the case of any initial grant, from and after the effective date of the Plan) the Non-Employee Director (i) is not otherwise an employee of the Company or any Subsidiary or Affiliate, (ii) has not been an employee of the Company or any Subsidiary or Affiliate for any part of the preceding fiscal year and (iii) has served on the Board continuously since the commencement of his term.

(c) Each holder of a Stock Option granted pursuant to this Section 13 shall also have the rights specified in Section 5(a).

(d) In the event that the number of shares of Common Stock available for future grant under the Plan is insufficient to make all automatic grants required to be made on such date, then all Non-Employee Directors entitled to a grant on such date shall share ratably in the number of options on shares available for grant under the Plan and/or shall share ratably in the number of shares available for grant under the Plan.

(e) Except as expressly provided in this Section 13, any Stock Option granted hereunder shall be subject to the terms and conditions of the Plan as if the grant were made pursuant to Section 5(a) hereof.

(f) Awards granted under this Section 13 shall be subject to any applicable restrictions set forth in Section 14(a) below.

SECTION 14. Award Limitations.

(a) General Restriction. Any provision of this Plan to the contrary notwithstanding, in no event shall any Awards or Award of Non-Employee Director Shares be made, and in no event shall any option be granted or exercised, if the grant or exercise of such Award or Option, would result in a violation of the Common Stock ownership limits or any other requirements necessary for qualification of the Company as a “real estate investment trust” for federal income tax purposes. For purposes of the Plan, in determining whether such limits would be violated, Participants shall be deemed to own beneficially any shares of Common Stock subject to unexercised Options, whether or not vested. Any such Award or grant or exercise of Options, if made, shall be null and void and shall have no legal effect. In addition, the Plan and any Awards or Options granted hereunder shall be subject in all events to, and shall in no event violate (i) the “Ownership Limit” as set forth in the Company’s Amended and Restated Certificate of Incorporation, (ii) the provisions of any applicable rule or regulation of the Securities and Exchange Commission, the New York Stock Exchange and/or such other exchange upon which the Company’s stock may be traded or (iii) any provision of any federal or state law, rule or regulation.

(b) Restrictions on Stock Awards. Stock Awards granted from the Plan must be subject to the following guidelines:

(i)	Stock Awards may be granted from the Plan in lieu of cash compensation; and

(ii)

Except for Stock Awards falling within the 5% Authorization (defined below), Stock Awards that are granted from the Plan other than in lieu of cash compensation (A) pursuant to a stock award program or (B) independently, must provide for a vesting period of a minimum of three (3) years or may provide for a vesting period of less than three (3) years but at least one (1) year if the restrictions period placed upon the Stock Award is performance based.

Up to a maximum of Stock Awards equivalent to 5% of the total shares available for grant under the Plan as set forth in the first sentence of Section 3(a) above (the “5% Authorization”), Stock Awards may be granted to officers and employees of the Company other than in lieu of cash compensation and without the necessity of compliance with the vesting or performance based criteria set forth directly above.

EX-10.15.3 3 exhibit10153.htm EXHIBIT 10.15.3 exhibit10153.htm

Exhibit 10.15.3

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 May 15, 2009, among the undersigned Borrower and Bank.)

THIS AMENDED AND RESTATED LOAN AGREEMENT ("Loan Agreement") is made as of July 29, 2010, by and between CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership, whose address is CBL Center, Suite 500, 2030 Hamilton Place Boulevard, Chattanooga, Tennessee 37421-6000 ("Borrower") and FIRST TENNESSEE BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the statutes of the United States of America, with a principal office at 701 Market Street, Chattanooga, Tennessee 37402 (hereinafter referred to as the "Bank").

Recitals of Fact

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

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

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

AGREEMENTS

SECTION 1: DEFINITIONS AND ACCOUNTING TERMS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Capitalized Lease Obligation" means obligations under a lease (to pay rent or other amounts under any lease or other arrangement conveying the right to use) that are required to be capitalized for financial reporting purposes in accordance with GAAP. The amount of a Capitalized Lease Obligation is the capitalized amount of such obligation determined in accordance with GAAP.

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

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

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

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

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

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

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

"Credit Agreement" means the Seventh Amended and Restated Credit Agreement dated as of September 28, 2009 among Borrower, Wells Fargo and others, as amended from time to time.

"Debt Service" means, with respect to a Person and for a given period, the sum of the following: (a) such Person’s Interest Expense for such period; (b) regularly scheduled principal payments on Indebtedness of such Person made during such period, other than any balloon,

bullet or similar principal payment payable on any Indebtedness of such Person which repays such Indebtedness in full; and (c) such Person’s Ownership Share of the amount of any payments of the type described in the immediately preceding clause (b) of Unconsolidated Affiliates of such Person.

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

"Defaulting Lender" means any Lender that shall fail or refuse to perform any of its obligations under this Agreement or any other Loan Document to which it is a party within the time period specified for performance of such obligation or, if no time period is specified, if such failure or refusal continues for a period of five (5) Business Days after notice from the Bank.

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

"Derivatives Termination Value" means, in respect of any one or more Derivatives Contracts, after taking into account the effect of any legally enforceable netting agreement or provision relating thereto, (a) for any date on or after the date such Derivatives Contracts have been terminated or closed out, the termination amount or value determined in accordance therewith, and (b) for any date prior to the date such Derivatives Contracts have been terminated or closed out, the then-current mark-to-market value for such Derivatives Contracts, determined based upon one or more mid-market quotations or estimates provided by any recognized dealer in Derivatives Contracts (which may include the Administrative Agent, any Lender, any Specified Derivatives Provider or any Affiliate of any thereof).

"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 non-controlling interest in Subsidiaries of the Borrower for such period);

(b) interest expense for such period (less interest expense allocable to non-controlling interest in Subsidiaries of the Borrower for such period);

(d) (i) extraordinary and non-recurring net gains or losses (other than gains or losses from the sale of outparcels of Properties), except as otherwise provided in

clause (d)(ii) below) for such period;

(ii) gains or losses from the sale of outparcels and non-operating Properties for such period (provided however, that the gains or losses from such sales of outparcels and non-operating Properties may not exceed five percent (5%) of EBITDA calculated prior to taking such gains or losses into account); and

(iii) expense relating to the extinguishment 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.

"Effective Date" means the date the Credit Agreement became effective.

