Exhibit 4.4
EXHIBIT E
TERMS
OF
SERIES J SPECIAL COMMON UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
(the "Operating Partnership")
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
the Operating Partnership
WHEREAS, Article 4.4 of the Second Amended and Restated
Partnership Agreement of the Operating Partnership (as amended through January
31, 2001, and as the same may hereafter be amended as permitted therein and
herein, the "Partnership Agreement") grants CBL Holdings I, Inc., the general
partner of the Operating Partnership (the "General Partner"), authority to cause
the Operating Partnership to issue interests in the Operating Partnership to
persons other than the General Partner in one or more classes or series, with
such designations, preferences and relative, participating, optional or other
special rights, powers and duties as may be determined by the General Partner in
its sole and absolute discretion. (For ease of reference, capitalized terms used
herein and not otherwise defined have the meanings assigned to them in the
Partnership Agreement.)
NOW THEREFORE, the General Partner hereby designates a series
of priority units and fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such priority units, as follows:
1. Designation and Amount. The units of such series shall be designated "Series
J Special Common Units" (the "SCUs") and the number of units constituting such
series shall initially be 12,556,427. The Operating Partnership may not issue
any additional SCUs unless (i) the issuance is required to deliver additional
consideration as required by the terms of the Master Contribution Agreement,
dated as of September 25, 2000, among the Company, the Operating Partnership,
Xxxxxx Realty Investors Limited Partnership ("JRI") and certain other persons
named therein, as amended by the Letter Agreement, dated November 13, 2000, and
the Amendment to the Master Contribution Agreement, dated as of December 19,
2000, and as the same may be further amended, supplemented or modified (the
"Master Contribution Agreement") or any Interest Contribution Agreement or Deed
Contribution Agreement (as those terms are defined in the Master Contribution
Agreement) or (ii) it has obtained the prior written consent of JRI. The rights
and obligations of the SCUs shall be as set forth herein (to the extent not
inconsistent with the Partnership Agreement) and in the Partnership Agreement.
Nothing in the foregoing shall be deemed to limit the right and power of the
General Partner to cause the Operating Partnership to issue securities otherwise
designated to the fullest extent permitted under the terms of the Partnership
Agreement and this Exhibit E.
2. Distribution Rights. (a) Holders of SCUs shall be entitled to
receive, when, as and if declared by the General Partner distributions with
respect to the SCUs in the manner and to the fullest extent set forth in the
Partnership Agreement.
(b) Distributions with respect to the SCUs shall be payable
on the dates designated by the General Partner for the payment of distributions
to the holders of Common Units. Any distribution payable on the SCUs for the
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quarter in which the SCUs are first issued will be prorated and computed on the
basis of a 360-day year consisting of twelve 30-day months; provided, however,
that in the case of SCUs issued on January 31, 2001, the distribution payable
for the first fiscal quarter following issuance, shall be reduced by the amount
of $.0080625 per SCU. Distributions will be payable to holders of record as they
appear in the records of the Operating Partnership at the close of business on
the applicable record date, which shall be the record date designated by the
General Partner for the payment of distributions for such quarter to the holders
of Common Units.
(c) At such time, if any, as there is any distribution
shortfall as described in Section 6.2(a)(iii) of the Partnership Agreement, none
of the Operating Partnership, the General Partner or the REIT will redeem,
purchase or otherwise acquire for any consideration (or any moneys be paid to or
made available for any sinking fund for the redemption of any such units) any
Common Units or any other units of interest in the Partnership by their terms
ranking junior as to distributions to the rights of the SCUs (except by
conversion into or exchange for shares of Common Stock of the REIT or other
units of the Operating Partnership ranking junior to the SCUs as to
distributions).
(d) Distributions with respect to the SCUs are intended to
qualify as permitted distributions of cash that are not treated as a disguised
sale within the meaning of Treasury Regulation 1.707-4, and the provisions of
this Exhibit E shall be construed and applied consistent with such Treasury
Regulations.
3. Special Distribution Upon Liquidation. Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the affairs of the Operating
Partnership, the holders of SCUs shall be entitled to be paid out of the assets
of the Operating Partnership legally available for distribution to its unit
holders an amount equal to any distribution shortfall described in Section
6.2(a)(iii) of the Partnership Agreement, before any distribution or payment
shall be made to holders of Common Units. In the event that, upon such voluntary
or involuntary liquidation, dissolution or winding-up, the available assets of
the Operating Partnership are insufficient to pay such amount on all outstanding
SCUs, then the holders of the SCUs shall share ratably in any such distribution
of assets, based on the number of SCUs held by each such holder. Holders of SCUs
shall be entitled to written notice of any such liquidation. In addition, upon
any voluntary or involuntary liquidation, dissolution or winding-up of the
affairs of the Operating Partnership, after any such distribution shortfall on
account of the SCUs shall have been paid in cash, the SCUs shall be treated as
if they had been exchanged for Common Units pursuant to the terms of Paragraph
7(b) hereof. The consolidation or merger of the Operating Partnership with or
into any partnership, limited liability company, corporation, trust or other
entity shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Operating Partnership.
