Exhibit 10.1
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
June 15, 2005
TABLE OF CONTENTS
1.1.
DEFINITIONS.......................................................3-24
6/15/05 STOCK SPLIT
ACQUISITION COST
ACT
ADDITIONAL PARTNER
ADDITIONAL UNITS
ADJUSTED CAPITAL CCOUNT
ADMINISTRATIVE EXPENSES
AFFILIATE
AGREEMENT
ASSIGNEE
ASSUMED LIABILITY
AUDITED FINANCIAL STATEMENTS
BANKRUPTCY
BASIC DISTRIBUTION AMOUNT
BENEFICIAL OWNERSHIP
CAPITAL ACCOUNT
CAPITAL CONTRIBUTION
CAPITAL STOCK
CERTIICATE OF LIMITED PARTNERSHIP
CLAIM
CLOSING PRICE
CODE
COMMON STOCK
COMMON STOCK AMOUNT
COMMON UNIT CONVERSION FACTOR
COMMON UNIT DISTRIBUTION AMOUNT
CONSTRUCTIVE OWNERSHIP
CONTRIBUTING PARTNER
CONTROL
CONVERSION FACTOR
CURRENT PER SHRE MARKET PRICE
DEMAND NOTICE
DEPRECIATION
ENTITY
ERISA
EXCHANGE NOTICE
FIRST RESTATED AGREEMENT
FLOOR DISTRIBUTION
GENERAL PARTNER
GROSS ASSET VALUE
GROSS INCOME
IMMEDIATE FAMILY
INCENTIVE OPTION
INCENTIVE OPTION AGREEMENT
XXXXXX LIMITED PARTNER REPRESENTATIVE
XXXXXX PROPERTY
JOINT VENTURE PARTNERSHIP
JRI
LIENS
LIMITED PARTNER REPRESENTATIVES
LIMITED PARTNERS
LIQUIDATING TRANSACTION
LIQUIDATING TRUSTEE
L-SCUS
L-SCU BASIC DISTRIBUTION AMOUNT
MAJOR DECISIONS
MAJORITY-IN-INTEREST OF THE LIMITED PARTNERS
MANAGEMENT AGREEMENT
MANAGEMENT COMPANY
MASTER CONTRIBUTION AGREEMENT
MINIMUM GAIN ATTRIBUTABLE TO PARTNER NONRECOURSE DEBT
NET CAPITAL GAIN
NET CASH FLOW
NET FINANCING PROCEEDS
NET INCME OR NET LOSS
NET SALE PROCEEDS
NONRECOURSE DEDUCTIONS
NONRECOURSE LIBABILITIES
OFFERED UNITS
OFFICE BUILDING
OWNERSHIP LIMIT
PARTNER NONRECOURSE DEBT
PARTNER NONRECOURSE DEDUCTIONS
PARTNERS
PARTNERSHIP
PARTNERSHIP MINIMM GAIN
PARTNERSHIP UNITS
PERSON
PREFERRED CONTRIBUTED FUNDS
PREFERRED DISTRIBUTION REQUIREMENT
PREFERRED DISTRIBUTION SHORTFALL
PREFERRED REDEMPTION AMOUNT
PREFERRED REDEMPTION PRICE
PREFERRED STOCK
PREFERRED UNIT DESIGNATION
PREFERRED UNIT ISSUE PRICE
PREFERRED UNITS
PROPERTIES
PROPERTY PARTNERSHIPS
QUALIFIED INDIVIDUAL
REDUCTION FACTOR
REGISTERED AGENT
REGISTERED OFFICE
REGULATIONS
REGULATORY ALLOCATIONS
REIT
REIT EXPENSES
REIT REQUIREMENTS
REQUESTING PARTY
RELATED ISSUE
RESPONDING PARTY
RIGHTS
SAFE HARBOR RATE
SCUS
SEC
SECOND RESTATED AGREEMENT
SECURITIES ACT
SERIES J EXCHANGE NOTICE
SERIES J. EXCHANGE RIGHTS
SERIES J OFFERED UNITS
SERIES L EXCHANGE NOTICE
SERIES L EXCHANGE RIGHTS
SERIES L OFFERED UNITS
SERIES S EXCHANGE NOTICE
SERIES S EXCHANGE RIGHTS
SERIES S OFFERED UNITS
S-SCUS
S-SCU BASIC DISTRIBUTION AMOUNT
STOCK INCENTIVE PLAN
SUBSTITUTED LIMITED PARTNER
TAX ITEMS
TRADING DAY
TRANSFER
1.2. EXHIBITS, ETC.......................................................24
1.3. LIMITED PARTNER ACCEPTANCE..........................................24
ARTICLE II. ORGANIZATION
2.1. CONTINUATION........................................................26
2.2. NAME................................................................27
2.3. CHARACTER OF THE BUSINESS...........................................27
2.4. LOCATION OF THE PRINCIPAL PLACE OF BUSINESS.........................27
2.5. REGISTERED AGENT AND REGISTERED OFFICE..............................27
ARTICLE III. TERM
3.1. COMMENCEMENT........................................................27
3.2. DISSOLUTION.........................................................27
ARTICLE IV. CONTRIBUTIONS TO CAPITAL
4.1. PARTNERS............................................................28
4.2. GENERAL PARTNER CAPITAL CONTRIBUTION................................28
4.3. LIMITED PARTNER CAPITAL CONTRIBUTIONS...............................29
4.4. ISSUANCE OF ADDITIONAL UNITS........................................30
4.5......ADMISSION OF ADDITIONAL PARTNERS....................................34
4.6. STOCK INCENTIVE PLAN................................................34
4.7. NO THIRD PARTY BENEFICIARY..........................................34
4.8. NO INTEREST; NO RETURN..............................................35
4.9. ADJUSTMENT UPON CONVERSION OF PREFERRED STOCK.......................35
ARTICLE V. REPRESENTATIONS, WARRANTIES AND COVENANTS
5.1. REPRESENTATIONS AND WARRANTIES......................................35
5.2. COVENANTS...........................................................36
ARTICLE V. ALLOCATIONS, DISTRIBUTIONS, AND OTHER TAX AND ACCOUNTING MATTERS
6.1. ALLOCATIONS.........................................................36
6.2......DISTRIBUTIONS.......................................................36
6.3. BOOKS OF ACCOUNT....................................................43
6.4. REPORTS.............................................................43
6.5. AUDITS..............................................................44
6.6. TAX ELECTIONS AND RETURNS...........................................44
6.7. TAX MATTERS PARTNER.................................................44
ARTICLE VII. RIGHTS, DUTIES AND RESTRICTIONS
OF THE GENERAL PARTNER
7.1. EXPENDITURES BY PARTNERSHIP.........................................45
7.2. POWERS AND DUTIES OF GENERAL PARTNER................................46
7.3. MAJOR DECISIONS.....................................................49
7.4. ACTIONS WITH RESPECT TO CERTAIN DOCUMENTS...........................50
7.5. RELIANCE BY THIRD PARTIES...........................................50
7.6. COMPANY PARTICIPATION...............................................51
7.7. PROSCRIPTIONS.......................................................51
7.8. ADDITIONAL PARTNERS.................................................51
7.9. TITLE HOLDER........................................................52
7.10. COMPENSATION OF THE GENERAL PARTNER.................................52
7.11. WAIVER AND INDEMNIFIATION...........................................52
7.12. LIMITED PARTNER REPRESENTATIVES.....................................53
7.13. OPERATION IN ACCORDANCE WITH REIT REQUIREMENTS......................54
7.14. TRANSACTIONS WITH AFFILIATES........................................55
7.15. OTHER MATTERS CONCERNING THE GENERAL PARTNER........................55
ARTICLE VIII. DISSOLUTION, LIQUIDATION AND WINDING-UP
8.1. ACCOUNTING..........................................................56
8.2. DISTRIBUTION ON DISSOLUTION.........................................57
8.3. TIMING REQUIREMENTS.................................................57
8.4. SALE OF PARTNERSHIP ASSETS..........................................57
8.5. DISTRIBUTIONS IN KIND...............................................58
8.6. DOCUMENTATION OF LIQUIDATION........................................58
8.7. LIABILITY OF THE LIQUIDATING TRUSTEE................................58
ARTICLE IX. TRANSFER OF PARTNERSHIP UNITS
9.1. GENERAL PARTNER TRANSFER............................................59
9.2. TRANSFERS BY LIMITED PARTNERS.......................................60
9.3. RESTRICTIONS ON TRANSFER............................................63
ARTICLE X. RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
10.1. NO PARTICIPATION IN MANAGEMENT......................................65
10.2. BANKRUPTCY OF A LIMITED PARTNER.....................................66
10.3. NO WITHDRAWAL.......................................................67
10.4. DUTIES AND CONFLICTS................................................67
10.5. LIMITED LIABILITY...................................................67
ARTICLE XI. GRANT OF RIGHTS TO LIMITED PARTNERS
11.1. GRANT OF RIGHTS.....................................................67
11.2 TERMS OF RIGHTS.....................................................68
ARTICLE XII. INDEMNIFICATION
12.1. INDEMNIFICATION OF THE LIMITED PARTNERS................................69
12.2 INDEMNIFICATION OF THE GENERAL PARTNER, THE COMPANY
AND OTHERS.............................................................69
ARTICLE XIII. ARBITRATION OF DISPUTES
13.1. ARBITRATION.........................................................69
13.2. PROCEDURES..........................................................70
13.3. BINDING CHARACTER...................................................71
13.4 EXCLUSIVITY.........................................................71
13.5 NO ALTERATION OF AGREEMENT..........................................71
ARTICLE XIV. GENERAL PROVISIONS
14.1. NOTICES.............................................................71
14.2. SUCCESSOR...........................................................72
14.3. EFFECT AND INTERPRETATION...........................................72
14.4. COUNTERPARTS........................................................72
14.5. PARTNERS NOT AGENTS.................................................72
14.6. ENTIRE UNDERSTANDING, ETC...........................................73
14.7. AMENDMENTS..........................................................78
14.8. SEVERABILITY........................................................78
14.9. PRONOUNTS AND HEADINGS..............................................78
14.10. ASSURANCES..........................................................78
14.11. EXPENSES............................................................78
14.12. WAIVER OF PARTITION.................................................78
ATTACHMENTS:
1-A, 10B AND 1-C - LIMITED PARTER ACCEPTANCE FORMS
EXHIBITS
A LIST OF PARTNERS, PERCENTAGE INTEREST, SHARE EQUIVALENTS
B PREFERRED UNIT DESIGNATIONS
C ALLOCATIONS
D RIGHTS TERMS
E TERMS OF SCUS
F EXCHANGE RIGHTS OF COMMON UNITS ISSUED IN EXCHANGE FOR OR UPON
REDEMPTION OF SCUS
G XXXXXX LIMITED PARTNER REPRESENTATIVE
H TERMS OF S-SCUS
I EXCHANGE RIGHTS OF COMMON UNITS ISSUED IN EXCHANGE FOR OR UPON
REDEMPTION OF S-SCUS
J TERMS OF L-SCUS
THE PARTNERSHIP UNITS REFERRED TO IN THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS. ACCORDINGLY, NO PARTNERSHIP UNITS MAY BE RESOLD, PLEDGED,
HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUBSEQUENTLY REGISTERED UNDER THE
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS AN EXEMPTION
FROM REGISTRATION IS AVAILABLE, AND UNLESS THE OTHER TRANSFER RESTRICTIONS
CONTAINED HEREIN HAVE BEEN SATISFIED. REFERENCE IS MADE TO ARTICLE IX OF THIS
AGREEMENT FOR PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE OR OTHER
TRANSFER OF THESE PARTNERSHIP UNITS.
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made
and entered into as of the 15th day of June, 2005 by and among CBL Holdings I,
Inc., a Delaware corporation, and those certain Persons identified on Exhibit A
attached hereto as a Limited Partner.