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

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

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

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

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

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

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

(a) Adjusted Asset Value at such time;

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

(c) with respect to any Property which is under construction or the development of which was completed during any of the four (4) fiscal quarters most recently ended, the book value of construction in process as determined in accordance with GAAP for all such Properties at such time (including without duplication Parent’s Ownership Share of all construction in process of Unconsolidated Affiliates of Parent);

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

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

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

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

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

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

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

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

(z) the value of any such real property shall only be included in Gross AssetValue if the organizational documents of such JV provide that if, and to the extent, suchIndebtedness is paid by Borrower or a Subsidiary of Borrower or by resort to suchreal property, then Borrower or a Subsidiary of Borrower shall automatically acquire, without the necessity of any further payment or action, all Equity Interests in such JV not owned by Borrower or any Subsidiary.

"Guaranty", "Guaranteed" or to "Guarantee" as applied to any obligation means and includes (a) a guaranty (other than by endorsement of negotiable instruments for collection in the ordinary course of business), directly or indirectly, in any manner, of any part or all of such obligation, or (b) an agreement, direct or indirect, contingent or otherwise, and whether or not

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

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

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

(a)	all obligations of such Person in respect of money borrowed;

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

(c)	represented by notes payable, or drafts accepted, in each case representing extensions of credit (but only to the extent of any outstanding balance),

(d)	evidenced by bonds, debentures, notes or similar instruments (but only to the extent such debt is not otherwise included in Indebtedness), or

(e)	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;

(f)	Capitalized Lease Obligations of such Person;

(g)	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);

(h)	all Off-Balance Sheet Obligations of such Person;

(i)

all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest issued after the Effective Date by such Person or any other Person, valued at the greater or its voluntary or involuntary liquidation preference plus accrued and unpaid dividends;

(j)	net obligations under any Derivative Contract (which shall be deemed to have an amount equal to the Derivatives Termination Value thereof at such time but in no event shall be less than zero); and

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

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

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

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

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

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

"Lender" means each financial institution from time to time party hereto as a "Lender", together with its respective successors and permitted assigns; provided, however, that the term "Lender", except as otherwise expressly provided herein, shall not include any Lender (or its Affiliates) in its capacity as a Specified Derivatives Provider. With respect to matters requiring the consent or approval of all Lenders at any given time, all then existing Defaulting Lenders will be disregarded and excluded, and, for voting purposes only, "all Lenders" shall be deemed to mean "all Lenders other than Defaulting Lenders".

"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" has the same meaning as used in the Note.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

"Off-Balance Sheet Obligations" 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 Item 303(a)(4)(ii) of Regulation S-K promulgated under the Securities Act) 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 is required to file with the Securities and Exchange Commission (or any Governmental Authority substituted therefor).

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

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

"Participant" means each of the following to the extent each of the following owns an interest in the Loan pursuant to the Participation Agreement: Compass Bank, Regions Bank, Branch Banking and Trust Company and Manufacturers and Traders Trust Company, their respective successors and assigns, and any other participants in the Loan.

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

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

"Participant's Proportionate Share (M&T)" means Manufacturers and Traders Trust Company (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Twenty Five Million and NO/100 Dollars ($25,000,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00).

"Participant's Proportionate Share (Regions)" means Regions Bank’s (or any successor to such bank's interest in the Loan) undivided participating interest in the Loan and the letters of credit issued hereunder which, as of the date of this Loan Agreement, shall be equal to Twenty Two Million Five Hundred Thousand and NO/100 Dollars ($22,500,000.00) divided by One Hundred Five Million Dollars ($105,000,000.00) until June 1, 2011.

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

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

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

"Permitted Encumbrances" shall mean and include:

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

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

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

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

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

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

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

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

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

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

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

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

“Restricted Payment” means any of the following:

(a) any dividend or other distribution, direct or indirect, on account of any shares of any class of stock or other Equity Interest of Parent or any of its Subsidiaries now or hereafter outstanding, except a dividend payable solely in shares of that class of stock or other Equity Interest to the holders of that class;

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

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

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

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

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

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

"Specified Derivatives Provider" means any Lender, or any Affiliate of a Lender that is a party to a Derivatives Contract at the time the Derivatives Contract is entered into.

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

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

"Tangible Net Worth" means, as of a given date, the stockholders’ equity of Parent and its Subsidiaries determined on a consolidated basis plus (x) increases in accumulated depreciation accrued after September 30, 2002 and (y) minority interests in Borrower minus (to the extent reflected in determining stockholders’ equity of Parent and its Subsidiaries): (a) the

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

"Termination Date of Revolving Credit Loan" shall mean the earlier of (a) June 1, 2012, or in the event that Bank and Borrower shall hereafter mutually agree in writing that the Revolving Credit Loan and Bank's commitment hereunder shall be extended to another date, such other date mutually agreed upon between Bank and Borrower to which Bank's commitment shall have been extended, or (b) the date as of which Borrower shall have terminated Bank's commitment under the provisions of Section 2.5 hereof.

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

(a) all letter of credits of such Person;

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

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

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

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

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

For purposes of this definition:

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

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

(ii) in support of permanent loan commitments, in lieu of a deposit;

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

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

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

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

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

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

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

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

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

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

2.1 The Commitment. Subject to the terms and conditions herein set out, Bank agrees and commits to make loan advances to and issue letters of credit for the account of Borrower from time to time, from the Closing Date until the Termination Date of Revolving Credit Loan, in an aggregate principal amount of the loan advances and the face amount of any letters of credit not to exceed, at any one time outstanding, the lesser of (a) One Hundred Five Million Dollars ($105,000,000.00), (b) Borrower's Borrowing Base, as defined in Section 1; or

(c) the Permanent Loan Estimate; provided however, notwithstanding anything contain in the Loan Documents elsewhere to the contrary, the parties acknowledge that the amount shown in (a) above will decrease on June 1, 2011 to Eighty Two Million Five Hundred Thousand Dollars ($82,500,000.00) and be shared among the participating lenders (excluding Regions Bank) and will remain at that level until a replacement participating lender is found to replace Regions Bank at its current level of participation in the Loan.