4. Redemption. (a) SCUs shall not be redeemable by the Operating Partnership
prior to January 31, 2011. Except as provided below in Paragraph 4(c), on or
after January 31, 2011, the Operating Partnership, at its option upon not less
than thirty (30) nor more than sixty (60) days' written notice, may redeem the
SCUs, in whole or in part, on the first Business Day following any record date
established for the determination of parties entitled to receive any
distributions being made to holders of SCUs, by (i) paying in cash to the
holders of SCUs with respect to their SCUs being redeemed, any distribution
shortfall described in Section 6.2(a)(iii) of the Partnership Agreement
outstanding on the date of redemption (whether or not declared) and (ii) issuing
to the holders thereof a number of Common Units equal to the Common Unit Amount
(as defined in Paragraph 7 below). If fewer than all of the outstanding SCUs are
to be redeemed, the units of SCUs to be redeemed shall be redeemed pro rata (as
nearly as may be practicable without creating fractional units) or by lot or by
any other equitable method determined by the Operating Partnership. Holders of
SCUs to be redeemed shall surrender the certificates evidencing such SCUs, if
any, at the place designated in the Operating Partnership's notice and shall be
entitled to the distribution payments and Common Units described in the second
sentence of this Paragraph 4(a) prior to or concurrently with such surrender. If
notice of redemption of any SCUs has been given and if the funds and Common
Units necessary for such redemption have been set aside by the Operating
Partnership in trust for the benefit of the holders of any SCUs so called for
redemption, then from and after the redemption date distributions shall cease to
be payable with respect to such SCUs, such SCUs shall no longer be deemed
outstanding and all rights of the holders of such units will terminate, except
the right to receive the distribution payments and Common Units described in the
second sentence of this Paragraph 4(a).
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(b) Notwithstanding the provisions of Paragraph 4(a) above,
unless full cumulative dividends on all SCUs shall have been or
contemporaneously are declared and paid in cash or declared and a sum sufficient
for the payment thereof in cash set apart for payment for all past dividend
periods and the then current dividend period or portion thereof, no SCUs shall
be redeemed unless all outstanding units of SCUs are simultaneously redeemed,
and the Operating Partnership shall not purchase or otherwise acquire directly
or indirectly any SCUs.
(c) Notice of redemption shall be mailed by the Operating
Partnership, postage prepaid, not less than thirty (30) nor more than sixty (60)
days prior to the redemption date, addressed to the respective holders of record
of the units of SCUs to be redeemed at their respective addresses as they appear
on the records of the Operating Partnership. Failure to give such notice or any
defect thereto or in the mailing thereof shall not affect the validity of the
proceedings for the redemption of any SCUs. Each notice shall state (i) the
redemption date; (ii) the total number of SCUs to be redeemed and the number of
SCUs held by such holder to be redeemed; (iii) the Common Unit Amount; (iv) the
place or places where SCUs are to be surrendered for payment of the distribution
shortfall described in Section 6.2(a)(iii) of the Partnership Agreement
outstanding thereon and the issuance of a number of Common Units equal to the
Common Unit Amount; and (v) that distributions on the SCUs to be redeemed shall
cease to be payable on such redemption date.
(d) All SCUs redeemed pursuant to this Paragraph 4 shall
be deemed retired and terminated.
(e) The SCUs shall have no stated maturity and shall not be
subject to any sinking fund or mandatory redemption except as otherwise provided
in this Section 4.
5. Voting Rights. (a) Holders of the SCUs shall have the voting rights
set forth herein and in the Partnership Agreement.