W I T N E S S E T H:
WHEREAS, CBL & Associates Limited Partnership (the "Partnership") was
formed by that certain Agreement of Limited Partnership dated October 29, 1993,
as amended and restated in its entirety by that certain Amended and Restated
Agreement of Limited Partnership dated November 3, 1993, and further amended by
that certain Modification No. One to the Amended and Restated Agreement of
Limited Partnership dated March 31, 1997 and by the Modification No. Two to the
Amended and Restated Agreement of Limited Partnership dated February 19, 1998,
(together, the "First Restated Agreement"); and
WHEREAS, the First Restated Agreement was amended in its entirety and
the parties entered into the Second Amended and Restated Agreement of Limited
Partnership dated June 30, 1998, as amended by the First Amendment dated January
1
31, 2001, the Second Amendment dated February 15, 2002, the Third Amendment
dated July 28, 2004 and the Fourth Amendment dated June 1, 2005 (all of the
foregoing constituting and being herein referred to as the "Second Restated
Agreement"); and
WHEREAS, on May 10, 2005, the board of directors of CBL & Associates
Properties, Inc., a Delaware corporation (herein referred to as the "Company")
declared a two-for-one stock split of the Company's common stock (the "6/15/05
Stock Split") and declared a stock dividend of one share of common stock for
each outstanding share of the Company's common stock as the means through which
to effect the 6/15/05 Stock Split and such stock dividend was paid to the
Company's common shareholders on June 15, 2005; and
WHEREAS, on June 15, 2005 and due to the structure of the Partnership
and the 6/15/05 Stock Split, the Partnership distributed to its Partners holding
Common Units, SCUs, S-SCUs and L-SCUs an additional Partnership Unit
corresponding to the type of Partnership Unit held by such Partner at the time;
and
WHEREAS, Section 14.7 of the Second Restated Agreement provides that
the General Partner shall have the power, without consent of any Limited
Partner, to amend the Second Restated Agreement as may be required to facilitate
or implement, inter alia, any change that does not adversely affect the Limited
Partners in any material respect, to cure any ambiguity, to correct or
supplement any defective provision in the Second Restated Agreement, or to make
other changes with respect to matters arising under the Second Restated
Agreement that will not be inconsistent with any other provision of the Second
Restated Agreement; and
WHEREAS, the General Partner has determined to amend the Second
Restated Agreement in its entirety as set forth in this Third Amended and
Restated Agreement for the purposes of (i) reflecting the 6/15/05 Stock Split
2
and corresponding distribution of Partnership Units as described above and (ii)
incorporating the terms and provisions of the documents constituting the Second
Restated Agreement into one agreement as set forth herein (the "Third Restated
Agreement").
NOW, THEREFORE, the General Partner hereby amends and restates the
Second Restated Agreement in its entirety as follows:
ARTICLE I.
Definitions, Etc.
1.1. Definitions. Except as otherwise herein expressly provided the
following terms and phrases shall have the meanings set forth below:
"6/15/05 Stock Split" shall mean the stock split referred to in the
Whereas clauses above as declared by the Company's board of directors on May 10,
2005 and effected on June 15, 2005.
"Accountants" shall mean the firm or firms of independent certified
public accountants selected by the General Partner on behalf of the Partnership
to audit the books and records of the Partnership (and, to the extent provided
under the applicable Joint Venture Partnership agreement, the Joint Venture
Partnerships) and to prepare statements and reports in connection therewith.
"Acquisition Cost" shall have the meaning set forth in Section 4.2(b)
hereof.
"Act" shall mean the Revised Uniform Limited Partnership Act as enacted
in the State of Delaware, and as the same may hereafter be amended from time to
time.
"Additional Partner" shall have the meaning set forth in Section 4.4(a)
hereof. "Additional Units" shall have the meaning set forth in Section
4.4(a) hereof.
"Adjusted Capital Account Deficit" shall mean with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account as of
3
the end of the relevant fiscal year, after giving effect to the following
adjustments:
(i) Such Capital Account shall be deemed to be increased by
any amounts which such Partner is obligated to restore to the
Partnership (pursuant to this Agreement or otherwise) or is deemed to
be obligated to restore pursuant to the second to last sentence of
Regulation Section 1.704-2(g)(i) and Section 1.704-2(i)(5) (relating to
allocations attributable to nonrecourse debt); and
(ii) Such Capital Account shall be deemed to be decreased by
the items described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6).
The foregoing definition of Adjusted Capital Deficit is intended to comply with
the provisions of Regulation Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted and applied consistently therewith.
"Administrative Expenses" shall mean (i) all administrative and
operating costs and expenses incurred by the Partnership, (ii) all
administrative, operating and other costs and expenses including any deficits
incurred by the Property Partnerships and to be paid, advanced or reimbursed by
the partnership pursuant to the partnership agreements of such Property
Partnerships, (iii) those administrative costs and expenses of the Company and
the General Partner, including salaries paid to officers of the Company and the
General Partner, and accounting and legal expenses undertaken by the Company and
the General Partner on behalf or for the benefit of the Partnership, (iv) all
amounts paid or advanced by the Partnership to the Management Company pursuant
to the Management Agreement, and (v) to the extent not included in clause (iii)
above, REIT Expenses.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of whom are relevant for purposes of any of the provisions
of this Agreement), (i) any member of the Immediate Family of such Partner; (ii)
any Entity in which such Person owns of record and beneficially a majority of
the capital or economic interests; or (iii) any Entity which directly or
indirectly through one or more intermediaries, Controls, is Controlled by, or is
under common Control with, such Partner.
4
"Agreement" shall mean this Third Amended and Restated Agreement of
Limited Partnership, as originally executed and as hereafter amended, modified,
supplemented or restated from time to time as the context requires.
"Assignee" shall mean a Person to whom one or more Partnership Units
have been transferred, but who has not become a Substituted Limited Partner.
"Assumed Liability" shall mean any liability of a Limited Partner or an
Affiliate thereof assumed by the Partnership pursuant to Section 13.1 of the
First Restated Agreement.
"Audited Financial Statements" shall mean financial statements (balance
sheet, statement of income, statement of partners' equity and statement of cash
flows) prepared in accordance with generally accepted accounting principles and
accompanied by an independent auditor's report containing an opinion thereon.
"Bankruptcy" shall mean, with respect to any Person, (i) the
commencement by such Person of any proceeding seeking relief under any provision
or chapter of the federal Bankruptcy Code, U.S.C. ss.101 et. seq., as the same
may be amended from time to time, or any other federal or state law relating to
insolvency, bankruptcy or reorganization, (ii) an adjudication that such Person
is insolvent or bankrupt, (iii) the entry of an order for relief under the
federal Bankruptcy Code with respect to such Person, (iv) the filing of any such
petition or the commencement of any such case or proceeding against such Person,
unless such petition and the case or proceeding initiated thereby are stayed or
dismissed within ninety (90) days from the date of such filing, (v) the filing
of an answer by such Person admitting the allegations of any such petition, (vi)
the appointment of a trustee, receiver or custodian for all or substantially all
of the assets of such Person unless such appointment is stayed, vacated or
dismissed within ninety (90) days from the date of such appointment, (vii) the
5
execution by such Person of a general assignment for the benefit of creditors,
(viii) the levy, attachment, execution, or other seizure of substantially all of
the assets of such Person where such seizure is not discharged within thirty
(30) days thereafter, (ix) the admission by such Person in writing of its
inability generally to pay its debts as they mature or that it is generally not
paying its debts as they become due, or (x) the taking of any corporate or
partnership action in connection with any of the foregoing.
"Basic Distribution Amount" shall mean $0.725625 (but shall mean
$0.3628125 after the 6/15/05 Stock Split); provided, however, that such amount
will be adjusted approximately to account for any further unit. splits,
combinations or other similar events with respect to the SCUs.
"Beneficial Ownership" shall have the meaning set forth in the
certificate of incorporation of the Company.
"Capital Account" shall mean, with respect to any partner, the separate
"book" account which the Partnership shall establish and maintain for such
Partner in accordance with Section 704(b) of the Code and Section 1.704-1(b)
(2) (iv) of the Regulations and such other provisions of Section 1.704-1(b) of
the Regulations that must be complied with in order for the Capital Accounts
to be determined in accordance with the provisions of said Regulations. In
furtherance of the foregoing, the Capital Accounts shall be maintained in
compliance with Section 1.704-1 (b) (2) (iv) of the Regulations; and the
provisions hereof shall be interpreted and applied in a manner consistent
therewith. In the event that a Partnership Unit is transferred in accordance
with the terms of this Agreement, the Capital Account, at the time of the
transfer, of the transferor attributable to the transferred interest shall carry
over to the transferee. For the avoidance of doubt, distributions pursuant
to an exercise for an option set forth in a JRI Option Agreement entered into
in connection with the Master Contribution Agreement shall not result in
6
any reduction in Capital Accounts.
"Capital Contribution" shall mean, with respect to any Partner, the
amount of money and the initial Gross Asset Value of any property other than
money contributed to the Partnership with respect to the Partnership Units held
by such Partner (net of liabilities to which such property is subject).
"Capital Stock" means Common Stock, Preferred Stock and other classes
and series of capital stock issued from time to time by the Company.
"Certificate of Limited Partnership" shall mean the Certificate of
Limited Partnership establishing the Partnership, filed with the office of the
Secretary of State of the State of Delaware on July 16, 1993, as it may be
amended from time to time in accordance with the terms of this Agreement and the
Act.
"Claim" shall have the meaning set forth in Section 12.1 hereof.
"Closing Price" on any date shall mean the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Common
Stock is not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System or, if such system is no
7
longer in use, the principal other automated quotations system that may then be
in use or, if the Common Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Common Stock as such person is selected from
time to time by the General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Common Stock" shall mean the shares of the common stock, par value
$.01 per share, of the Company.
"Common Stock Amount" shall mean, with respect to any number of Common
Units, SCUs, S-SCUs or L-SCUs, the number of shares of Common Stock equal to
such number of Common Units, SCUs, S-SCUs or L-SCUs, as the case may be,
multiplied by the Conversion Factor; provided, however, that in the event that
the Company issues to all holders of Common Stock rights, options, warrants
or convertible or exchangeable securities entitling the shareholders to
subscribe for or purchase additional Common Stock, or any other securities
or property of the Company, the value of which is not included in the first
sentence of the definition of Closing Price of the shares of Common Stock
(collectively, "additional rights"), other than a right to receive a divided
or other distribution of Common Stock that corresponds to Common Units
issued to the Company pursuant to a Distribution of Common Units in
Lieu of Cash, then the Common Stock Amount shall also include, other than with
respect to any Common Units, SCUs, S-SCUs or L-SCUs "beneficially owned" by an
"Acquiring Person" (as such terms are defined in the Company's Rights Agreement,
dated as of April 30, 1999, as amended and as it may be further amended from
time to time, and any successor agreement thereto), such additional rights that
a holder of that number of shares of Common Stock would be entitled to receive.
8
"Common Unit Conversion Factor" shall mean 1.0, provided, that, in the
event that the 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, SCUs, S-SCUs and L-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, S-SCUs and L-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.
"Common Unit Distribution Amount" shall mean the product of (i) the
quarterly distribution paid with respect to one Common Unit for that quarter
pursuant to Section 6.2(a)(v) hereof multiplied by (ii) Common Unit Conversion
Factor.
9
"Common Units" shall mean the ownership interest of Partner in the
Partnership from time to time, which entitles a Partner to the allocations
specified in Section 6 hereof and all distributions from the Partnership, and
its rights of management, consent, approval, or participation, if any, as
provided in this Agreement. The number of Common Units held by each Partner the
date hereof and the percentage of the total number of outstanding Units
represented thereby is as set forth opposite such Partner's name on Exhibit A
hereto. Common Units do not include Preferred Units. As the context may require
herein, Common Units may include the SCUs, S-SCUs and L-SCUs.
"Company" shall mean CBL & Associates Properties, Inc., a Delaware
corporation, and any successor entity thereto.
"Consent of the Limited Partners" shall mean the written consent
Majority-In-Interest of the Limited Partners, which consent shall be
obtained prior to the taking of any action for which it is required by this
Agreement and may be given or withheld by a Majority-In-Interest of the
Limited Partners, unless otherwise expressly provided herein, in their sole
and absolute discretion.