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

2.3 The Note and Interest. The Revolving Credit Loan shall be evidenced by one (1) promissory note of Borrower payable to the order of Bank in the aggregate principal amount of One Hundred Five Million Dollars ($105,000,000.00), in form substantially the same as the copy of the Note, attached hereto as Exhibit "C." The entire principal amount of the Loan shall be due and payable on the Termination Date of Revolving Credit Loan. The unpaid principal balances of the Revolving Credit Loan shall bear interest from the Closing Date on disbursed and unpaid principal balances (calculated on the basis of a year of 365 or 366 days as is appropriate) at a rate per annum as specified in the Note. Said interest shall be payable monthly on the fifth (5th) day of each month after the Closing Date. Bank shall mail to Borrower a billing notice at least ten (10) days prior thereto setting forth the payment amount next due, but any failure to send such notice shall not relieve Borrower of the obligation to pay accrued interest. The final installment of interest, together with the entire outstanding principal balance of the Revolving Credit Loan, shall be due and payable on the Termination Date of Revolving Credit Loan. The first selection of the one (1) month, three (3) months, six (6) months or LIBOR Rate shall be made by Borrower on or prior to the date of the Note and each selection thereafter shall be made at least twenty four (24) hours prior to the end of the then applicable interest rate period. Borrower may not ever select a rate period which exceeds the Termination Date of the Revolving Credit Loan. In the event funding at the LIBOR Rate is not available as a matter of law, funding to the extent allowed hereunder shall be at the Base Rate; however, the interest rate shall never be less than four and fifty hundredths percent (4.50%) per annum.)

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

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

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

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

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

2.7 Intentionally Deleted.

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

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

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

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

the One Hundred Five Million Dollars ($105,000,000.00) credit line limitation, thereafter permitting Borrower to obtain additional advances in the manner and to the extent provided under the terms of this Loan Agreement.

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

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

3.3 Payment on Non-Business Days. Whenever any payment of principal, interest or fees to be made on the indebtednesses evidenced by the Note shall fall due on a Saturday, Sunday or public holiday under the laws of the State of Tennessee, such payment shall be made on the next succeeding Business Day.

SECTION 4: CONDITIONS OF LENDING

4.1 Conditions Precedent to Closing and Funding Initial Advance. The obligation of Bank to fund the initial Revolving Credit Loan Advance after the date of this Loan Agreement is subject to the condition precedent that Bank shall have received, on or before the Closing Date, all of the following in form and substance satisfactory to Bank:

(a) This Loan Agreement.

(b) The Note.

(c) The CBL Mortgage, together with a title commitment from a title insurance company acceptable to 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 Bank, containing no exceptions which are unacceptable to Bank, and containing such endorsements as Bank may require.

(d) Current financial statements of Borrower in form satisfactory to 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 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 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 Bank shall so require, certified copies of the original insurance policies evidencing such insurance, all of which Bank acknowledges it has previously received.

(i) Environmental audits of the properties described in the CBL Mortgage, to the extent they have not been previously provided to Bank.

(j) Surveys of the College Square, Walnut Square and Shoppes at Hamilton Place 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 Bank and shall be accompanied by Bank's usual survey certificate.

(k) Copies of the appraisals of the real estate described in Exhibit "A" attached hereto.

(l) The Guaranty Agreement 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".

4.2 Conditions Precedent to All Revolving Credit Loan Advances. The obligation of Bank to make Revolving Credit Advances pursuant hereto (including the initial advance at the Closing Date) shall be subject to the following additional conditions precedent:

(a) Borrower shall have furnished to Bank, a written request stating the amount of Revolving Credit Advance requested together with the intended use of the advance.

(b) 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 Borrower, 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 ninety (90) days after each January 1 and within forty-five (45) days after each July 1, April 1 and October 1, Borrower shall furnish to 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 Bank, Borrower shall have furnished to Bank an updated and current title report with respect to the property or properties covered by any CBL Mortgage held by 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 Bank, no additional advances shall be made.

SECTION 5: REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants that:

5.1 Partnership/Limited Liability Company Status. 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. The Lakes Mall, LLC 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. The Lakes Mall, LLC is a wholly owned subsidiary of Borrower. Walnut Square Associate Limited Partnership is a wholly owned subsidiary of Borrower. CBL Morristown, Ltd. is a wholly owned subsidiary of Borrower. Citadel Mall DSG, LLC is a wholly owned subsidiary of Borrower. Laredo/MDN II Limited Partnership is a wholly owned subsidiary of MDN/Laredo GP II, LLC which is a wholly owned subsidiary of Borrower. The Shoppes at Hamilton Place, LLC is a wholly owned subsidiary of Jarnigan Road Limited Partnership which is a 91% owned subsidiary of Borrower.

5.2 Power and Authority. The execution, delivery and performance of the Loan Agreement, the Note, the CBL Mortgage, and the other loan and collateral documents executed pursuant hereto by Borrower and all Related Entities have been duly authorized by all requisite action and, to the best of Borrower's knowledge, will not violate any provision of law, any order of any court or other agency of government, the limited partnership agreements, charter, bylaws or limited liability company agreements of Borrower, or any Related Entity, any provision of any indenture, agreement or other instrument to which Borrower, or any Related Entity is a party, or by which Borrower'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, 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 for the fiscal year ended as of December 31, 2009, 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

(or their equivalents), and (ii) the unaudited interim consolidated balance sheet of Borrower for March 31, 2010, 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 Bank, together with any explanatory notes therein referred to and attached thereto, are correct and complete and fairly present the financial condition of Parent and Borrower 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, 2010, there has been no substantial adverse change in the business, properties, condition (financial or otherwise), or results of operations of Borrower.

(c) (i) The audited balance sheet of Parent for the fiscal year ended on December 31, 2009, the unaudited balance sheet of Parent for the period ended December 31, 2009, and the related statements of operations and of cash flows for the year ended 2009 and the period ended December 31, 2009, a copy of which has been furnished to 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 December 31, 2009, 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.

5.4 Title 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 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.

5.5 Litigation. 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 Borrower 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. With respect to the materialmens’ lien litigation involving The Lakes Mall, Borrower agrees at Bank’s request, Borrower will cause the materialmens' lien to be bonded off promptly and to the satisfaction of Bank.

5.6 Taxes. Borrower has 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.

5.7 Contracts or Restrictions. In Borrower's opinion, Borrower 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.

5.8 No 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 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.

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

5.10 ERISA. To the best of Borrower's knowledge and belief, Borrower 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.