(b) So long as any SCUs remain outstanding, the Operating
Partnership shall not, without the affirmative vote or consent of the holders of
two-thirds of the SCUs outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such series voting separately as a class):
(i) undertake, consent to, or otherwise participate in
or acquiesce to any recapitalization transaction (including, without
limitation, an initial public offering, a merger, consolidation, other
business combination, exchange, self-tender offer for all or
substantially all of the Common Units, or sale or other disposition of
all or substantially all of the Operating Partnership's assets) (each
of the foregoing being referred to herein as a "Recapitalization
Transaction") unless in connection with such a Recapitalization
Transaction (x) either each SCU outstanding prior to the
Recapitalization Transaction will (A) remain outstanding following the
consummation of such Recapitalization Transaction without any amendment
of any of the provisions of this Exhibit E or the other terms of the
Partnership Agreement establishing the rights and obligations of
holders of the SCUs in any manner adverse to the holders of SCUs or (B)
be converted into or exchanged for securities of the surviving entity
having preferences, conversion and other rights, voting powers,
restrictions, distribution rights and terms and conditions of
redemption thereof no less favorable than those of a SCU under this
Exhibit E and the Partnership Agreement, and (y) each holder of SCUs
shall have the option to convert its SCUs into the amount and type of
consideration and/or securities receivable by a holder of the number of
Common Units into which such holder's SCUs could have been exchanged
immediately prior to the consummation of the Recapitalization
Transaction pursuant to Paragraph 7(b) hereof upon the consummation of
the Recapitalization Transaction, and (z) the holders of the SCUs will
be treated no less favorably than the holders of the Common Units;
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(ii) amend, alter or repeal the provisions of this
Exhibit E or Sections 6.2(a)(iii), 6.2(a)(iv), 6.2(a)(v), 6.2(d) or
6.2(e) of the Partnership Agreement, the provisions of Section 9.2(a)
as they apply to holders of SCUs or Common Units issued in respect
thereof or the provisions of Section 9.2(c), in each case whether by
merger, consolidation or otherwise; or
(iii) otherwise amend, alter or repeal the provisions of
the Partnership Agreement in a manner that would adversely affect in
any material respect the holders of the SCUs disproportionately with
respect to the rights of holders of the Common Units; it being
understood that nothing in this Exhibit E, shall be deemed to limit the
right of the Operating Partnership to issue securities to holders of
any interests in the Operating Partnership that rank on a parity with
or prior to the SCUs with respect to distribution rights and rights
upon dissolution, liquidation or winding-up of the Operating
Partnership or to amend, alter or repeal the terms of any such
securities.
(c) The holders of the SCUs shall have the right to vote with
the holders of Common Units, as a single class, on any matter on which the
holders of Common Units are entitled to vote.
(d) The foregoing voting provisions of this Paragraph 5 shall
not apply if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding units of
SCUs shall have been redeemed or called for redemption upon proper notice and
sufficient funds, in cash, shall have been deposited in trust to effect such
redemption.
(e) In any matter in which the SCUs may vote as a class (as
expressly provided herein or as may be required by law), each SCU shall be
entitled to one vote. In any matter in which the SCUs may vote with the Common
Units as a single class, each SCU shall be entitled to the number of votes equal
to the number of Common Units issuable upon the exchange of one SCU pursuant to
Paragraph 7(b) hereof.
6. Notice of Extraordinary Transaction of the Company. The Company shall notify
the holders of SCUs of its intention to make any extraordinary distributions of
cash or property to its shareholders or effect a merger (including, without
limitation, a triangular merger), a sale of all or substantially all of its
assets or any other similar transaction outside of the ordinary course of
business at least thirty (30) days prior to the record date, if any, to
determine shareholders eligible to receive such distribution or to vote upon the
approval of such merger, sale or other transaction (or, if no such record date
is applicable, at least thirty (30) days before consummation of such merger,
sale or other transaction). This provision for such notice shall not be deemed
(i) to permit any transaction that otherwise is prohibited by this Exhibit E or
the Partnership Agreement or requires the approval of the holders of SCUs or
(ii) to require a vote of the holders of SCUs to a transaction that does not
otherwise require such a vote under this Exhibit E and the Partnership Agreement
or (iii) to effect the validity of any transaction if such notice is not given.
Each holder of SCUs, as a condition to the receipt of the notice pursuant
hereto, shall be obligated to keep confidential the information set forth
therein until such time as the Company has made public disclosure thereof and to
use such information during such period of confidentiality solely for purposes
of determining whether or not to exercise its Series J Exchange Rights;
provided, however, that a holder of SCUs may disclose such information to its
attorney, accountant and/or financial advisor for purposes of obtaining advice
with respect to such exercise so long as such attorney, accountant and/or
financial advisor agrees to receive and hold such information subject to this
confidentiality requirement.