"Constructive Ownership" shall have the meaning set forth in the
certificate of incorporation of the Company.
"Contributed Property" shall have the meaning set forth in
Section 4.2(b) hereof.
"Contributing Partner" shall have the meaning set forth in Section
4.4(b) hereof.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority over
10
an Entity. In the case of a limited partnership, the
sole general partner, all of the general partners to the extent each has equal
management control and authority, or the managing general partner or managing
general partners thereof shall be deemed to have control of such partnership
and, in the case of a trust, any trustee thereof or any Person having the right
to select any such trustee shall be deemed to have control of such trust.
"Conversion Factor" shall mean 1.0, provided that in the event that the
Company (i) pays a dividend on its outstanding shares of Common Stock in shares
of Common Stock or makes a distribution to all holders of its outstanding Common
Stock in shares of Common Stock (in either case other than a dividend or other
distribution of shares of Common Stock that corresponds to Common Units issued
to the Company pursuant to a Dividend of Common Units in Lieu of Cash), (ii)
subdivides or splits its outstanding shares of Common Stock, or (iii) combines
or reverse splits its outstanding shares of Common Stock into a smaller number
of shares of Common Stock (in each case, without making a comparable dividend,
distribution, subdivision, split, combination or reverse split with respect to
the Common Units, the SCUs, S-SCUs or L-SCUs), the Conversion Factor in effect
immediately preceding such event shall be adjusted by multiplying the Conversion
Factor by a fraction, the numerator of which shall be the number of shares of
Common Stock issued and outstanding on the record date for such dividend,
distribution, subdivision, split, combination or reverse split (assuming for
such purposes that such dividend, distribution, subdivision, split, combination
or reverse split occurred as of such time), and the denominator of which shall
be the actual number of shares of Common Stock (determined without the above
assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision, split, combination or reverse split. Any adjustment
to the Conversion Factor shall become effective immediately after the record
11
date for such event in the case of the dividend or distribution of the effective
date in the case of a subdivision, split, combination or reverse split.
"Current Per Share Market Price" on any date shall mean the average of
the Closing Price for the five consecutive Trading Days ending on and including
such date (or if such date is not a Trading Day, ending on the immediately
preceding Trading Day).
"Demand Notice" shall have the meaning set forth in Section 13.2
hereof.
"Depreciation" shall mean, with respect to any asset of the Partnership
for any fiscal year or other period, the depreciation, depletion or
amortization, as the case may be, allowed or allowable for federal income tax
purposes in respect of such asset for such fiscal year or other period;
provided, however, that if there is a difference between the Gross Asset Value
and the adjusted tax basis of such asset, Depreciation shall mean "book
depreciation, depletion or amortization" as determined under Section 1.704-l (b)
(2) (iv) (g) (3) of the Regulations.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, limited liability company, trust, business trust,
cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time (or any corresponding provisions of succeeding
laws).
"Exchange Notice" shall have the meaning set forth in Schedule 1 to
Exhibit D.
"First Restated Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Floor Distribution" shall mean, with respect to any quarter, $0.4375
(but shall mean $0.21875 after the 6/15/05 Stock Split).
"General Partner" shall mean CBL Holdings I, Inc., a Delaware
corporation, its duly admitted successors and assigns and any other Person who
is a general partner of the Partnership
12
at the time of reference thereto.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes, except
as follows:
(a) the Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such
asset as determined under Article IV;
(b) if the General Partner reasonably determines that an
adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners, the Gross Asset Values of all Partnership
assets shall be adjusted to equal their respective gross fair market
values, as reasonably determined by the General Partner, as of the
following times:
(i) a Capital Contribution (other than a de
minimis Capital Contribution) to the Partnership by a new or
existing Partner as consideration for Partnership Units;
(ii) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership property
as consideration for the redemption of Partnership Units; and
(iii) the liquidation of the Partnership within
the meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations;
(c) the Gross Asset Values of Partnership assets distributed
to any Partner shall be the gross fair market values of such assets
(taking Section 7701(g) of the Code into account) as reasonably
determined by the General Partner as of the date of distribution; and
(d) the Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Sections 734(b) or 743(b) of the Code,
but only to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Section 1.704-1(b) (2) (iv)
(m) of the Regulations; provided, however, that Gross Asset Values
shall not be adjusted pursuant to this paragraph to the extent that the
General Partner reasonably determines that an adjustment pursuant to
subparagraph (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to
this subparagraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss. Any
13
adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts; as for
the manner in which such adjustments are allocated to the Capital Accounts, see
subparagraph (c) of the definition of Net Income and Net Loss in the case of
adjustment by Depreciation, and subparagraph (d) of said definition in all other
cases.
"Gross Income" shall mean, for each fiscal year or other applicable
period, an amount equal to the Partnership's gross income for such year or
period as determined for federal income tax purposes with the following
adjustments: (a) by including as an item of gross income any tax-exempt income
received by the Partnership; (b) gain resulting from any disposition of
Partnership property with respect to which gain recognized for federal income
tax purposes shall be computed by reference to the Gross Asset Value of such
property rather than its adjusted tax basis; (c) in the event of an adjustment
of the Gross Asset Value of any Partnership asset which requires that the
Capital Accounts of the Partnership be adjusted pursuant to Regulation Section
1.704 l(b)(2)(iv)(e), (f) or (m), the amount of such positive adjustment is to
be taken into account additional Gross Income pursuant to Exhibit C; and (d)
excluding any items specifically allocated pursuant to Section 2 of Exhibit C.
"Immediate Family" shall mean, with respect to any Person, such
Person's spouse, parents, or descendants by blood or adoption.
"Incentive Option" means an option to purchase Common Stock granted
under the Stock Incentive Plan.
"Incentive Option Agreement" means the form of Incentive Option
Agreement to be used under the Stock Incentive Plan.
"Xxxxxx Limited Partner Representative" shall have the meaning set
forth in Section 7.12 hereof.
14
"Xxxxxx Property" shall have the meaning set forth in Section 6.2(d)(1)
hereof.
"Joint Venture Partnership" shall mean any Property Partnership in
which the Partnership and the Company do not own, directly or indirectly, 100%
of the ownership interests in the aggregate.
"JRI" shall mean Xxxxxx Realty Investors Limited partnership, a
Delaware limited partnership.
"Liens" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, pledges, options, rights of first
offer or first refusal and any other similar encumbrances of any nature
whatsoever.
"Limited Partner Representative" shall mean, with respect to any
Limited Partner, the representative appointed by such Limited Partner pursuant
to the first sentence of Section 7.12 or, if none, such Limited Partner.
"Limited Partners" shall mean (i) those Persons listed under the
heading "Limited Partners" on Exhibit A hereto in their respective capacities as
limited partners of the Partnership, their permitted successors and assigns and
(ii) all Additional Partners and Substituted Limited Partners.
"Liquidation Transaction" shall mean any sale of assets of the
Partnership in contemplation of, or in connection with, the liquidation of the
Partnership.
"Liquidating Trustee" shall mean the General Partner or, if the General
Partner is unable or unwilling to serve in such capacity, such other individual
or Entity which, with the Consent of the Limited Partners or otherwise under the
Act, shall be charged with winding up the Partnership.
"L-SCUs" shall have the meaning set forth in Exhibit J.
15
"L-SCU Basic Distribution Amount" shall mean, with respect to an L-SCU,
$1.5144 (but shall mean $.7572 after the 6/15/05 Stock Split); provided,
however, that such amount will be adjusted appropriately to account for any
further unit splits, combinations or other similar events with respect to the
L-SCUs.
"Major Decisions" shall have the meaning set forth in Section 7.3
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the voting
rights associated with the then outstanding Partnership Units which are entitled
to vote on the matter with respect to which such calculation is made, as a
class.
"Management Agreement" shall mean the Management Agreement dated
November 3, 1993 between the Management Company and the Partnership, as such may
be amended or supplemented.
"Management Company" shall mean CBL & Associates Management, Inc., a
Delaware corporation, or its permitted successors or assigns.
"Master Contribution Agreement" shall mean the Master Agreement dated
as of September 25, 2000, among the Company, the 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, modified or
supplemented.
"Minimum Gain Attributable to Partner Nonrecourse Debt" shall mean
"partner nonrecourse debt minimum gain" as determined in accordance with
Regulation Section 1.704-2(i)(2).
16
"Net Capital Gain" shall mean, for any taxable year, the excess of
recognized gains with respect to dispositions of Property over recognized losses
with respect to dispositions of Property over recognized losses with respect to
dispositions of Property, in each case as determined by reference to Gross Asset
Value.
"Net Cash Flow" shall mean, with respect to any fiscal period of the
Partnership, the excess, if any, of "Receipts" over "Expenditures." For purposes
hereof, the term "Receipts" means the sum of all cash receipts of the
Partnership from all sources for such period (including Net Sale Proceeds and
Net Financing Proceeds but excluding Capital Contributions) and any amounts held
as reserves as of the last day of such period which the General Partner
reasonably deems to be in excess of necessary reserves as determined below. The
term "Expenditures" means the sum of (a) all cash expenses of the Partnership
for such period, (b) the amount of all payments of principal of, premium, if
any, and interest on account of any indebtedness of the Partnership including
payments of principal of, premium, if any, and interest on account of General
Partner loans, on amounts due on such indebtedness during such period, and (c)
such additions to cash reserves as of the last day of such period as the General
Partner deems necessary or appropriate for any capital, operating or other
expenditure, including, without limitation, contingent liabilities, but the term
"Expenditures" shall not include any expense paid from a cash reserve previously
established by the Partnership.
"Net Financing Proceeds" shall mean the cash proceeds received by the
Partnership in connection with any borrowing or refinancing of borrowing by or
on behalf of the Partnership or by or on behalf of any Property Partnership
(whether or not secured), after deduction of all costs and expenses incurred by
the Partnership or the Property Partnership in connection with such borrowing,
and after deduction of that portion of such proceeds used to (i) acquire the
Property with respect to which any such borrowing was specifically incurred, and
(ii) repay any other indebtedness of the Partnership or Property Partnerships
with respect to which any such refinancing or borrowing was specifically
incurred, or any interest or premium thereon. For this
17
purpose, cash proceeds
received by a Joint Venture Partnership shall not be deemed to be received or
available to the Partnership until (i) the distribution of such proceeds is
actually received by the Partnership, or (ii) under the terms of the Joint
Venture Partnership's partnership agreement, the Partnership controls the timing
of the Joint Venture Partnership's distributions and then only to the extent of
the partnership's entitlement to such distributions.
"Net Income or Net Loss" shall mean, for each fiscal year or other
applicable period an amount equal to the Partnership's net income or loss for
such year or period as determined for federal income tax purposes by the
Accountants, determined in accordance with Section 703 (a) of the code (for this
purpose, all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703 (a) of the Code shall be included in taxable
income or loss), with the following adjustments: (a) by including as an item of
gross income any tax-exempt income received by the Partnership; (b) by treating
as a deductible expense any expenditure of the Partnership described in Section
705 (a) (2) (B) of the Code (including amounts paid or incurred to organize the
Partnership, unless an election is made pursuant to Code Section 709 (b) or to
promote the sale of interests in the Partnership and by treating deductions for
any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267 (a) (i) or Section 707 (b) of the
Code as expenditures described in Section 705 (a) (2) (B) of the Code; (c) in
lieu of depreciation, depletion, amortization, and other cost recovery
deductions taken into account in computing total income or loss, there shall be
taken into account Depreciation; (d) gain or loss resulting from any disposition
of Partnership property with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross Asset
Value of such property rather than its adjusted tax basis; (e) in the event of
an adjustment of the Gross Asset Value of any Partnership asset which requires
that the Capital Accounts of the Partnership be adjusted pursuant to Regulation
Section 1.704-l (b) (2) (iv) (e) , (f) and (m), the amount of such adjustment is
to be taken into account as additional Net Income or Net Loss pursuant to
Exhibit C; and (f) excluding any items specially allocated pursuant to Section 2
of Exhibit C. Once an item of income, gain, loss or deduction has been
18
included in the initial computation of Net Income or Net Loss or is subject to
the special allocation rules in Exhibit C, Net Income or net Loss shall be
recomputed without regard to such item.