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

5.12 Ownership of Borrower. As of the date hereof, CBL Holdings I owns an approximate 1.06% general partner interest in Borrower and CBL Holdings II owns a 71.59% limited partner interest in Borrower. Borrower has no other general partners. 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, CBL & Associates, Inc., and officers and key employees of Borrower’s Affiliates own an approximate 9.81% limited partner interest in Borrower. As of the date hereof, CBL & Associates Management, Inc. owns no interest in Borrower. As of the date hereof, Richard E. Jacobs Group, Inc. owns an approximate 12.06% limited partner interest in Borrower and other investors own an approximate 5.48% limited partner interest in Borrower. As of the date hereof Borrower and its Affiliates own 100%

of the partnership interests in Walnut Square Associates Limited Partnership, Laredo/MDN II Limited Partnership and CBL Morristown, Ltd.; and 100% of the limited liability company interests of The Lakes Mall and Citadel Mall DSG, LLC. As of the date hereof, Jarnigan Road Limited Partnership is owned 91% by Borrower, 1% by Development Options, Inc. and 8% by Lewis H. Conner, Jr. As of the date hereof, Jarnigan Road Limited Partnership owns 100% of the limited liability company interests of The Shoppes at Hamilton Place, LLC.

5.13 Intentionally Deleted.

5.14 Outstanding Balance on Note. The outstanding unpaid principal balance of the Note as of July 22, 2010 is $54,000,000.00 and the undisbursed amount of the Note as of July 22, 2010 is $51,000,000.00 and no defenses or offsets exist against the holder of the Note or otherwise.

5.15 Intentionally Deleted.

5.16 Anti-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

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

6.1 Business and Existence. Perform all things necessary to preserve and keep in full force and effect its respective 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.

6.2 Maintain 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 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. 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 Bank may, from time to time, reasonably require by notice in writing to Borrower.

(b) All required insurance policies shall provide for not less than thirty (30) days' prior written notice to 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 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 Bank notwithstanding any action, inaction or breach of representation or warranty by Borrower or any Related Entity. Borrower 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 obligations of Borrower to Bank (whether matured or unmatured) or, at Bank's option, released to Borrower.

6.4 Obligations, 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 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 shall immediately pay, upon the request of Bank, all mortgage and/or intangible taxes and/or penalties payable to government officials with respect to any CBL Mortgage and/or the Note or, if Bank

has elected to pay same, Borrower shall immediately reimburse Bank therefor upon the request of Bank; provided, however Borrower shall not be required to pay so long as Borrower or any Related Entity is contesting the tax and/or penalties in good faith and through continuous and appropriate proceedings but Borrower shall be required to reimburse to the extent Bank has made any payment.

6.5 Financial Reports and Other Data. Furnish to 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 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) Parent’s consolidated balance sheet, consolidated statement of income and retained earnings and consolidated statements of changes, each prepared in accordance with GAAP, not audited but certified by the Chief Executive Officer or the Chief Financial Officer or Controller or a Senior Vice President or Vice President of Accounting of Parent, such balance sheets to be as of the end of such quarter and such consolidated statements 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, provided however, if Parent files a Form 10-Q (or its) with the SEC then the financial statements described above shall be provided to Bank with five (5) days of that filing; (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; (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 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; (e) and in any event within one hundred twenty (120) days after the end of each fiscal year of Parent, an unqualified audit as of the close of such fiscal year of Parent, 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 Bank, showing the financial condition of Parent at the close of such year and the results of operations during such year provided however, if Parent files a Form 10-K (or its equivalent) with the SEC then such financial statements shall be provided to Bank within five (5) days of that filing; (f) , if requested by Bank and on an annual basis, Borrower’s cash flow budgets for the following four (4) fiscal quarters; and (g) such other financial information as Bank may reasonably require.

6.6 Additional Information. Furnish such other information regarding the operations, business affairs and financial condition of 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, Borrower shall not be required to divulge the terms of other financing arrangements with other lending institutions if and to the extent Borrower is prohibited by contractual agreement with such lending institutions from disclosing such information with the exception that Borrower 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 shall not enter into any such contractual arrangement whereby Borrower is prohibited from disclosing such financial arrangements, without providing Bank with written notice of the nature of such prohibitions. In addition, Borrower shall not enter into any such arrangement while any Event of Default hereunder exists beyond any applicable cure periods.

6.7 Right of Inspection. Permit any person designated by Bank, at Bank's expense, to visit and inspect any of the properties, books and financial reports of 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 Bank, Bank's appraisers and examiners as required by banking laws, rules and regulations.

6.8 Environmental Laws. Maintain at all times all property described in the CBL Mortgage in compliance with all applicable Environmental Laws, and immediately notify 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.

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

6.10 Appraisals. Upon Bank's request, but no more frequently than once per every twelve (12) month period, allow appraisers employed by Bank to make updated reappraisals of the property or properties described in the CBL Mortgage, at Borrower's expense.

6.11 Intentionally Deleted.

6.12 Notice 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, Borrower

shall provide telephonic notice to 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.

6.13 REIT. Parent shall at all times maintain its status as a "real estate investment trust" under the Internal Revenue Code and shall at all times remain a New York Stock Exchange-listed or AMEX–listed company.

6.14 Ownership. Charles B. Lebovitz, John N. Foy, Ben Landress, Stephen D. Lebovitz and Michael Lebovitz (or members of their immediate family, or any or trust formed for their benefit, or a corporation in which they own the majority of the voting stock) shall own directly or indirectly at least a combined ten percent (10%) of the voting stock of Parent and operating units of Borrower, except and only to the extent diluted by additional equity offerings or similar transactions.

SECTION 7: NEGATIVE COVENANTS OF BORROWER

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

7.1 Minimum Tangible Net Worth. Permit Tangible Net Worth at any time to be less than (i) $2,300,000,000.00 plus (ii) 50% of the Net Proceeds of all Equity Issuances effected at any time after the Agreement Date by Parent, Borrower or any Subsidiaries to any Person other than Parent or any of its Subsidiaries. This shall be measured quarterly.

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

7.3 Ratio of EBITDA to Interest Expense. Permit the ratio of (i) EBITDA of Parent, Borrower and the Subsidiaries determined on a consolidated basis for the four (4) fiscal quarters most recently ending to (ii) Interest Expense of Parent and its Subsidiaries determined on a consolidated basis for such period, to be less than 1.750 to 1.00. This shall be measured quarterly.