7. Exchange.
(a) At any time following the earlier to occur of (x) January
31, 2004 or (y) the death of the direct or indirect holder or beneficial owner
thereof, and in either case subject to the remainder of this Paragraph 7, a
holder of SCUs shall have the right (the "Series J Exchange Right") to exchange
all or any portion of such holder's SCU's (the "Series J Offered Units") for
Series J Exchange Consideration (as defined below), subject to the limitations
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contained in Paragraphs 7(c) and 7(d) below. Any such Series J Exchange Right
shall be exercised pursuant to an exchange notice comparable to the Exchange
Notice required under Exhibit D to the Partnership Agreement (such notice, a
"Series J Exchange Notice") delivered, at the election of the holder exercising
the Series J Exchange Right (the "Series J Exercising Holder"), to the Company
or to the Operating Partnership, by the Series J Exercising Holder.
(b) The exchange consideration (the "Series J Exchange
Consideration") payable by the Company or the Operating Partnership, as
applicable, to each Series J Exercising Holder shall be equal to the product of
(x) the Common Stock Amount with respect to the Series J Offered Units
multiplied by (y) the Current Per Share Market Price, each computed as of the
date on which the Series J Exchange Notice was delivered to the Company. In
connection with a Series J Exchange Notice delivered to the Company, the Series
J Exchange Consideration shall, in the sole and absolute discretion of the
Company, be paid in the form of (A) cash, or cashier's or certified check, or by
wire transfer of immediately available funds to the Series J Exercising Holder's
designated account or (B) subject to the applicable Ownership Limit, by the
issuance by the Company of a number of shares of its Common Stock equal to the
Common Stock Amount with respect to the Series J Offered Units or (C) subject to
the applicable Ownership Limit, any combination of cash and Common Stock (valued
at the Current Per Share Market Price). In connection with a Series J Exchange
Notice delivered to the Operating Partnership, the Series J Exchange
Consideration shall be paid by the Operating Partnership by the issuance by the
Operating Partnership of a number of Common Units equal to the Common Unit
Amount. In addition to the Series J Exchange Consideration, concurrently with
any exchange pursuant to this Paragraph 7, the Operating Partnership shall pay
the Series J Exercising Holder cash in an amount equal to any distribution
shortfall described in Section 6.2(a)(iii) of the Partnership Agreement with
respect to the Series J Offered Units outstanding on the date of the exchange.
As used herein, the term "Common Unit Amount" shall mean, with respect
to any number of SCUs, the number of Common Units equal to such number of SCUs
multiplied by the Common Unit Conversion Factor; provided, however, that in the
event that the Operating Partnership issues to all holders of Common Units
rights, options, warrants or convertible or exchangeable securities entitling
such holders to subscribe for or purchase additional Common Units, or any other
securities or property of the Operating Partnership (collectively, "Common Unit
Additional Rights"), other than a right to receive Common Units pursuant to a
Distribution of Common Units in Lieu of Cash (as defined below), then the Common
Unit Amount shall also include (other than with respect to any Common Units or
SCUs "beneficially owned" by an "Acquiring Person" (as those terms are defined
in the Company's Rights Agreement, dated as of April 30, 1999, as amended as of
the Principal Closing Date (as defined in the Master Contribution Agreement) and
as it may be further amended from time to time, and any successor agreement
thereof (collectively, the "Rights Agreement"))), such Common Unit Additional
Rights that a holder of that number of Common Units would be entitled to
receive. As used herein, the term "Common Unit Conversion Factor" shall mean
1.0, provided, that, in the event that the Operating Partnership (i) makes a
distribution to all holders of its Common Units in Common Units (other than a
distribution of Common Units pursuant to an offer to all holders of Common Units
and SCUs permitting each to elect to receive a distribution in Common Units in
lieu of a cash distribution (such a distribution of Common Units is referred to
herein as a "Distribution of Common Units in Lieu of Cash")), (ii) subdivides or
splits its outstanding Common Units (which shall expressly exclude any
Distribution of Common Units in Lieu of Cash), or (iii) combines or reverse
splits its outstanding Common Units into a smaller number of Common Units (in
each case, without making a comparable distribution, subdivision, split,
combination or reverse split with respect to the SCUs), the Common Unit
Conversion Factor in effect immediately preceding such event shall be adjusted
by multiplying the Common Unit Conversion Factor by a fraction, the numerator of
which shall be the number of Common Units issued and outstanding on the record
date for such distribution, subdivision, split, combination or reverse split
(assuming for such purposes that such distribution, subdivision, split,
combination or reverse split occurred as of such time), and the denominator of
which shall be the actual number of Common Units (determined without the above
assumption) issued and outstanding on the record date for such distribution,
subdivision, split, combination or reverse split. Any adjustment to the Common
Unit Conversion Factor shall become effective immediately after the record date
for such event in the case of a distribution or the effective date in the case
of a subdivision, split, combination or reverse split.