"Net Sale Proceeds" means the cash proceeds received by or available to
the Partnership in connection with a sale or condemnation of, or casualty of or
other capital event with respect to, any asset by or on behalf of the
Partnership or by or on behalf of a Property Partnership, after deduction of any
costs or expenses incurred by the Partnership or a Property Partnership with
respect to, or payable specifically out of the proceeds of, such transaction
(including, without limitation, any repayment of any indebtedness required to be
repaid as a result of such sale together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person in connection with a sale, including to a Partner or its
Affiliates). For this purpose, cash proceeds received by a Joint Venture
Partnership shall not be deemed to be received or available to the Partnership
until (i) the distribution of such proceeds is actually received by the
Partnership, or (ii) under the terms of the Joint Venture Partnership's
partnership agreement, the Partnership controls the timing of the Joint Venture
Partnership's distributions and then only to the extent of the Partnership's
entitlement to such distributions.
"Nonrecourse Deductions" shall have the meaning set forth in Sections
1.704-2(b) (1) and (c) of the Regulations.
"Nonrecourse Liabilities" shall have the meaning set forth in Section
1.704-2(b) (3) of the Regulations.
"Offered Units" shall have the meaning set forth in Exhibit D.
"Office Building" shall mean the office building known as CBL Center
located at 0000 Xxxxxxxx Xxxxx Xxxxxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000.
"Ownership Limit" shall have the meaning set forth in the certificate
of incorporation of the Company, as the same may be modified by the board of
directors of the Company as permitted therein.
19
"Partner Nonrecourse Debt" shall mean any nonrecourse indebtedness of
the Partnership that is loaned or guaranteed by any Partner and/or is treated as
"partner nonrecourse debt" under Section 1.704-2(b) (4) of the Regulations.
"Partner Nonrecourse Deductions" shall have the meaning set forth in
Section 1.704-2(i) (2) of the Regulations.
"Partners" shall mean the General Partner and the Limited Partners,
their duly admitted successors or assigns or any Person who is a partner of
the Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership hereby constituted, as
such limited partnership may from time to time be constituted.
"Partnership Minimum Gain" shall have the meaning set forth in Section
1.704-2(b) (2) of the Regulations.
"Partnership Units" shall mean the Common Units, the Preferred Units,
the SCUs the S-SCUs and the L-SCUs.
"Person" shall mean any individual or Entity.
"Preferred Contributed Funds" shall have the meaning set forth in
Section 4.4(b) hereof.
"Preferred Distribution Requirement" shall have the meaning set
forth in Section 4.4(b) hereof.
"Preferred Distribution Shortfall" shall have the meaning set forth
in Section 6.2(a) (i).
"Preferred Redemption Amount" shall mean, with respect to any class or
series of Preferred Units, the sum of (i) the amount of any accumulated
Preferred Distribution Shortfall with respect to such class or series of
Preferred Units, (ii) the Preferred Distribution Requirement with respect to
such class or series of Preferred Units to the date of redemption and (iii)
the Preferred Redemption Price indicated in the Preferred Unit Designation with
respect to such class or series of Preferred Units.
20
"Preferred Redemption Price" shall have the meaning set forth in
Section 4.4(b) hereof.
"Preferred Stock" shall mean any class of equity securities of the
Company now or hereafter authorized or reclassified, other than the Common
Stock, having dividend rights that are superior or prior to dividends payable on
the Common Stock.
"Preferred Unit Designation" shall have the meaning set forth in
Section 4.4(b) hereof.
"Preferred Unit Issue Price" shall mean the amount of the funds
contributed or deemed to have been contributed by the relevant Partner, in
exchange for the preferred Units.
"Preferred Units" shall mean interests in the Partnership issued
pursuant to Section 4.4 hereof. The holder of Preferred Units shall have such
rights to the allocations of Net Income or Net Loss as specified in Section 6.1
hereof and to distributions pursuant to Section 6.2 hereof, but shall not, by
reason of its ownership of such Preferred Units, be entitled to participate in
the management of the Partnership or to consent to or approve any action which
is required by the Act or this Agreement to be approved by any or all of the
Partners.
"Properties" or "Property" shall mean any real property in which the
Partnership, directly or indirectly, holds or acquires ownership of a fee,
mortgage or leasehold interest.
"Property Partnerships" shall mean and include any partnership or other
Entity in which the Partnership is or becomes a partner or other equity
participant and which is formed for the purpose of acquiring, developing or
owning a Property or a proposed Property.
"Qualified Individual" shall have the meaning set forth in Section
13.2(b) hereof.
"Reduction Factor" shall mean the lesser of (i) the quotient of the
Common Unit Distribution Amount for such quarter divided by the Floor
Distribution and (ii) one.
"Registered Agent" shall have the meaning set forth in Section 2.5
hereof.
"Registered Office" shall have the meaning set forth in Section 2.5
hereof.
21
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code; as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Regulatory Allocations" shall have the meaning set forth in Section 2
of Exhibit C.
"REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to the
formation and continuity of existence of the Company and the General Partner,
including taxes (other than the Company's and the General Partner's federal and
state income and franchise taxes), fees and assessments associated therewith,
any and all costs, expenses or fees payable to any director or trustee of the
Company; the General Partner or any subsidiary of either the Company or the
General Partner, (ii) costs and expenses relating to any offer or registration
of securities by the Company and all statements, reports, fees and expenses
incidental thereto, including underwriting discounts and selling commissions
applicable to any such offer of securities, (iii) costs and expenses associated
with the preparation and filing of any periodic reports by the Company under
federal, state or local laws or regulations including filings with the SEC, (iv)
costs and expenses associated with compliance by the Company and the General
Partner with laws, rules and regulations promulgated by any regulatory body,
including the SEC, and (v) all other operating or administrative costs of the
Company and the General Partner incurred in the ordinary course of its business
on behalf of the partnership.
"REIT Requirements" shall have the meaning set forth in Section 6.2
(d)(1) hereof.
"Requesting Party" shall have the meaning set forth in Section 13.2(a)
hereof.
"Related Issue" shall mean, with respect to a class or series of
Preferred Units, the class or series of Preferred Stock the sale of which
directly or indirectly provided a Partner with the proceeds to contribute to the
Partnership in exchange for such Preferred Units.
"Responding Party" shall have the meaning set forth in Section 13.2(b)
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
22
"Safe Harbor Rate" shall have the meaning set forth in Section
6.2(f) hereof.
"SCUs" shall have the meaning set forth in Exhibit E.
"SEC" shall mean the Securities and Exchange Commission.
"Second Restated Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series J Exchange Notice" shall have the meaning set forth in
Exhibit E
"Series J Exchange Rights" shall have the meaning set forth in Exhibit
E.
"Series J Offered Units" shall have the meaning set forth in Exhibit E.
"Series L Exchange Notice" shall have the meaning set forth in Exhibit
J.
"Series L Exchange Rights" shall have the meaning set forth in Exhibit
J.
"Series L Offered Units" shall have the meaning set forth in Exhibit J.
"Series S Exchange Notice" shall have the meaning set forth in Exhibit
H.
"Series S Exchange Rights" shall have the meaning set forth in Exhibit
H.
"Series S Offered Units" shall have the meaning set forth in Exhibit H.
"S-SCUs" shall have the meaning set forth in Exhibit H.
"S-SCU Basic Distribution Amount" shall mean, with respect to an S-SCU,
$1.464375 (but shall mean $.7321875 after the 6/15/05 Stock Split); provided,
however, that such amount will be adjusted appropriately to account for any
further unit splits, combinations or other similar events with respect to the
S-SCUs.
"Stock Incentive Plan" shall mean the Company's 1993 Stock Incentive
Plan as adopted on October 27, 1993 and amended by Amendment No. 1 dated May 1,
1996 and Amendment No. 2 on May 3, 2000 and Amendment No. 3 on May 7, 2000, then
amended and restated and
23
renamed the "Amended and Restated CBL & Associates
Properties, Inc. Stock Incentive Plan" on May 5, 2003 as amended by Amendment #1
on October 29, 1993 and by Amendment #2 on November 4, 2004 and as may be
further amended.
"Substituted Limited Partner" shall mean any Person admitted to the
Partnership as a limited partner pursuant to the terms of Section 9.2.
"Tax Items" shall have the meaning set forth in Exhibit C.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock is listed or admitted to trading
is open for the transaction of business or, if the Common Stock is not listed or
admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking institutions in the
State of New York are authorized or obligated by law or executive order to
close.
"Transfer" as a noun, shall mean any sale, assignment, conveyance,
pledge hypothecation, gift, encumbrance or other transfer, including, without
limitation, a transfer by operation of law or through the laws of inheritance
and succession, and as a verb, shall mean to sell, assign, convey, pledge,
hypothecate, give, encumber or otherwise transfer, including, without
limitation, by operation of law or through the laws of inheritance and
succession.
1.2. Exhibits, Etc. References to "Exhibit" or to a "Schedule" are,
unless otherwise specified, to one of the Exhibits or Schedules attached to this
Agreement, and references to an "Article" or a "Section" are, unless otherwise
specified, to one of the Articles or Sections of this Agreement. Each Exhibit
and Schedule attached hereto and referred to herein is hereby incorporated
herein by reference.
1.3 Limited Partner Acceptance. Pursuant to Section 4.5 and 7.8 of the
Agreement, upon execution of a Limited Partner Acceptance of the Partnership
Agreement in the form attached hereto as Attachment 1-A (the forms attached as
Attachment 1-A, 1-B and 1-C being
24
individually referred to as a "Limited Partner
Acceptance") or by causing a Limited Partner Acceptance to be executed on its
behalf, each initial holder of SCUs automatically will be admitted as an
Additional Partner of the Partnership, without any further action or approval
and the General Partner hereby agrees to cause the names of such recipients to
be recorded on the books and records of the Partnership on the date of such
admission. In addition, upon the transfer by an initial recipient of SCUs to its
designated holding entity as contemplated by the Master Contribution Agreement,
and upon execution of a Limited Partner Acceptance by or on behalf of such
designated holding entity, such designated holding entity automatically will be
admitted as a Substituted Limited Partner of the Partnership with respect to the
transferred SCUs (and all of the conditions set forth in Section 9.2 of the
Agreement for such admission will be deemed satisfied), without any further
action or approval, and General Partner hereby agrees to cause the name of such
designated holding entity to be recorded on the books and records of the
Partnership on the dated of such admission.
Pursuant to Sections 4.5 and 7.8 of the Agreement, upon execution of a
Limited Partner Acceptance of the Partnership Agreement in the form attached
hereto as Attachment 1-B or by causing a Limited Partner Acceptance to be
executed on its behalf, each initial holder of S-SCUs automatically will be
admitted as an Additional Partner of the Partnership, without any further action
or approval and the General Partner hereby agrees to cause the names of such
recipients to be recorded on the books and records of the Partnership on the
date of such admission.
Pursuant to the Sections 4.5 and 7.8 of the Agreement, upon execution
of a Limited Partner Acceptance of the Partnership Agreement in the form
attached hereto as Attachment 1-C or by causing a Limited Partner Acceptance to
be executed on its behalf, the initial holder of L-SCUs automatically will be
admitted as an Additional Partner of the Partnership, without any further action
or approval and the General Partner herby agrees to cause the name of such
recipient to be recorded on the book and records of the Partnership on the date
of such admission.
25
ARTICLE II.
Organization
2.1. Continuation. The parties hereto do hereby continue the
Partnership as a limited partnership pursuant to the provisions of the Act, for
the purposes and upon the terms and conditions hereinafter set forth. The
Partners agree that the rights and liabilities of the Partners shall he as
provided in the Act except as otherwise herein expressly provided. Promptly upon
the execution and delivery hereof, the General Partner shall, to the extent
required under the Act or otherwise deemed Necessary or appropriate by the
General Partner, cause an amendment to the Certificate of Limited Partnership to
be filed with the Delaware Secretary of State, and such other notice,
instrument, document, or certificate as may be required by applicable law, and
which may be necessary or desirable to enable the Partnership to conduct its
business, and to own its properties, under the Partnership's name, to be filed
or recorded in all appropriate public offices.