7.4 Ratio of EBITDA to Debt Service. Permit the ratio of (i) EBITDA of Parent, Borrower and the Subsidiaries determined on a consolidated basis [for the four (4) fiscal quarters most recently ending prior to the calculation] to (ii) Debt Service of Parent, Borrower and the Subsidiaries determined on a consolidated basis for such period, to be less than 1.550 to 1.00. This shall be measured quarterly.

7.5 Indebtedness. 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 Borrower only, for indebtedness, which is subordinate in all respects to the indebtedness

evidenced by the Note 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.

7.6 Mortgages, 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 Bank securing payment of the Note;

(b) Existing liens securing indebtednesses permitted under Section 7.5 above;

(d) Liens securing indebtedness permitted under Section 7.5 above.

7.7 Sale 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 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, Borrower may sell its assets without 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 Borrower to be in violation of any covenant in this Loan Agreement.

7.8 Consolidation 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 in excess of $500,000,000.00 unless: (a) 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); and (b) unless (i) no Event of Default exists; and (ii) Borrower has delivered to Bank at least thirty (30) days the Agent 30 days prior to such acquisition all information related to the acquisition requested by Bank at least thirty (30) days and a compliance certificate, calculated on a pro forma basis, evidencing continued compliance with the financial covenants contained in this Loan Agreement after accounting for the proposed acquisition.

7.9 Partnership Distributions and Other Restricted Payments. If an Event of Default exists or would exist following the making of a Restricted Payment, Parent, Borrower and any Related Entity will not declare or make, or permit any other Subsidiary to declare or make, any Restricted Payment except that (i) Parent may declare or make cash distributions to its shareholders during any fiscal year in an aggregate amount not to exceed the minimum amount necessary for Parent to maintain its status as a REIT, to remain in compliance with this Loan Agreement and Section 8.10 of the Credit Agreement; and (ii) Parent may cause Borrower (directly or indirectly through any intermediate Subsidiaries) to make cash distributions to Parent and to other limited partners of Borrower, and Parent may cause other Subsidiaries of Parent to make cash distributions to Parent and to other holders of Equity Interests in such Subsidiaries, in each case (x) in an aggregate amount not to exceed the amount of cash distributions that Parent is permitted to declare or distribute under the immediately preceding clause (i) and (y) on a pro rata

basis, such that the aggregate amount distributed to Parent does not exceed the amount that Parent is permitted to declare or distribute under the immediately preceding clause (i). Notwithstanding the foregoing, if a Default or Event of Default specified in this Loan Agreement or in Section 11.1(a) of the Credit Agreement resulting from Borrower’s failure to pay when due the principal of, or interest on, any of the Advances or any Fees (as such terms are defined in the Credit Agreement), or Section 11.1(e) or (f) of the Credit Agreement, shall have occurred and be continuing, or if as a result of the occurrence of any other Event of Default under this Loan Agreement or the Credit Agreement, the Indebtedness or Obligations (as such term is defined in the Credit Agreement), have been accelerated pursuant to this Loan Agreement or Section 11 ..2.(a) of the Credit Agreement, Parent and Borrower shall not, and shall not permit any other Subsidiary to, make any Restricted Payments whatsoever.

7.10 Loans 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.

7.11 Limitations 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, such Participant's Proportionate Share of the amount 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 any Participant's Proportionate Share of the amount 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, such Participant’s Proportionate Share of the amount 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 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/Permitted Investments. Not make, nor permit Parent or any of its Subsidiaries to, make an Investment in or otherwise own the following items which would cause the aggregate value of such holdings (for purposes of this Section 7.12 the value of the holdings described in items (a) through (e) shall be calculated in accordance with GAAP) of Borrower and/or Subsidiaries and/or Parent to exceed at any time ( to be measured quarterly) either an aggregate thirty five percent (35%) of Gross Asset Values or the specific Gross Asset Values noted below:

(a) unimproved real estate [for purposes of this clause (a) unimproved real estate shall not include (i) raw land subject to a ground lease under which Borrower or a Subsidiary is the lessor and a Person not an Affiliate is the lessee; (ii) Properties under development; (iii) land subject to a binding contract of sale under which Borrower or one of its Subsidiaries is the seller and the buyer is not an Affiliate of Borrower and (iv) out-parcels held for lease or sale at Properties which are either completed or where development has commenced] shall not exceed ten percent (10%);

(b) developed real estate used primarily for non-retail purposes [other than the real estate located at CBL Center, 2030 Hamilton Place Boulevard, Chattanooga, Tennessee and the new office building located at 2034 Hamilton Place Boulevard, Chattanooga, Tennessee] shall not exceed ten percent (10%);

(c) Investments (which shall be valued at book value determined in accordance with GAAP) in Unconsolidated Affiliates of Borrower or Parent shall not exceed twenty percent (20%);

(d) Investments [which shall be valued at the lower of cost or market value, which shall also be limited to ten percent (10%)] in Persons that are neither Subsidiaries nor Unconsolidated Affiliates of Borrower or Parent [excluding publicly traded stock of a real estate company in which Borrower is acquiring a controlling interest which shall be limited to ten percent (10%) with any excess applied to the overall percentage limitation of this subsection (d)]; and

(e) Mortgages in favor of Borrower or Parent (other than (i) Mortgages securing Indebtedness owed to Borrower or any Subsidiary on September 30, 2002, which shall also be limited to ten percent (10%).

7.13 Limitation on Amendment to Organizational Documents. Not change their respective Articles of formation, bylaws, partnership agreements or other organizational documents in any respect which would have a material adverse effect (without the prior written consent of the Requisite Lenders) except as required by law or applicable tax requirements.

7.14 Ratio of EBITDA to Total Indebtedness. Permit the percentage of (i) EBITDA of Parent, Borrower and the Subsidiaries determined on a consolidated basis for the four (4) fiscal quarters most recently ending to (ii) total Indebtedness on a consolidated basis for such period, to be less than eleven percent (11%). This shall be measured quarterly.