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(c) Notwithstanding anything herein to the contrary, any
Series J Exchange Right with respect to the Company may only be exercised to the
extent that, upon exercise of the Series J Exchange Right, assuming payment by
the Company of the Series J Exchange Consideration in shares of Common Stock,
the Series J Exercising Holder will not, on a cumulative basis, Beneficially Own
or Constructively Own shares of Common Stock, including shares of Common Stock
to be issued upon exercise of the Series J Exchange Right, in excess of the
applicable Ownership Limit. If a Series J Exchange Notice is delivered to the
Company but, as a result of the applicable Ownership Limit or as a result of
restrictions contained in the certificate of incorporation of the Company, the
Series J Exchange Right cannot be exercised in full as aforesaid, the Series J
Exchange Notice shall be deemed to be modified to provide that the Series J
Exchange Right shall be exercised only to the extent permitted under the
applicable Ownership Limit under the certificate of incorporation of the
Company, and the Series J Exchange Notice with respect to the remainder of such
Series J Exchange Right shall be deemed to have been withdrawn.
(d) Series J Exchange Rights may be exercised at any time
after the date set forth in Paragraph 7(a) above and from time to time,
provided, however, that, except as set forth below in Paragraph 7(f) or with the
prior written consent of the General Partner, (x) only two (2) Series J Exchange
Notices may be delivered to the Company or the Operating Partnership by each
holder of SCUs during any consecutive twelve (12) month period; and (y) no
Series J Exchange Notice may be delivered with respect to SCUs either (i) having
a value of less than $250,000 calculated by multiplying the Common Stock Amount
with respect to such SCUs by the Current Per Share Market Price or (ii) if a
holder does not own SCUs having a value of $250,000 or more, constituting less
than all of the SCUs owned by such holder.
(e) Within thirty (30) days after receipt by the Company or
the Operating Partnership of any Series J Exchange Notice delivered in
accordance with the requirements of Paragraph 7(a) hereof, the Company or the
Operating Partnership, as applicable, shall deliver to the Series J Exercising
Holder a notice (a "Series J Election Notice"), which Series J Election Notice
shall set forth the computation of the Series J Exchange Consideration and, in
the case of a Series J Election Notice delivered by the Company, shall specify
the form of the Series J Exchange Consideration (which shall be in accordance
with Paragraph 7(b) hereof), to be paid by the Company or the Operating
Partnership, as applicable to such Series J Exercising Holder and the date, time
and location for completion of the purchase and sale of the Series J Offered
Units, which date shall, to the extent required, in no event be more than (A) in
the case of Series J Offered Units with respect to which (x) the Operating
Partnership is required to pay the Series J Exchange Consideration by issuance
of Common Units or (y) the Company has elected to pay the Series J Exchange
Consideration by issuance of shares of Common Stock, ten (10) days after the
delivery by the Company or the Operating Partnership, as applicable, of the
Series J Election Notice for the Series J Offered Units or (B) in the case of
Series J Offered Units with respect to which the Company has elected to pay the
Series J Exchange Consideration in cash, sixty (60) days after the initial date
of receipt by the Company of the Series J Exchange Notice for such Series J
Offered Units; provided, however, that such sixty (60) day period may be
extended for an additional sixty (60) day period to the extent required for the
Company to cause additional shares of its Common Stock to be issued to provide
financing to be used to acquire the Series J Offered Units. Notwithstanding the
foregoing, each of the Company and the Operating Partnership agrees to use its
reasonable efforts to cause the closing of the exchange hereunder to occur as
quickly as possible. If the Company or the Operating Partnership, as applicable,
has delivered a Series J Election Notice to the Series J Exercising Holder with
respect to a Series J Exchange Notice, the Series J Exchange Notice may not be
withdrawn or modified by the Series J Exercising Holder (except to the extent of
any deemed modification required by Section 7(c) above) without the consent of
the General Partner. Similarly, if the Company or the Operating Partnership
delivers a Series J Election Notice to a Series J Exercising Holder, the Company
or the Operating Partnership, as applicable, may not modify the Series J
Election Notice without the consent of the Series J Exercising Holder.