2.2. Name. The business of the Partnership shall be conducted under the
name of CBL & Associates Limited Partnership or such other name as the General
Partner may select, and all transactions of the Partnership, to the extent
permitted by applicable law, shall be carried on and completed in such name.
2.3. Character of the Business. The purpose of the Partnership shall
be: to acquire, hold, own, develop, redevelop, construct, improve, maintain,
operate, manage, sell, lease, rent, transfer, encumber, mortgage, convey,
exchange, and otherwise dispose of, deal with, foreclose upon, or otherwise
exercise all rights with respect to, any of the Properties and any other real,
personal and intangible property of all kinds; exercise all of the powers of a
partner in Property Partnerships; to undertake such other activities as may be
necessary, advisable, desirable or convenient to the business of the
Partnership; to engage in such other ancillary activities as shall be necessary,
desirable or appropriate to effectuate the foregoing purposes; and to otherwise
engage in any enterprise, business or activity in which a limited partnership
may engage or conduct under the Act. The Partnership shall have all powers
necessary or desirable to
26
accomplish the purposes enumerated. In connection with
the foregoing, but subject to all of the terms, covenants, conditions and
limitations contained in this Agreement and any other agreement entered into by
the Partnership, the Partnership shall have full power and authority, directly
or through its interest in Property Partnerships, to enter into, perform, and
carry out contracts of any kind, to borrow money and to issue evidences of
indebtedness, whether or not secured by mortgage, trust deed, pledge or other
lien or assignment, and, directly or indirectly, to develop, acquire and
construct additional Properties necessary or useful in connection with its
business.
2.4. Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at the Office Building,
or such other location as shall be selected from time to time by the General
Partner in its sole discretion.
2.5. Registered Agent and Registered Office. The Registered Agent of
the Partnership shall be Corporation Trust Company or such other Person as the
General Partner may, select in its sole discretion. The Registered office of the
Partnership shall be 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000 or such
other location as the General Partner may select in its sole and absolute
discretion.
ARTICLE III.
Term
3.1. Commencement. The Partnership's term commenced upon the filing of
the Certificate of Limited Partnership with the Secretary of State of the State
of Delaware on July 16, 1993.
3.2. Dissolution. The Partnership shall continue until dissolved upon
the occurrence of the earliest of the following events:
27
(a) The withdrawal (is defined in the Act), dissolution,
termination, retirement or Bankruptcy of the General Partner or the
Bankruptcy of the Company; the Partnership's business may, however, be
continued and the Partnership reconstituted as provided in Section 9.1
hereof;
(b) The election to dissolve the Partnership made in writing
by the General Partner with, subject to Section 7.3, the Consent of the
Limited Partners;
(c) The sale or other disposition of all or substantially all
the assets of the Partnership unless the General Partner elects to
continue the Partnership business for the purpose of the receipt and
the collection of indebtedness or the collection of any other
consideration to be received in exchange for the assets of the
Partnership (which activities shall be deemed to be part of the
winding-up of the affairs of the Partnership);
(d) Dissolution required by operation of law; or
(e) December 31, 2090.
ARTICLE IV.
Contributions to Capital
4.1. Partners. Exhibit A hereto sets forth the names of Partners of the
Partnership as of the date hereof and the Partnership Units held by each such
Partner. A Partner may be both a General Partner and a Limited Partner
hereunder. The Partnership shall establish and maintain a separate Capital
Account for each Partner.
4.2.General Partner Capital Contribution.
(a) Prior to the date hereof, the General Partner has made certain
Capital Contributions to the Partnership as described in the books and records
of the Partnership as of the date hereof.
(b) The gross fair market value of any property contributed by the
General Partner to the Partnership ("Contributed Property"), other than money,
shall, except as otherwise expressly provided herein, be the Acquisition Cost of
such Contributed Property. For purposes hereof, the "Acquisition Cost" of
Contributed Property shall be, (i) in the case of Contributed Property acquired
by the General Partner or the Company in exchange for shares of Common Stock,
the
28
Current Per Share Market Price as of the closing date on which the General
Partner or the Company, as applicable, acquired such Contributed Property
multiplied by the number of shares of Common Stock issued in the acquisition or
(ii) in the case of Contributed Property acquired by the General Partner or the
Company for consideration other than Common Stock, the amount of such
consideration plus, in either case, any costs and expenses incurred by the
General Partner or the Company, as applicable, (and unreimbursed by the
Partnership) in connection with such acquisition or contribution; provided,
however, that (A) in the event the General Partner or the Company acquires the
Contributed Property in exchange for shares of Common Stock or with proceeds
from a public offering of the Company's securities, the Partnership shall assume
and pay (or reflect on its books as additional consideration for such
Contributed Properties) the expenses, including any applicable underwriting
discounts, incurred by the Company in connection with the issuance of such
shares or securities, and (B) in the event the Acquisition Cost of Contributed
Property is financed by any borrowings by the General Partner or the Company, or
is otherwise encumbered by Liens relating to obligations of the General Partner
or the Company, the Partnership shall, in either case, assume any such
obligations of the General Partner or the Company concurrently with the
contribution of such property to the Partnership or, if impossible, shall
obligate itself to the General Partner or the Company, as applicable, in an
amount and on terms equal to such indebtedness or obligation, and the
Acquisition Cost shall be reduced by the amount of such obligations assumed or
obligations incurred by the Partnership.
4.3. Limited Partner Capital Contributions.
(a) Prior to the date hereof, each Limited Partner has made certain
Capital Contributions to the Partnership as described in the books and records
of the Partnership as of the date hereof.
(b) A Limited Partner shall be unconditionally liable to the
Partnership for all or a
29
portion of any deficit in its Capital Account if it so
elects to be liable for such deficit or portion thereof. Such election may be
for either a limited or an unlimited amount and may be amended or withdrawn at
any time. The election, and any amendment thereof, shall be made by written
notice to the General Partner stating that the Limited Partner elects to be
liable, and specifying the limitations, if any, on the maximum amount or
duration of such liability. Said election, or amendment thereof, shall be
effective only from the date the written notice is received by the General
Partner, and shall terminate upon the date, if any, specified therein as a
termination date or upon delivery to the General Partner of a subsequent written
notice withdrawing or otherwise amending such election. A withdrawal, or an
amendment reducing the Limited Partner's maximum liability, shall not be
effective to avoid responsibility for any loss incurred prior to such amendment
or withdrawal.
(c) The Limited Partners acknowledge that the Partnership Units have
not been registered under any federal or state securities laws and, as a result
thereof, they may not be sold or otherwise transferred, except in compliance
with such laws and in accordance with the provisions of this Agreement.
Notwithstanding anything to the contrary contained in this Agreement, no
Partnership Units may be sold or otherwise transferred unless such transfer is
exempt from registration under any applicable securities laws or such transfer
is registered under such laws, it being acknowledged that the Partnership has no
obligation to take any action which would cause any such Units to be registered.
4.4. Issuance of Additional Units. (a) Without the consent of any Limited
Partner, but subject to the terms of Section 9.3 below, the General Partner may
from time to time cause the Partnership to issue to the Partners (including the
General Partner) or other Persons additional Partnership Units ("Additional
Units") in one or more classes, or one or more series of any of such classes,
with such designations, preferences and relative, participating, optional or
other
30
special rights, powers and duties, including, without limitation, rights,
powers and duties senior to the Common Units, and admit any such other Person as
an additional Limited Partner ("Additional Partner") (in accordance with Section
4.5 hereof), in exchange for the Capital Contribution by such Partner or Person
of cash and/or property. Without limiting the provisions of this Article IV, the
General Partner is expressly authorized to cause the Partnership to issue
Additional Units for less than either, (i) the fair market value thereof, or
(ii) the applicable Current Per Share Market Price multiplied by the number of
shares of Common Stock issuable with respect to such Additional Units upon the
exercise of the Rights with respect thereto. The General Partner shall have the
right and shall possess the authority to amend this Agreement without the
consent of any Limited Partner to evidence any action taken pursuant to this
Section 4.4 (a).
(b) In the event a Partner (the "Contributing Partner") contributes to
the Partnership any funds obtained directly or indirectly from the issuance by
the Company of Preferred Stock (the "Preferred Contributed Funds"), then the
Contributing Partner shall be issued Preferred Units of a designated class or
series to reflect its contribution of such funds. Each class or series of
Preferred Units so issued shall be designated by the General Partner to identify
such class or series with the class or series of Preferred Stock which
constitutes the Related Issue. Each class or series of Preferred Units shall be
described in a written document (the "Preferred Unit Designation") attached as
Exhibit B that shall set forth in sufficient detail, the economic rights,
including dividend, redemption and conversion rights and sinking fund
provisions, of the class or series of Preferred Units and the Related Issue. The
number of Preferred Units of a class or series shall be equal to the number of
shares of the Related Issue sold. The Preferred Unit Designation shall provide
for such terms for the class or series of Preferred Units that shall entitle the
holders thereof to substantially the same economic rights as the holders of the
Related
31
Issue. Specifically, the holders of such Preferred Units shall receive
distributions on the class or series of Preferred Units pursuant to Section 6.2
equal to the aggregate dividends payable on the Related Issue at the times such
dividend are paid (the "Preferred Distribution Requirement"). The Partnership
shall redeem the class or series of Preferred Units for a redemption price per
Preferred Unit equal to the redemption price per share of the Related Issue,
exclusive of any accrued unpaid dividends (the "Preferred Redemption Price")
upon the redemption of any shares of the Related Issue. Each class or series of
Preferred Units shall also be converted into additional Common Units at the time
and on such economic terms and conditions as the Related Issue is converted into
Common Stock. Upon the issuance of any class or series of Preferred Units
pursuant to this Section 4.4(b), the General Partner shall provide the Limited
Partners with a copy of the Preferred Unit Designation relating to such class or
series. A Partner shall have the right, in lieu of contributing to the
Partnership funds received directly or indirectly from the issuance of Preferred
Stock as Preferred Contributed Funds, to lend such funds to the Partnership. Any
such loan shall be on the same terms and conditions as the Related Issue except
that dividends payable on the Related Issue shall be payable by the Partnership
to such Partner as interest, any mandatory redemptions shall take the form of
principal payments and no Preferred Units shall be issued to such Partner. If
any such loan is made, the Partnership shall promptly reimburse such Partner for
all expenses including any applicable underwriter discounts incurred by the
Company in connection with raising the funds. Any such loan made by such Partner
to the Partnership may, at any time be contributed to the Partnership as
Preferred Contributed Funds in exchange for Preferred Units as above provided;
and if the Related Issue is by its terms convertible into Common Stock, such
loan shall be so contributed to the Partnership prior to the effectuation of
such conversion.
32
(c) In the event a Partner contributes to the Partnership any funds
obtained directly or indirectly from the issuance by the Company of Capital
Stock, the Partnership shall reimburse, such Partner for the expenses (including
any applicable underwriter discounts) incurred by the Company in connection with
raising such funds.
4.5. Admission of Additional Partners.
(a) After the date hereof, a Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement shall be
admitted to the Partnership as an Additional Partner only upon furnishing to the
General Partner (i) a written agreement in form satisfactory to the General
Partner accepting all of the terms and conditions of this Agreement and (ii)
such other documents or instruments as may be required in the discretion of the
General Partner.
(b) No Person shall be admitted as an Additional Partner without the
consent of the' General Partner, which consent may be given or withheld in the
General Partner's sole and absolute discretion and for any or no reason
whatsoever. The admission of any Person as an Additional Partner shall become
effective on the date upon which the name of such Person is recorded on the
books and records of the Partnership, following the consent of the General
Partner to such admission.