SECTION 8: EVENTS OF DEFAULT

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

8.1 Payment of Principal, Interest to Bank. Borrower 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 thereof; or Borrower defaults in the payment when due of any other Recourse

Indebtednesses, liabilities, or obligations to 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

8.2 Payment of Obligations to Others. Borrower 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, Borrower 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 Borrower or the Related Entity in good faith through appropriate proceedings reasonably acceptable to Bank; or

8.3 Payment of Obligations to Wells Fargo. Borrower or any Related Entity defaults in the payment as and when due of Indebtedness or obligation for borrowed money owed to Wells Fargo and such default continues beyond and applicable grace period; or

8.4 Performance of Obligations to Bank. (a) Borrower 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 and/or the Related Entity, as the case may be, or, and such default shall continue for a period of thirty (30) calendar days after the earlier of (i) the date any Senior Officer of Borrower has actual knowledge of such failure or (ii) the date notice of such failure has been given to Borrower and/or the Related Entity, as the case may be, by Bank; provided, however, that if such default is curable, in the Bank’s reasonable opinion, but requires work to be performance, acts to be done or conditions to be remedied which, by their nature, cannot be performed, done or remedied, as the case may be, within such thirty (30) day period, no Event of Default shall be deemed to have occurred if such Borrower and/or the Related Entity, as the case may be, commences the same within such thirty (30) day period and thereafter diligently and continuously prosecutes the same to completion, and the same is in fact completed, no later than the date ninety (90) calendar days following the earlier of the date such Senior Officer has actual knowledge of such failure or the date Bank gave notice of such failure to Borrower and/or the Related Entity, as the case may be; or (b) Borrower 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 Bank in connection with the Loan and such default continues for more than thirty (30) days following mailing of notice thereof from Bank to Borrower and/or the Related Entity, as the case may be, or, and such default shall continue for a period of thirty (30) calendar days after the

earlier of (i) the date any Senior Officer of Borrower has actual knowledge of such failure or (ii) the date notice of such failure has been given to Borrower and/or the Related Entity, as the case may be, by Bank; provided, however, that if such default is curable, in the Bank’s reasonable opinion, but requires work to be performance, acts to be done or conditions to be remedied which, by their nature, cannot be performed, done or remedied, as the case may be, within such thirty (30) day period, no Event of Default shall be deemed to have occurred if such Borrower and/or the Related Entity, as the case may be, commences the same within such thirty (30) day period and thereafter diligently and continuously prosecutes the same to completion, and the same is in fact completed, no later than the date ninety (90) calendar days following the earlier of the date such Senior Officer has actual knowledge of such failure or the date Bank gave notice of such failure to Borrower and/or the Related Entity, as the case may be; or (c) any Borrower or any Related Entity shall fail to perform or observe any term, covenant, condition or agreement contained in this Agreement or any other Loan Document to which it is a party and not otherwise mentioned in this Section; or

8.5 Performance 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 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 Borrower 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

8.6 Representation or Warranty. Any representation or warranty made by Borrower 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

8.7 Bankruptcy, Etc. Borrower 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 CBL Holdings or Parent or any Related Entity, in which an order for relief is entered against Borrower or CBL Holdings or Parent which remains undismissed for a period of ninety (90) days or more; or Borrower 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

8.8 Concealment of Property, Etc. Borrower, 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

8.9 Management Change. Active management of Borrower, CBL & Associates Management, Inc. (the “Management Company”) and the Parent shall remain in Charles B. Lebovitz; provided, however, upon his failure to remain in active management such failure shall not be a default hereunder if either (i) at least two (2) of the following remain active in the management: John N. Foy, Stephen D. Lebovitz, Michael Lebovitz, Ben Landress, and Charles W. A. Willett, Jr.; or (ii) within one hundred eighty (180) days Borrower, Management Company and Parent present a management replacement satisfactory to Bank and all participating lenders in the Loan; or

8.10 Change 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

8.11 Loan 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 Borrower and/or any Related Entity shall deny it has any or further liability under this Loan Agreement, the Note, the Guaranty, or under the CBL Mortgage; or

8.12 Covenants. 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 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 Borrower or any Related Entity has actual knowledge of such failure; or (ii) the date notice of such failure has been given to Borrower by Bank; or

8.13 Breach of Section 7 of this Loan Agreement. Borrower shall fail to observe or perform its obligations to Bank, and/or any Participant under Section 7 of this Loan Agreement and such failure continues for ninety (90) calendar days after the earlier of (i) the date any Senior Officer of Borrower has actual knowledge of such failure or (ii) the date notice of such failure has been given to Borrower by Bank; or

8.14 Placement of Liens on Property. Borrower or any Related Entity shall, without the prior written consent of 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; or

8.15 Other Indebtedness Default. Borrower, any guarantor, or any significant Subsidiary (significance to be determined by Bank in its sole but reasonable discretion) during any twelve (12) month period defaults on any recourse or guaranteed indebtedness in excess of Fifty Million and No/100 Dollars ($50,000,000.00) in the aggregate.

8.16 Remedy. Upon the occurrence of any Event of Default, as specified herein, Bank shall, at its option, be relieved of any obligation to make further Revolving Credit Advances under this Loan Agreement; and Bank may at its option charge interest on the outstanding indebtedness at the Default Rate; and Bank may, at its option, thereupon declare the entire unpaid principal balances of the Note, 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 Bank concurrently or sequentially, in such order as Bank may choose.

SECTION 9: MISCELLANEOUS

9.1 Amendments. The provisions of this Loan Agreement, any Note, the CBL Mortgage or any instrument or document executed pursuant hereto or securing the indebtednesses may be amended or modified only by an instrument in writing signed by the parties hereto and thereto.

9.2 Notices. 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 Borrower , 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 Bank, to it at 701 Market Street, Chattanooga, Tennessee 37402, Attention: Gregory L. Cullum and to Construction Loan Management, 1214 Murfreesboro Road, Suite 200, Franklin, Tennessee 37064, 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, Bank shall not be required to send a copy of any notice or communication to Charles Willett, Jr. but Bank will use good faith efforts to copy Charles Willett, Jr. on any such notices or communications via regular mail, fax or email.

9.3 No Waiver, Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of 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.

9.4 Indemnification. Borrower agrees 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. Borrower agrees to indemnify Bank and the Participants and to hold 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 Borrower in making any prepayment of or conversion from an advance bearing interest at the LIBOR Rate after Borrower has given a notice thereof in accordance with the provisions of this Loan Agreement.

9.5 Survival 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 Borrower shall not have the right to assign its rights hereunder or any interest therein.

9.6 Governing 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 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 Bank, the perfection thereof, and the rights and remedies of Bank with respect thereto, shall, under mandatory provisions of law, be governed by the laws of a state other than Tennessee.