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(f) Notwithstanding the limitation set forth in clause (x) of
Paragraph 7(d), in the event that the Company provides notice to the holders of
SCUs, pursuant to Paragraph 6 hereof, the Series J Exchange Rights shall be
exercisable by each holder of SCUs at any time after the date set forth in
Paragraph 7(a) that is during the period commencing on the date on which the
Company provides such notice and ending on the earlier to occur of thirty (30)
days from receipt of the Company's aforesaid notice and the record date, if any,
to determine shareholders eligible to receive such distribution or to vote upon
the approval of such merger, sale or other extraordinary transaction (or, if no
such record date is applicable, the date that is thirty (30) days after the date
the Company provides the notice pursuant to Paragraph 6 hereof). In the event
that a Series J Exercising Holder delivers to the Company a Series J Exchange
Notice pursuant to this Paragraph 7(f), the Company shall be required to deliver
a Series J Election Notice before the earlier of (1) the tenth (10th) Business
Day after the Company receives the Series J Exchange Notice or (2) one (1)
Business Day before the record date to determine shareholders eligible to
receive a distribution or vote on approval and such Series J Election Notice
shall, among other things, set the date for the purchase and sale of the Series
J Offered Units, which date shall, to the extent required, in no event be more
than (A) in the case of Series J Offered Units with respect to which the Company
has elected to pay the Series J Exchange Consideration by issuance of shares of
Common Stock, one (1) Business Day prior to the record date, if any, to
determine shareholders eligible to receive such distribution or to vote upon the
approval of such merger, sale or other extraordinary transaction or (B) in the
case of Series J Offered Units with respect to which the Company has elected to
pay the Series J Exchange Consideration in cash, sixty (60) days after the
initial date of receipt by the Company of the Series J Exchange Notice for such
Series J Offered Units; provided, however, that such sixty (60) day period may
be extended for an additional sixty (60) day period to the extent required for
the Company to cause additional shares of its Common Stock to be issued to
provide financing to be used to acquire the Series J Offered Units.
Notwithstanding the foregoing, the Company shall use its reasonable efforts to
cause the closing of the exchange hereunder to occur as quickly as possible.
(g) At the closing of the purchase and sale of Series J
Offered Units, payment of the Series J Exchange Consideration shall be
accompanied by proper instruments of transfer and assignment and by the delivery
of (i) representations and warranties of (A) the Series J Exercising Holder with
respect to (x) its due authority to sell all of the right, title and interest in
and to such Series J Offered Units to the Company or the Operating Partnership,
as applicable, (y) the status of the Series J Offered Units being sold, free and
clear of all Liens and (z) its intent to acquire the Common Stock or Common
Units, as applicable, for investment purposes and not for distribution, and (B)
the Company or the Operating Partnership, as applicable, with respect to due
authority for the purchase of such Series J Offered Units, and (ii) to the
extent that any shares of Common Stock or Common Units are issued in payment of
the Series J Exchange Consideration or any portion thereof, (A) an opinion of
counsel for the Company or the Operating Partnership, as applicable, reasonably
satisfactory to the Series J Exercising Holder, to the effect that (I) such
shares of Common Stock or Common Units, as applicable, have been duly
authorized, are validly issued, fully-paid and non-assessable and (II) if shares
of Common Stock are issued, that the issuance of such shares will not violate
the applicable Ownership Limit, and (B) a stock certificate or certificates
evidencing the shares of Common Stock to be issued and registered in the name of
the Series J Exercising Holder or its designee, with an appropriate legend
reflecting that such shares or units are not registered under the Securities Act
of 1933, as amended, and may not be offered or sold unless registered pursuant
to the provisions of such act or an exemption therefrom is available as
confirmed by an opinion of counsel satisfactory to the Company or the Operating
Partnership, or an executed amendment to the Partnership Agreement reflecting
the Series J Exercising Holder as a holder of the applicable number of Common
Units, as applicable.
(h) To facilitate the Company's ability to fully perform its
obligations hereunder, the Company covenants and agrees, for the benefit of the
holders from time to time of SCUs, as follows:
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(i) At all times during the pendency of the Series J
Exchange Rights, the Company shall reserve for issuance such number of
shares of Common Stock as may be necessary to enable the Company to
issue such shares in full payment of the Series J Exchange
Consideration in regard to all SCUs which are from time to time
outstanding.
(ii) As long as the Company shall be obligated to file
periodic reports under the Exchange Act, the Company will timely file
such reports in such manner as shall enable any recipient of Common
Stock issued to holders of SCUs hereunder in reliance upon an exemption
from registration under the Securities Act to continue to be eligible
to utilize Rule 144 promulgated by the SEC pursuant to the Securities
Act, or any successor rule or regulation or statute thereunder, for the
resale thereof.
(iii) Each holder of SCUs, upon request, shall be entitled
to receive from the Operating Partnership in a timely manner all
reports filed by the Company with the SEC and all other communications
transmitted from time to time by the Company to its shareholders
generally.