(c) If an Additional Partner is admitted to the Partnership on any
other date than the first day of the Partnership's tax year, then Net Income,
Net Loss, each item thereof and all other items allocable among Partners and
Assignees for such tax year shall be allocated among such Additional Partner and
all other Partners and Assignees by taking into account their varying interests
during the Fiscal Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method. Solely for purposes of making such
allocations, each of such items
33
for the calendar month in which an admission of
any Additional Partner occurs shall be allocated among all Partners Assignees
including such Additional Partner.
(d) The General Partner, acting alone, shall be authorized on behalf of
each of the Partners to amend this Agreement to reflect the admission of any
Additional Partner or to record any change in ownership of Partnership Units of
any Partner.
4.6. Stock Incentive Plan. If at any time or from time to time
Incentive Options granted in connection with the Company's Stock Incentive Plan
are exercised in accordance with the terms of the Incentive Option Agreement:
(a) the Company shall, as soon as practicable after such
exercise, contribute or cause to be contributed to the capital of the
Partnership an amount equal to the exercise price paid to the Company
by such exercising party in connection with the exercise of the
Incentive Option; and
(b) the Partner which makes a contribution to the capital of
the Partnership pursuant to Section 4.2(a) hereof shall be deemed to
have contributed to the Partnership as Capital Contributions an amount
equal to the Current Per Share Market Price (as of the Trading Date
immediately preceding the date on which the purchase of the Common
Stock by such exercising party is consummated) multiplied by the number
of shares of Common Stock delivered by the Company to such exercising
party and the Partnership shall issue to such contributing Partner a
number of Common Units equal to such number of shares of Common Stock
divided by the Conversion Factor.
4.7. No Third Party Beneficiary. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to
pursue any other right or remedy hereunder or at law or in equity, it being
understood and agreed that the provisions of this Agreement shall be
solely for the benefit of, and may be enforced solely by the parties
hereto and their respective successors and assigns. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions or
loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may such rights or obligations
be sold, transferred or assigned by the Partnership or pledged or encumbered by
the Partnership to secure any debt or other obligation of the Partnership or of
any of the Partners.
34
4.8. No Interest; No Return. No Partner shall be entitled to interest
on its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to demand or receive
the return of its Capital Contribution from the Partnership or from any of the
other Partners.
4.9. Adjustment Upon Conversion of Preferred Stock. Upon the conversion
of any shares of Preferred Stock to Common Stock pursuant to the terms of such
Preferred Stock, the ownership of Partnership Units of the Partners shall be
adjusted in accordance with the provisions of this Agreement to reflect, on the
date of such conversion, the parallel conversion of the Preferred Units that
were a Related Issue of such converted Preferred Stock into Common Units equal
in number to the number of shares of Common Stock issued as a result of such
conversion.
ARTICLE V.
Representations, Warranties and Covenants
5.1. Representations and Warranties. Each Limited Partner hereby
represents and warrants to the Partnership and the General Partner the
following:
(a) Organization; Authority. Such Limited Partner is either
(A) in the case of such persons which are corporations, duly
incorporated, validly existing and in good standing under the laws of
its jurisdiction of incorporation, or (B) in the case of such persons
which are partnerships or trusts, a partnership or trust, as the case
may be, duly formed, validly existing and in good standing (to the
extent applicable) under the laws of its jurisdiction of formation. The
Limited Partner has the requisite authority to enter into and perform
this Agreement.
(b) Due Authorization; Binding Agreement. The execution,
delivery and performance of this Agreement by such Limited Partner has
been duly and validly authorized by all necessary action of such
Limited Partner. This Agreement has been duly executed and delivered by
such Limited Partner, or an authorized representative of such Limited
Partner, and constitutes a legal valid and binding obligation of such
Limited Partner, enforceable against such Limited Partner in accordance
with the terms hereof.
(c) Consents and Approvals. No consent, waiver, approval or
authorization of, or filing, registration or qualification with, or
notice to, any governmental unit or any other person is required to be
made, obtained or given by such Limited Partner in connection
35
with the execution, delivery and performance of this Agreement except
for those which have been heretofore obtained.
(d) No Violation. None of the execution, delivery or
performance of this Agreement by such Limited Partner does or will,
with or without the giving of notice, lapse of time or both, (i)
violate, conflict with or constitute a default under any term or
provision of (A) the organizational documents of such Limited Partner
or any agreement to which such Limited Partner is a party or by which
it is bound or (B) any term or provision of any judgment, decree,
order, statute, injunction, rule or regulation of a governmental unit
applicable to such Limited Partner or any agreement to which such
Limited Partner is a party or by which it or its assets or properties
are bound, or (ii) result in the creation of any Lien or other
encumbrance upon the assets or properties of such Limited Partner other
than in favor of such Partnership.
5.2. Covenants. Without the prior consent of the General Partner, no
Limited Partner shall take any action, including acquiring, directly or
indirectly, an interest in any tenant of a Property, which would have the effect
of causing the percentage of the gross income of the Company that fails to be
treated as "rents from real property" within the meaning of Section 856(d) (2)
of the Code to exceed such percentage as of the date of the First Restated
Agreement.
ARTICLE VI.
Allocations, Distributions, and
Other Tax and Accounting Matters
6.1. Allocations. The Net Income or Net Loss and/or other Partnership
items shall be allocated pursuant to the provisions of Exhibit C hereto. All Net
Income or Net Loss with respect to periods prior to the date of the Second
Amended and Restated Agreement dated June 30, 1998, shall be allocated to the
Limited Partners pursuant to the First Restated Agreement.
6.2. Distributions.
(a) The General Partner shall cause the Partnership to
distribute all or a portion of Net Cash Flow to the Partners from time to time
as determined by the General Partner, but in any event not less frequently than
quarterly, in such amounts as the General Partner shall determine. All such
distributions shall be made in accordance with the following order of priority:
36
(i) First, to the extent that the amount of Net Cash
Flow distributed no :he relevant Partner, on account of the Preferred
Units, for any prior quarter was less than the Preferred Distribution
Requirement for such quarter, and has not been subsequently distributed
pursuant to this Section 6.2(a) (i) (a "Preferred Distribution
Shortfall"), Net Cash Flow shall be distributed to the relevant
Partner, on account of the Preferred Units, in an amount necessary to
satisfy such Preferred Distribution Shortfall for the current and all
prior Partnership taxable years. In the event that the Net Cash Flow
distributed for a particular quarter is less than the Preferred
Distribution Shortfall, then all Net Cash Flow for the current quarter
shall be distributed to the relevant Partner on account of the
Preferred Units;
(ii) Second, Net Cash Flow shall be distributed to the
relevant Partner, on account of the Preferred Units, in an amount equal
to the Preferred Distribution Requirement for the then current quarter
for each outstanding Preferred Unit. In the event that the amount of
Net Cash Flow distributed for a particular quarter pursuant to this
subparagraph (a) (ii) is less than the Preferred Distribution
Requirement for such quarter, then all such Net Cash Flow for such
quarter shall be distributed to the relevant Partner, on account of the
Preferred Units. In addition, in the event that the Partnership is
liquidated pursuant to Article VIII, the allocation described above
shall be made to the relevant Partner, on account of the Preferred
Units, with respect to all Preferred Units then outstanding; and
(iii) Third, to the extent that the amount of Net Cash
Flow distributed to the holders of SCUs for any prior quarter was (for
any reason, including as a result of Section 6.2(e), a lack of legally
available funds or a decision by the General Partner not to make
distributions for such quarter) less than the amount required to be
distributed for such quarter on account of the SCUs pursuant to
subparagraph (a)(iv) below, and such shortfall has not been
subsequently distributed pursuant to this Section 6.2(a)(iii), Net Cash
Flow shall be distributed to the holders of SCUs ratably until they
have received an amount per SCU necessary to satisfy such shortfall for
all prior quarters of the current and all prior Partnership taxable
years.
(iv) Fourth, Net Cash Flow shall be distributed to the holders
of SCUs ratably until they have received for the quarter to which
distribution relates an amount for each outstanding SCU equal to the
Basic Distribution Amount, provided, however, that in the event that
the Common Unit Distribution Amount with respect to each of the four
consecutive calendar quarters immediately preceding the calendar
quarter to which the distribution under this subparagraph (a)(iv)
relates equal to or greater than the Floor Distribution, then the
amount required to be distributed under this subparagraph (a)(iv) for
each outstanding SCU shall be equal to the product of the Reduction
Factor and the Basic Distribution Amount; and
(v) Fifth, the balance of the Net Cash Flow to be distributed,
if any, shall be distributed to holders of SCUs and Common Units, pro
rata in accordance with their proportionate ownership of the aggregate
number SCUs and Common Units outstanding counting each SCU as the
number of Common Units into which it is convertible pursuant
37
to the terms of (Exhibit E) provided, however, that such distribution
to the holders of SCUs shall be reduced by the amount of the
distribution made to them on account of their SCUs with respect to
such quarter pursuant to subparagraph (a)(iv) above and the reduction
will be allocated among the holders of SCUs pro rata in accordance
with their respective percentage interests in the total number of
SCUs then outstanding.
For the avoidance of doubt, set forth below are
illustrations of the distributions payable to the holders of SCUs and
Common Units pursuant to subparagraphs (a)(iv) and (a)(v) above: (I) if
the Common Unit Distribution amount is $0.8750 ($0.43750 after the
6/15/05 Stock Split), then the amount payable with respect to each
outstanding SCU for that quarter is $0.8750 ($0.43750 after the 6/15/05
Stock Split); (II) of the Common Unit Distribution amount is $0.725625
($0.3628125 after the 6/15/05 Stock Split), then the amount payable
with respect to each outstanding SCU for that quarter is $0.725625
($0.3628125 after the 6/15/05 Stock Split); (III) if the Common Unit
Distribution Amount is $0.5875 ($0.29375 after the 6/15/05 Stock
Split), then the amount payable with respect to each outstanding SCU
for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock
Split); (IV) if the Common Unit Distribution amount is $0.4375
($0.21875 after the 6/15/05 Stock Split), then the amount payable with
respect to each outstanding SCU for that quarter is $0.725625
($0.3628125 after the 6/15/05 Stock Split); (V) if the Common Unit
Distribution amount is $0.21875 ($0.109375 after the 6/15/05 Stock
Split), then the amount payable with respect to each outstanding SCU
for that quarter is $0.725625 ($0.3628125 after the 6/15/05 Stock
Split) (unless the Common Unit Distribution amount with respect to each
of the four consecutive quarters immediately preceding such quarter was
less than the Floor Distribution, in which case the amount payable with
respect to each outstanding SCU for that quarter would be $0.3628125
($0.18140625 after the 6/15/05 Stock Split); and (VI) if the Common
Unit Distribution amount is $0.00, then the amount payable with respect
to each outstanding SCU for that quarter is $0.725625 ($0.3628125 after
the 6/15/05 Stock Split) (unless the Common Unit Distribution Amount
with respect to each of the four consecutive quarters immediately
preceding such quarter was less than the Floor Distribution, in which
case the amount payable with respect to each outstanding SCU for that
quarter would be $0.00).