9.7 Execution 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.

9.8 Terminology; 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.

9.9 Enforceability 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 Note 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 Bank and Borrower to comply strictly with applicable usury laws; and, accordingly, in no event and upon no contingency shall 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 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 Borrower 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, Borrower and 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 Bank and Borrower, that operates to bind, obligate, or compel 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 over any other provision contained herein or in any other agreement between Bank and Borrower that is in conflict with the provisions of this paragraph.

The Note 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 Borrower be liable for the payment of interest in excess of the maximum rate permitted by such applicable law, from time to time in effect.

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

9.12 Loan Review; Extensions of Termination Date; Continuing Security.

(a) At least ninety (90) days prior to June 1, 2011, Borrower shall notify Bank in writing whether it desires to extend the existing Termination Date of Revolving Credit Loan for an additional twelve (12) months beyond the existing Termination Date of Revolving Credit Loan.

(b) The specific Termination Date of Revolving Credit Loan mentioned in Article One may be extended for an additional period of one (1) year. On or before June 1, 2011, if the Loan remains unpaid, Bank shall review the performance of the Loan. If 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 Bank renews the Loan at anytime or from time to time prior to June 1, 2011, Bank, and Borrower agree the Loan shall be renewed with covenants as contained in Sections 7 of this Loan Agreement and such other covenants, terms and conditions as may be mutually agreed upon by Borrower 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. Assessment of performance and the decision whether to extend the Termination Date of Revolving Credit Loan (from June 1, 2012 to June 1, 2013) shall be solely within Bank's discretion. Bank will not deem the performance of the Loan acceptable unless and until Borrower provides to 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 Bank and must contain no exceptions unacceptable to 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 of Revolving Credit Loan, whichever first occurs, and (b) the date the Note is to be repaid as provided therein. In the event the Termination Date of Revolving Credit Loan is not extended, Borrower may elect either to: (i) continue to use the Loan evidenced by the Note subject to the terms and provisions of this Loan Agreement in which event the principal balance due, together with all accrued interest, shall be payable in full at the Termination Date of Revolving Credit Loan existing at the time Bank elects not to extend the then existing Termination Date of Revolving Credit Loan; or (ii) cap the Loan at its then existing outstanding principal balance and continue to pay interest only monthly for a six (6) month period, such interest payments being due and payable on the first (1st) day of each month thereafter, then at the conclusion of the six (6) month period amortize the then outstanding principal balance of the loan over an eighteen (18) month period with the principal being due in equal quarterly installments on the first (1st) day of each quarter thereafter with accrued interest being payable monthly on the first (1st) day of the month, with all principal and accrued interest being due and payable in full at the end of the eighteen (18) month period. Anything contained in the foregoing to the contrary notwithstanding, upon any such extension, Borrower agrees to pay to Bank (in addition to the commitment fees it has previously paid under this Loan Agreement) an extension fee of Two Hundred Sixty Two Thousand Five Hundred and NO/100 Dollars ($262,500.00).

(c) 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 of Revolving Credit Loan (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 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 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.

9.13 Fees and Expenses. Borrower agrees to pay, or reimburse 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 Bank, incurred by 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 Note and any instrument or document now or hereafter securing the and Revolving Credit Loan indebtednesses.

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

9.15 Compromises, 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 Borrower 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, Borrower 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.

9.16 Joinder of Parent. Parent joins herein for the purpose of acknowledging and consenting to the terms and provisions hereof and agreeing to those which specifically apply to the Parent.

9.17 Bank'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 Bank shall proceed at all times in good faith and in a commercially reasonable manner.

9.18 Venue 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 Borrower, 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 Bank is situated, or in the United States District Court for the District in which the principal place of business of 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.

9.19 Waiver 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.

9.20 Conflict. In the event of any conflict between the provisions hereof and any other loan document during the continuance of this Loan Agreement the provisions of this Loan Agreement shall control.

9.21 Participation Agreement. Borrower acknowledges that the Participation Agreement exists and that Bank is obligated, subject to the terms and conditions hereof, to fund One Hundred Five Million Dollars ($105,000,000.00) to Borrower but that of that amount, Compass Bank, Regions 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), Regions Bank is to fund Twenty Two Million Five Hundred Thousand and NO/100 Dollars ($22,500,000.00) but only until June 1, 2011, 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 Five Million and NO/100 Dollars ($25,000,000.00).

9.22 USA 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, Bank may from time to time request, and Borrower shall provide to 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 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.

9.23 Non-Recourse. NOTWITHSTANDING ANYTHING CONTAINED IN THIS LOAN AGREEMENT TO THE CONTRARY, BANK EXPRESSLY AGREES THAT PAYMENT OF ALL PRINCIPAL, INTEREST AND OTHER AMOUNTS (INCLUDING COSTS AND EXPENSES) DUE AND PERFORMANCE OF ALL OTHER OBLIGATIONS AND LIABILITIES UNDER THIS LOAN AGREEMENT BY CBL HOLDINGS I, INC., IN ITS CAPACITY AS THE GENERAL PARTNER OF BORROWER, SHALL BE NON-RECOURSE AS TO SUCH GENERAL PARTNER.

(Signatures on Next Page)

IN WITNESS WHEREOF, Borrower, Bank, and CBL Holdings, and Parent (pursuant to Section 9.16 hereof), 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/ Charles W.A. Willett, Jr.

Name: Charles W. A. Willett, Jr.

Title: Senior Vice President-Real Estate Finance

BORROWER

CBL & ASSOCIATES PROPERTIES, INC.

By: /s/ Charles W.A. Willett, Jr.

Name: Charles W. A. Willett, Jr.

Title: Senior Vice President-Real Estate Finance

PARENT

FIRST TENNESSEE BANK NATIONAL

ASSOCIATION

By: /s/ Gregory L. Cullum

Gregory L. Cullum, Senior Vice President

BANK

EXHIBIT "A"

Real property known as:

(a) Walnut Square Mall, Dalton, Georgia

(b) The Lakes Mall, Fruitport, Michigan

(d) Dick’s Sporting Goods at Citadel Mall, Charleston, S.C.

(e) Cinemark, Olive Garden out parcel, Kool Smiles Dental (NCDR, LLC) has a lease for 9,175 SF, International Bank of Commerce leases 1,500 SF; LOI from Chuck E Cheese for the 18,650 SF of the former Circuit City Space at Mall Del Norte, Laredo, Texas

(f) The Shoppes at Hamilton Place, Chattanooga, 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.