(iv) Other than as contemplated under the terms of the
Rights Agreement, issuances of stock pursuant to the Company's dividend
reinvestment plan (as described in the Company's prospectus dated
August 15, 1995) or any customary dividend reinvestment plan adopted by
the Company after that date and other than the issuance of deferred
stock awards or the grant of stock options to officers, directors and
employees of the Company, the Company shall not issue or sell any
shares of Common Stock or other equity securities or any instrument
convertible into any equity security for a consideration less than the
fair value of such Common Stock or other equity security, as determined
in each case by the Board of Directors of the Company, in consultation
with the Company's professional advisors, and under no circumstances
shall the Company declare any stock dividend, stock split, stock
distribution or the like, unless fair and equitable arrangements are
provided, to the extent necessary, to fully adjust, and to avoid any
dilution in, the rights of holders of the SCUs under this Exhibit E and
the Partnership Agreement.
(i) To facilitate the Operating Partnership's ability to fully
perform its obligations hereunder, the Operating Partnership covenants and
agrees, for the benefit of the holders from time to time of SCUs, as follows:
(i) At all times during the pendency of the Series J
Exchange Rights, the Operating Partnership shall reserve for issuance
such number of Common Units as may be necessary to enable the Operating
Partnership to issue such units in full payment of the Series J
Exchange Consideration in regard to all SCUs which are from time to
time outstanding.
(ii) Other than partnership interests issuable to the
Company which correspond to issuances by the Company pursuant to the
Rights Agreement, its current dividend reinvestment plan (as described
in the Company's prospectus dated August 15, 1995) or any customary
dividend reinvestment plan adopted by the Company after that date, or
issuances by the Company of deferred stock awards or the grant of stock
options, to officers, directors and employees of the Company, the
Operating Partnership shall not issue or sell any Common Units or any
instrument convertible into Common Units for a consideration less than
the fair value of such Common Units, as determined in each case by the
Board of Directors of the Company, in its sole discretion, and under no
circumstances shall the Operating Partnership declare any Common Unit
dividend, Common Unit split, Common Unit distribution or the like,
unless fair and equitable arrangements are provided, to the extent
necessary, to fully adjust, and to avoid any dilution in, the rights of
holders of the SCUs under this Exhibit E and the Partnership Agreement.
(j) All Series J Offered Units tendered to the Company or to
the Operating Partnership, as applicable, in accordance with the exercise of
Series J Exchange Rights shall be delivered to the Company or to the Operating
Partnership, as applicable, free and clear of all Liens and should any Liens
exist or arise with respect to such Units, the Company or the Operating
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Partnership, as applicable, shall be under no obligation to acquire the same
unless, in connection with such acquisition, the Company or the Operating
Partnership, as applicable, has elected to pay such portion of the Series J
Exchange Consideration in the form of cash consideration in circumstances where
such consideration will be sufficient to cause such existing Lien to be
discharged in full upon application of all or a part of such consideration, and
the Company or the Operating Partnership, as applicable, is expressly authorized
to apply such portion of the Series J Exchange Consideration as may be necessary
to satisfy any indebtedness in full and to discharge such Lien in full. In the
event any state or local property transfer tax is payable as a result of the
transfer of Series J Offered Units to the Company, the transferring holder
thereof shall assume and pay such transfer tax.
(k) Subject to the restrictions on transfer set forth in the
Partnership Agreement and Paragraph 8 hereof, the Assignee of any holder of SCUs
may exercise the rights of such holder of SCUs pursuant to this Paragraph 7, and
such holder of SCUs shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such holder's
Assignee. In connection with any exercise of such rights by such Assignee on
behalf of such holder, the Series J Exchange Consideration shall be paid by the
Company or the Operating Partnership. as applicable, directly to such Assignee
and not to such holder.
(l) In the event that the Company shall be a party to any
transaction (including, without limitation, a merger, consolidation or statutory
share exchange with respect to the Common Stock), in each case as a result of
which shares of Common Stock are converted into the right to receive shares of
capital stock, other securities or other property (including cash or any
combination thereof), the Series J Exchange Consideration payable thereafter by
the Company pursuant to clauses (B) and (C) of Paragraph 7(b) in lieu of a share
of Common Stock shall be the kind and amount of shares of capital stock and
other securities and property (including cash or any combination thereof) that
was received upon consummation of such transaction in return for one share of
Common Stock, and the Series J Exchange Consideration payable by the Operating
Partnership pursuant to the last sentence of Paragraph 7(b) shall be adjusted
accordingly; and the Company may not become a party to any such transaction
unless the terms thereof are consistent with the foregoing.
(m) As of the date hereof (i) the Conversion Factor is 1.0 and
(ii) the Common Unit Conversion Factor is 1.0.