(b) Distributions shall also be made in accordance with the following
order of priority:
(i) Concurrently, ratably and on parity with the distributions
to holders of SCUs provided for under Section 6.2(a)(iii), to the
extent that the amount of Net Cash Flow distributed to the holders of
S-SCUs for any prior quarter was (for any reason, including as a result
of section 6.2(e), a lack of legally available funds or a decision by
the General Partner not to make distributions for such quarter) less
than the amount required to be distributed for such quarter on account
of the S-SCUs pursuant to subparagraph (ii) below, and such shortfall
has not been subsequently distributed pursuant to this Section
6.2(b)(i), Net Cash Flow shall be distributed to the holders of S-SCUs
until they have received an amount per S-SCU, as applicable, necessary
to satisfy such shortfall for all prior quarters of the current and all
prior Partnership taxable years;
38
(ii) Concurrently, ratably and on parity with the
distributions to holders of SCUs provided for under Section 6.2(a)(iv),
Net Cash Flow shall be distributed among the holders of S-SCUs until
they have received for the quarter to which the distribution relates an
amount for each outstanding S-SCU equal to the applicable S-SCU Basic
Distribution Amount;
(iii) Concurrently, ratably and on parity with the
distributions to holders of SCUs and Common Units provided for under
Section 6.2(a)(v), the balance of the Net Cash Flow to be distributed,
if any, shall be distributed to holders of S-SCUs pro rata in
accordance with their proportionate ownership of the aggregate number
of SCUs, S-SCUs and Common Units outstanding (counting each SCU or
S-SCU as the number of Common Units into which it is convertible
pursuant to the terms of Exhibit E or Exhibit H, as applicable),
provided, however, that such distribution to the holders of S-SCUs
shall:
(A) be made only after the quarterly distributions on
account of each Common Unit under Section 6.2(a)(v)
for the four previous consecutive quarters shall have
averaged an amount that is equal to or greater than
the applicable S-SCU Basic Distribution Amount; and
(B) be reduced by the amount of the distribution made
to such Holders on account of their S-SCUs with
respect to such quarter pursuant to subparagraph
(b)(ii) above and the reduction will be allocated
among the holders of S-SCUs pro rata in accordance
with their respective percentage interests in the
total number of S-SCUs then outstanding.
(iv) Notwithstanding the foregoing, all distributions pursuant
to this Section 6.2(b) shall remain subject to the provisions of (i)
each Certificate of Designation for any class or series of Preferred
Units, (ii) Exhibit E hereto with respect to the SCUs, and (iii)
Exhibit H hereto with respect to the S-SCUs.
(c) Distributions shall also be made in accordance with the
following order of priority:
(i) Concurrently, ratably and on parity and with the
distributions to holders of SCUs and S-SCUs
provided for under Sections 6.2(a)(iii) and 6.2(b)(i), respectively, to
the extent that the amount of Net Cash Flow distributed to the holders
of L-SCUs for any prior quarter was (for any reason, including as a
result of Section 6.2(e), a lack of legally available funds or a
decision by the General Partner not to make distributions for such
quarter) less than the amount required to be distributed for such
quarter on account of the L-SCUs pursuant to subparagraph (ii) below,
and such shortfall has not been subsequently distributed pursuant to
this Section 6.2(c)(i), Net Cash Flow shall be distributed to the
holders of L-SCUs until they have received an amount per L-SCU, as
applicable, necessary to satisfy such shortfall for all prior quarters
of the current and all prior Partnership taxable years;
39
(ii) Concurrently, ratably and on parity with the
distributions to holders of SCUs and S-SCUs provided for under Sections
6.2(a)(iv) and 6.2(b)(ii), respectively, Net Cash Flow shall be
distributed among the holders of L-SCUs until they have received for
the quarter to which the distribution relates an amount for each
outstanding L-SCU equal to the applicable L-SCU Basic Distribution
Amount;
(iii) Concurrently, ratably and on parity with the
distributions to holders of SCUs, S-SCUs and Common Units provided for
under Section 6.2(a)(v) and 6.2(b)(iii), the balance of the Net Cash
Flow to be distributed, if any, shall be distributed to holders of
L-SCUs pro rata in accordance with their proportionate ownership of the
aggregate number of SCUs, S-SCUs and L-SCUs and Common Units
outstanding (counting each SCU, S-SCU or L-SCU as the number of Common
Units or number of shares of Common Stock, as applicable, into which it
is convertible pursuant to the terms of Exhibit E, Exhibit H or Exhibit
J, as applicable), provided, however, that such distribution to the
holders of L-SCUs shall be reduced by the amount of the distribution
made to such Holders on account of their L-SCUs with respect to such
quarter pursuant to subparagraph (c)(ii) above and the reduction will
be allocated among the holders of L-SCUs pro rata in accordance with
their respective percentage interests in the total number of L-SCUs
then outstanding.
(iv) Notwithstanding the foregoing, all distributions pursuant
to this Section 6.2(c) shall remain subject to the provisions of (i)
each Certificate of Designation for any class or series Preferred
Units, (ii) Exhibit E hereto with respect to the SCUs, (iii) Exhibit H
hereto with respect to the S-SCUs and (iv) Exhibit J hereto with
respect to the L-SCUs.
(d) (1) Neither the Partnership nor the Limited Partners shall have any
obligation to see that any funds distributed pursuant to subparagraph (a) (i) of
this Section 6.2 are in turn used to pay dividends on any Capital Stock of the
Company. Subject to the preceding sentences, (a) the General Partner shall use
its reasonable efforts to cause the Partnership to distribute sufficient amounts
to enable the Company to pay shareholder dividends that will (i) satisfy the
requirements for qualifying as a REIT under the Code and Regulations ("REIT
Requirements"), and (ii) avoid any federal income or excise tax liability of the
Company; and (b) in the event of a sale of a Property or an interest in a
Property Partnership (other than a direct or indirect interest in a Property set
forth in Exhibit A of the Master Contribution Agreement (a "Xxxxxx Property")
and other than a Property constituting "substituted basis property" (as defined
in Section 7701(a)(42) of the Code) with respect to a Xxxxxx Property) giving
rise to a special allocation of
40
taxable income or gain to a limited Partner or
Partners pursuant to Section 3(c) of Exhibit C, the General Partner shall cause
the Partnership to distribute the Net Sale Proceeds therefrom up to an amount
sufficient to enable such Limited Partner or Partners to pay any income tax
liability with respect to the income or gain so specially allocated (or, if any
such Limited Partner is a partnership or S corporation, to enable such Limited
Partner to distribute sufficient amounts to its equity owners to enable such
owners to pay any income tax liability with respect to their share of such
taxable income or gain).
(d) (2) If in any quarter the Partnership redeems any outstanding
Preferred Units, unless and except to the extent that such redemption is
effected out of borrowed funds, Capital Contributions or other sources Net Cash
Flow shall be distributed to the relevant Partner, on account of the Preferred
Units, in an amount equal to the Preferred Redemption Amount for the Preferred
Units being redeemed before being distributed pursuant to Section 6.2(a). There
shall be no adjustment of the then current proportionate ownership of
Partnership Units of the Partners on account of any distribution under this
Section.
(e) Notwithstanding the foregoing, all distributions pursuant
to this Section 6.2 shall remain subject to the provisions of (i) the
Certificate of Designation for each class or series of Preferred Units set forth
in Exhibit B hereto and (ii) Exhibit E hereto with respect to the SCUs.
(f) Notwithstanding the provisions of Section 6.2(a) above, if
the distributions with respect to the SCUs made on or prior to the second
anniversary of the issuance of the SCUs would result in any holder of a SCU
receiving an annual return on such holder's "unreturned capital" (as defined for
purposes of Regulation Section 1.707-4(a)) for a partnership tax year (treating
the Partnership tax year in which such second anniversary occurs as ending on
such
41
date) in excess of the Safe Harbor Rate (as defined below), then the
distributions to such holder in excess of such Safe Harbor Rate will be
deferred, will continue to cumulate and will be payable on the earlier to occur
of (i) the disposition of the SCUs to which such deferred distributions relate
in a transaction in which the disposing holder recognizes taxable gain thereon
or (ii) the first distribution payment date with respect to the SCUs following
the second anniversary of the issuance of the SCUs. For purposes of the
foregoing, the "Safe Harbor Rate" shall equal 150% of the highest applicable
Federal rate, based on quarterly compounding, in effect for purposes of Section
1274(d) of the Code at any time between the date of the issuance of the SCUs and
the date on which the relevant distribution payment is made.
(g) Distributions to Common Units and SCUs may be made by
offering the holders of Common Units and SCUs the opportunity to make an
election to take a portion of such distribution in cash or additional Common
Units; provided that such an offer may not be made unless (i) holders of SCUs
and holders of Common Units received on a conversion or redemption of SCUs will
receive the full amount of the distribution in cash to the extent that such
holders elect to receive cash, including an election to receive 100% of the
distribution in cash, (ii) with respect to distributions made within two years
of the final Closing provided for in the Master Contribution Agreement, such
distributions will not cause the aggregate distributions to a holder of SCUs or
holder of Common Units received on a conversion or redemption of SCUs, other
than distributions to such holder in respect of the Basic Distribution Amount,
to exceed the product of (x) the lesser of such holder's percentage interest in
Partnership profits for the year in which the distribution is made or such
holder's percentage interest in Partnership profits for the life of the
Partnership (as determined for purposes of Regulations Section 1,707-4(b)) and
(y) the Partnership's net cash flow from operations for the year in which the
42
distribution is made (as determined for purposes of Regulations Section
1.707-4(b)) and (iii) holders of SCUs that elect to receive 100% of the
distribution in cash will have received in respect of the quarter to which such
distribution relates an amount per SCU, in cash, pursuant to Section 6.2(a)(iv),
equal to the Basic Distribution Amount. Any such election will be made pro rata
between the Common Units and SCUs, i.e., the same amount of cash or Common Units
shall be offered with respect to each Common Unit and SCU. Holders of Common
Units or SCUs shall in no event be required to elect to receive additional
Common Units.
6.3. Books of Account. At all times during the continuance of the
Partnership, the General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with generally
accepted accounting principles wherein shall be entered particulars of all
monies, goods or effects belonging to or owing to or by the Partnership, or
paid, received, sold or purchased in the course of the Partnership's business,
and all of such other transactions, matters and things relating to the business
of the Partnership as are usually entered in books of account kept by persons
engaged in a business of a like kind and character. In addition, the Partnership
shall keep all records as required to be kept pursuant to the Act. The books and
records of account shall be kept at the principal office of the Partnership, and
each Partner shall at all reasonable times have access to such books and records
and the right to inspect the same.
6.4. Reports. The General Partner shall cause to be submitted to the
Limited Partner Representatives promptly upon receipt of the same from the
Accountants and in no event later than April 1 of each year, copies of Audited
Financial Statements prepared on a consolidated basis for the Partnership and
the Property Partnerships, together with the reports thereon, and all
supplementary schedules and information, prepared by the Accountants, provided,
however, that
43
with respect to Joint Venture Partnerships which are not
Controlled by the Partnership, the General Partner shall diligently seek to (i)
cause the Joint Venture Partnership to distribute its Audited Financial
Statements on or before April 1 of each year subject to the Joint Venture
Partnership's partnership agreement, and (ii) cause such Audited Financial
Statements to be submitted to the Limited Partners promptly upon their receipt.
The Partnership shall also cause to be prepared such reports and/or information
as are necessary for the General Partner to determine its qualification as a
REIT and its compliance with REIT Requirements.
6.5. Audits. Not less frequently than annually, the General Partner
shall cause the Accountants to audit books and records of the Partnership and
the Property Partnerships (and, pursuant to the terms of the applicable
partnership agreement, diligently seek to cause each Joint Venture Partnership
not Controlled by the Partnership to annually audit such Joint Venture
Partnership's books and records).
6.6. Tax Elections and Returns. All elections required or permitted to
be made by the Partnership under any applicable tax law shall be made by the
General Partner in its sole discretion; provided, however, the General Partner
shall, if requested by transferee, file an election on behalf of the Partnership
pursuant to Section 754 of the Code to adjust the basis of the Partnership
property in the case of the Transfer of a Partnership Unit, including Transfers
made in connection with the exercise of Rights (or Series J, Series S or Series
L Exchange Rights), made in accordance with the provisions of this Agreement.
The General Partner shall cause the Accountants to prepare and file all state
and federal tax returns on a timely basis.