A-1

EXHIBIT "B"

PERMITTED ENCUMBRANCES

1. As described in the Mortgages.

B-1

EXHIBIT "C"

NOTE

C-1

EXHIBIT "D"

CHECKLIST FOR CLOSING

D-1

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 July 29, 2010, between Borrower 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 Bank in writing.

2. As of the date hereof, Borrower has no 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 copies of all calculations related to the financial covenants are attached), 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: ____________________________________

Name: Charles W. A. Willett, Jr.

Title: Senior Vice President-Real Estate Finance

E-1

EXHIBIT "F"

LITIGATION

Disclosure Pursuant to Paragraph 5.5

See Exhibit "F-1" attached for description of all litigation which could have a material adverse effect on Borrower.

ENVIRONMENTAL MATTERS

Disclosure pursuant to Paragraph 5.11

None.

F-1

EXHIBIT “F-1”

LITIGATION WHICH COULD HAVE A MATERIAL

EFFECT ON BORROWER OR ANY RELATED ENTITY

Mechanic’s liens in excess of $800,000.00 have been filed with respect to construction of a tenant’s space at The Lakes Mall in Fruitport, Michigan.

F-2

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 as of July 29, 2010, between and among First Tennessee Bank National Association and CBL & Associates Limited Partnership, 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 as of July 29, 2010.

COMPASS BANK

By: /s/ Keely McGee

Keely McGee, Senior Vice President

JOINDER IN AMENDED AND RESTATED LOAN AGREEMENT

REGIONS BANK as "Participant" under the terms of that certain Amended and Restated Loan Agreement (the "Loan Agreement") dated as of July 29, 2010, between and among First Tennessee Bank National Association and CBL & Associates Limited Partnership, 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 July 29, 2010.

REGIONS BANK

By: /s/ Ronald J. Bennett

Name: Ronald J. Bennett

Title: Executive Vice President

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 as of July 29, 2010, between and among First Tennessee Bank National Association and CBL & Associates Limited Partnership, 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 as of July 29, 2010.

BRANCH BANKING AND TRUST COMPANY

By: /s/ Robert M. Searson

Robert M. Searson

Title: Senior Vice President

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 as of July 29, 2010, between and among First Tennessee Bank National Association and CBL & Associates Limited Partnership, 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 as of July 29, 2010.

MANUFACTURERS AND TRADERS TRUST COMPANY

By: /s/ Steven P. Deck

Steven P. Deck, Vice President

EX-12.1 4 exhibit121.htm EXHIBIT 12.1 exhibit121.htm

Exhibit 12.1

CBL & Associates Properties, Inc.

Computation of Ratio of Earnings to Combined Fixed Charges

(in thousands, except ratios)

	Six Months Ended June 30,						Year Ended December 31,
	2010			2009			2009			2008			2007			2006			2005

Earnings:

Income (loss) before discontinued operations, equity in earnings and noncontrolling interests	$	26,911		$	39,095		$	(13,881	)	$	68,098		$	144,819		$	179,637		$	267,160
Fixed charges less capitalized interest and preferred dividends		146,801			144,727			294,051			313,209			287,884			257,067			210,914
Distributed income of equity investees		2,730			6,020			12,665			15,661			9,450			12,285			7,492
Equity in losses of equity investees for which charges arise from guarantees		-			-			-			-			-			-			(1,020	)
Noncontrolling interest in earnings of subsidiaries that have not incurred fixed charges		(1,928	)		(2,244	)		(4,901	)		(3,886	)		(5,278	)		(4,205	)		(3,700	)

Total earnings	$	174,514		$	187,598		$	287,934		$	393,082		$	436,875		$	444,784		$	480,846


Combined fixed charges (1):
Interest expense (2)	$	146,801		$	144,727		$	294,051		$	313,209		$	287,884		$	257,067		$	210,914
Capitalized interest		1,413			4,427			7,327			19,555			19,410			15,992			10,184
Preferred dividends (3)		24,603			21,252			42,555			42,082			34,038			30,568			30,568

Total combined fixed charges	$	172,817		$	170,406		$	343,933		$	374,846		$	341,332		$	303,627		$	251,666

Ratio of earnings to combined fixed charges(4)		1.01			1.10			-			1.05			1.28			1.46			1.91

(1)	The interest portion of rental expense is not calculated because the rental expense of the company is not significant.
(2)	Interest expense includes amortization of capitalized debt expenses and amortization of premiums and discounts.
(3)	Includes preferred distributions to the Company's partner in CW Joint Venture, LLC.
(4)	Total earnings for the year ended December 31, 2009 were inadequate to cover combined fixed charges by $55,999.

EX-31.1 5 exhibit311.htm EXHIBIT 31.1 exhibit311.htm

Exhibit 31.1

CERTIFICATION

I, Stephen D. Lebovitz, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of CBL & Associates Properties, Inc.;

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

(4) The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(5) The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2010

/s/ Stephen D. Lebovitz

____________________________________

Stephen D. Lebovitz, Director, President and

Chief Executive Officer

EX-31.2 6 exhibit312.htm EXHIBIT 31.2 exhibit312.htm

Exhibit 31.2

CERTIFICATION

I, John N. Foy, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of CBL & Associates Properties, Inc.;

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 9, 2010

/s/ John N. Foy

________________________________________

John N. Foy, Vice Chairman of the Board, Chief

Financial Officer, Treasurer and Secretary

EX-32.1 7 exhibit321.htm EXHIBIT 32.1 exhibit321.htm

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CBL & ASSOCIATES PROPERTIES, INC. (the “Company”) on Form 10-Q for the six months ending June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen D. Lebovitz, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 (as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen D. Lebovitz

____________________________________

Stephen D. Lebovitz, Director, President and

Chief Executive Officer

August 9, 2010

____________________________________

Date

EX-32.2 8 exhibit322.htm EXHIBIT 32.2 exhibit322.htm

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of CBL & ASSOCIATES PROPERTIES, INC. (the “Company”) on Form 10-Q for the six months ending June 30, 2010 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John N. Foy, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350 (as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002), that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ John N. Foy

_______________________________________

John N. Foy, Vice Chairman of the Board,

Chief Financial Officer, Treasurer and Secretary

August 9, 2010

____________________________________

Date