(n) The provisions of Article XI and Exhibit D of the
Partnership Agreement shall not apply to the SCUs or to any Common Units
received in exchange for, or upon the conversion of, any SCUs in accordance with
the terms of this Exhibit E. Exhibit F of the Partnership Agreement sets forth
the exchange rights of the Common Units received in exchange for, or upon the
conversion of, SCUs in accordance with the terms of this Exhibit E.
8. Restrictions on Transfer. In addition to Transfers permitted pursuant to
Article IX of the Partnership Agreement, but subject to Section 9.3 of the
Partnership Agreement, the General Partner hereby consents to (i) all Transfers
of SCUs which are described in clauses (a)-(d) of this Paragraph 8 (any such
Transfer, an "Approved Transfer") and (ii) the admission of any transferee of a
SCU pursuant to any Approved Transfer as a Substituted Limited Partner (and the
conditions set forth in Section 9.2 of the Partnership Agreement for such
admission will be deemed satisfied) upon the filing with the Operating
Partnership of (A) a duly executed and acknowledged instrument of assignment
between the transferor and the transferee specifying the SCUs being assigned,
setting forth the intention of the transferor that such transferee succeed to
the transferor's interest as a Limited Partner with respect to the SCUs being
assigned and agreement of the transferee assuming all of the obligations of a
Limited Partner under the Partnership Agreement with respect to such transferred
SCUs accruing from and after the date of transfer, (B) a duly executed and
acknowledged instrument by which the transferee confirms to the Operating
Partnership that it accepts and adopts the provisions of the Partnership
Agreement applicable to a Limited Partner and (C) any other instruments
reasonably required by the General Partner and payment by the transferor of a
transfer fee to the Operating Partnership sufficient to cover the reasonable
expenses of the transfer, if any.
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For the purposes of this Paragraph 8, all of the following
Transfers shall be considered Approved Transfers:
(a) any transfer by an initial holder of any SCU or any
permitted transferee thereof to one or more of the initial holders of
SCUs or to the designated holding entity (as contemplated in the Master
Contribution Agreement) of one or more of the initial holders of SCUs,
which holders and designated holding entities are identified on the
Schedule A hereto (each, an "Initial Holder");
(b) any transfer to any Immediate Family Member of any Initial
Holder or any initial beneficial owner of any interest in any Initial
Holder of SCUs or any Immediate Family Member thereof, or any trust for
the benefit of any Initial Holder or initial beneficial owner of any
interest in any Initial Holder of SCUs or any Immediate Family Member
thereof;
(c) any transfer to any Affiliate of any Initial Holder
or initial beneficial owner of any interest in any Initial Holder of
SCUs or to any charitable organization; and
(d) any pledge by an Initial Holder or any permitted
transferee thereof to an institutional lender as security for a bona
fide obligation of the holder, and any transfer to any such pledgee or
any designee thereof or purchaser therefrom following a default in the
obligation secured by such pledge.
9. Headings of Subdivisions. The headings of the various subdivisions
hereof are for convenience of reference only and shall not affect the
interpretation of any of the provisions hereof.
10. Severability of Provisions. If any rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the SCUs set forth in the Partnership Agreement and
this Exhibit E are invalid, unlawful or incapable of being enforced by reason of
any rule of law or public policy, all other preferences or other rights, voting
powers, restrictions, limitations as to distributions, qualifications or terms
or conditions of redemption of SCUs set forth in the Partnership Agreement which
can be given effect without the invalid, unlawful or unenforceable provision
thereof shall, nevertheless, remain in full force and effect and no rights,
voting powers, restrictions, limitations as to dividends or other distributions,
qualifications or terms or conditions of redemption of the SCUs herein set forth
shall be deemed dependent upon any other provision thereof unless so expressed
therein.
11. No Preemptive Rights. No holder of SCUs shall be entitled to any preemptive
rights to subscribe for or acquire any unissued units of the Operating
Partnership (whether now or hereafter authorized) or securities of the Operating
Partnership convertible into or carrying a right to subscribe to or acquire
units of the Operating Partnership.
IN WITNESS WHEREOF, CBL Holdings I, Inc., solely in its
capacity as the general partner of the Operating Partnership, has caused this
Terms of Series J Special Common Units to be duly executed by its Chief
Financial Officer this 31st day of January, 2001.
CBL HOLDINGS I, INC.
By: /s/ Xxxx X. Xxx
--------------------------
Name: Xxxx X. Xxx
Title: Chief Financial Officer
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Acknowledged and Agreed:
CBL & Associates Properties, Inc.
By: /s/ Xxxx X. Xxx
---------------------------
Name: Xxxx X. Xxx
Title: Chief Financial Officer
133