6.7. Tax Matters Partner. The General Partner is hereby designated as
the Tax Matters Partner within the meaning of Section 6231(a) (7) of the Code
for the Partnership; provided, however, (i) in exercising its authority as Tax
Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the General Partner shall consult
44
in good faith with the Limited Partner Representatives regarding the filing of a
Code Section 6227(b) administrative adjustment request with respect to the
Partnership or a Property before filing such request, it being understood,
however, that the provisions hereof shall not be construed to limit the ability
of any Partner, including the General Partner, to file an administrative
adjustment request on its own behalf pursuant to Section 6227(a) of the Code;
(iii) the General Partner shall consult in good faith with the Limited Partner
Representatives regarding the filing of a petition for judicial review of an
administrative adjustment request under Section 6228 of the Code, or a petition
for judicial review of a final partnership administrative judgment under Section
6226 of the Code relating to the Partnership before filing such petition; (iv)
the General Partner shall give prompt notice to the Limited Partner
Representatives of the receipt of any written notice that the Internal Revenue
Service or any state or local taxing authority intends to examine Partnership
income tax returns for any year, receipt of written notice of the beginning of
an administrative proceeding at the Partnership level relating to the
Partnership under Section 6223 of the Code, receipt of written notice of the
final Partnership administrative adjustment relating to the Partnership pursuant
to Section 6223 of the Code and receipt of any request from the Internal Revenue
Service for waiver of any applicable statute of limitations with respect to the
filing of any tax return by the Partnership; and (v) the general Partner shall
promptly notify the Limited Partner Representatives if the General Partner does
not intend to file for judicial review with respect to the Partnership. The
General Partner, in acting on behalf of the Partnership as Tax Matters Partner
of a Property Partnership, shall afford the Limited Partners the same rights
with respect to Property Partnership tax matters as afforded to the Limited
Partners under this Section 6.7.
ARTICLE VII.
Rights, Duties and Restrictions of the General Partner
7.1. Expenditures by Partnership. The General Partner is hereby
authorized to pay compensation for accounting administrative, legal, technical,
management and other services
45
rendered to the Partnership. All of the aforesaid
expenditures shall be made on behalf of the Partnership and the General Partner
shall be entitled to reimbursement by the Partnership for any expenditures
incurred by it on behalf of the Partnership which shall be made other than out
of the funds of the Partnership. The Partnership shall also assume, and pay when
due, all Administrative Expenses.
7.2. Powers and Duties of General Partner. The General Partner shall be
responsible for the management of the Partnership's business and affairs. Except
as otherwise herein expressly provided, the General Partner shall have, and is
hereby granted, full and complete power authority and discretion to take such
action for and on behalf of the Partnership and in its name as the General
Partner shall, in its sole and absolute discretion, deem necessary or
appropriate to carry out the purposes for which the Partnership was organized.
Except as otherwise expressly provided herein, and subject to Section 7.3
hereof, the General Partner shall have the right, power and authority:
(a) To manage, control, invest, reinvest, acquire by purchase,
lease or otherwise sell, contract to purchase or sell, grant, obtain,
or exercise options to purchase, options to sell or conversion rights,
assign, transfer, convey, deliver, endorse, exchange, pledge, mortgage,
abandon, improve, repair, maintain, insure, lease for any term and
otherwise deal with any and all property of whatsoever kind and nature,
and wherever situated, in furtherance of the business or purposes of
the Partnership;
(b) To acquire, directly or indirectly, interests in real
estate of any kind and of any type, and any and all kinds of interests
therein (including, without limitation, Entities investing therein),
and to determine the manner in which title thereto is to be held; to
manage (directly or through property managers, including without
limitation, the Management Company), insure against loss, protect and
subdivide any of the real estate, interests therein or parts thereof;
to improve, develop or redevelop any such real estate; to participate
in the ownership and development of any property; to dedicate for
public use, to vacate any subdivisions or parts thereof, to
re-subdivide, to contract to sell, to grant options to purchase or
lease, to sell on any terms; to convey, mortgage, pledge or otherwise
encumber said property, or any part thereof; to lease said property or
any part thereof from time to time, upon any terms and for any period
of time, and to renew or extend leases, to amend, change or modify the
terms and provisions of any leases and to
46
grant options to lease and
options to renew leases and options to purchase; to partition or to
exchange said real property, or any part thereof, for other real or
personal property; to grant easements or charges of any kind; to
release, convey or assign any right, title or interest in or about or
easement appurtenant to said property or any part thereof; to construct
and reconstruct, remodel, alter, repair, add to or take from buildings
on any property in which the Partnership owns an interest; to insure
any Person having an interest in or responsibility for the care,
management or repair of such property; to direct the trustee of any
land trust to mortgage, lease, convey or contract to convey the real
estate held in such land trust or to execute and deliver deeds,
mortgages, notes, and any and all documents pertaining to the property
subject to such land trust or in any matter regarding such trust; to
execute assignments of all or any part of the beneficial interest in
any land trust in which the Partnership owns a beneficial interest;
(c) To employ, engage or contract with or dismiss from
employment or engagement Persons to the extent deemed necessary or
appropriate by the General Partner for the operation and management of
the Partnership business, including but not limited to contractors,
subcontractors, engineers, architects surveyors, mechanics,
consultants, accountants, attorneys, insurance brokers, real estate
brokers and others;
(d) To enter into, make, amend, perform and carry out or
cancel and rescind, contracts and other obligations on behalf of the
Partnership and to cause all Administrative Expenses to be paid;
(e) To borrow money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure, from any
Person, credit or accommodations; to contract liabilities and
obligations, direct or contingent and of every kind and nature
(including interest rate swaps, caps, and xxxxxx) with or without
security; and to repay, discharge, settle, adjust, compromise, or
liquidate any such loan, advance, credit, obligation or liability;
(f) To pledge, hypothecate, mortgage, assign, deposit,
deliver, enter into sale and leaseback arrangements or otherwise give
as security or as additional or substitute security or for sale or
other disposition any and all Partnership property, tangible or
intangible, including, but not limited to, real estate and beneficial
interests in land trusts, and to make substitutions thereof, and to
receive any proceeds thereof upon the release or surrender thereof; to
sign, execute and deliver any and all assignments, deeds and other
contracts and instruments in writing; to authorize, give, make,
procure, accept and receive moneys, payments, property, notices,
demands, vouchers, receipts, releases, compromises and adjustments; to
waive notices, demands, protests and authorize and execute waivers of
every kind and nature; to enter into, make, execute, deliver and
receive written agreements, undertakings and instruments of every kind
and nature; to give oral instructions and make oral agreements; and
generally to do any and all other acts and things incidental to any of
the foregoing or with reference to any dealings or transactions which
the General Partner may deem necessary, proper or advisable to effect
or accomplish any of the foregoing or to carry out the business and
purposes of the Partnership;
47
(g) To acquire and enter into any contract of insurance which
the General Partner deems necessary or appropriate for the protection
of the Partnership, for the conservation of the Partnership's assets or
for any purpose convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of
the Partnership; to adjust and settle checking, savings, and other
accounts with such institutions as the General Partner shall deem
appropriate; to draw, sign, execute, accept, endorse, guarantee,
deliver, receive and pay any checks, drafts, bills of exchange,
acceptances, notes, obligations, undertakings and other instruments for
or relating to the payment of money in, into or from any account in the
Partnerships name; to execute, procure, consent to and authorize
extensions and renewals of any of the foregoing; to make deposits into
and withdrawals from the Partnership's bank accounts; and to negotiate
or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, xxx for, receive, and otherwise take steps to
collect or recover all debts, rents, proceeds, interests, dividends,
goods, chattels, income from property, damages and all other property,
to which the Partnership may be entitled or which are or may become due
the Partnership from any Person; to commence, prosecute or enforce, or
to defend, answer or oppose, contest and abandon all legal proceedings
in which the Partnership is or may hereafter be interested; and to
settle, compromise or submit to arbitration any accounts, debts,
claims, disputes and matters which may arise between the Partnership
and any other Person and to grant an extension of time for the payment
or satisfaction thereof on any terms, with or without security;
(j) To make arrangements for financing, including the taking
of all action deemed necessary or appropriate by the General Partner to
cause any approved loans to be closed;
(k) To take all reasonable measures necessary to insure
compliance by the Partnership with applicable arrangements, and other
contractual obligations and arrangements entered into by the
Partnership from time to time in accordance with the provisions of this
Agreement, including periodic reports as required to be submitted to
lenders and using all due diligence to insure that the Partnership is
in compliance with its contractual obligations;
(l) To maintain the Partnership's books and records;
(m) To prepare and deliver, or cause to be prepared and
delivered by the Partnership's Accountants, all financial and other
reports with respect to the operations of the Partnership and all
Federal and state tax returns and reports;
(n) To act in any state or nation in which the Partnership may
lawfully act, for itself or as principal, agent or representative for
any person with respect to any business of the Partnership;
48
(o) To become a partner or member in, and perform the
obligations of a partner or member of, any general or limited
partnership or limited liability company;
(p) To apply for, register, obtain, purchase or otherwise
acquire trademarks, trade names, labels and designs relating to or
useful in connection with any business of the Partnership, and to use,
exercise, develop and license the use of the same;
(q) To pay or reimburse any and all actual fees, costs and
expenses incurred in the formation and organization of the Partnership;
(r) To do all acts which are necessary, customary or
appropriate for the protection and preservation of the Partnership's
assets, including the establishment of reserves; and
(s) In general, to exercise all of the general rights,
privileges and powers permitted to be had and exercised by the
provisions of the Act.
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties on behalf of the Partnership or to undertake any
individual liability or obligation on behalf of the Partnership.
7.3. Major Decisions. The General Partner shall not, without the prior
Consent of the Limited Partners, on behalf of the Partnership, undertake any of
the following actions (the "Major Decisions"):
(a) Make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver or
trustee for all or any part of the assets of the Partnership.
(b) Take title to any personal or real property, other than in
the name of the Partnership, a Property Partnership or pursuant to
Section 7.9 hereof.
(c) Institute any proceeding for Bankruptcy on behalf of the
Partnership.
(d) Dissolve the Partnership.
49
Except as specifically provided in this Agreement, including, without
limitation, this Section 7.3, the Limited Partners shall have no right to vote
on any matter concerning the business and affairs of the Partnership, including,
without limitation, any decisions regarding the merger of the Partnership or the
sale, exchange, lease, mortgage or pledge or other transfer of, or the granting
of a security interest in; all or substantially all of the assets of the
Partnership and the incurrence of indebtedness by the Partnership, whether or
not in the ordinary course of the Partnership's business.
7.4. Actions with Respect to Certain Documents. Notwithstanding the
provisions of Section 7.3 hereof to the contrary, whenever the consent,
agreement, authorization or approval of the Partnership is required under any
agreement which the Limited Partners or their Affiliates have executed other
than in their capacities as Limited Partners of the Partnership, the Consent of
the Limited Partners shall not be required.
7.5. Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and effect such certificate, document or
instrument, this Agreement was in full force and effect; (ii) the Person
executing and delivering
50
such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership; and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.
7.6. Company Participation. The Company agrees that all business
activities of the Company, including without limitation all activities
pertaining to the acquisition, development, ownership, management and leasing of
real properties, shall be conducted, directly or indirectly, through the
Partnership (except for: (i) property management and leasing activities
conducted through the Management Company pursuant to the Management Agreement;
and (ii) the Company's direct and indirect interests in any Property
Partnerships or subsidiaries other than through the Partnership). The Company
agrees that all borrowings for the purpose of making distributions to its
stockholders will be incurred by the Partnership or by one or more of the
Property Partnerships and the proceeds of such indebtedness will be included as
Net Financing Proceeds hereunder.
7.7. Proscriptions. Except as otherwise expressly authorized herein,
the General Partner shall not have the authority to:
(a) Do any act in contravention of this Agreement or which
would make it impossible to carry on the ordinary business of the
Partnership;
(b) Possess any Partnership property or assign rights in
specific Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law. Nothing
herein contained shall impose any obligation on any Person or firm
doing business with the Partnership to inquire as to whether or not the
General Partner has properly exercised its authority in executing any
contract, lease, mortgage, deed or other instrument on behalf of the
Partnership, and any such third Person shall be fully protected in
relying upon such authority.
7.8. Additional Partners. The General Partner shall have the right to
admit additional Partners to the Partnership in accordance with the provisions
of this Agreement.
51
7.9. Title Holder. To the extent allowable under applicable law, title
to all or any part of the Properties of the Partnership may be held in the name
of the Partnership or in the name of any other Person, provided, however, that
all of the beneficial interest in such Properties shall at all times be vested
in the Partnership. Any such title holder shall perform any and all of its
respective functions to the extent and upon such terms and conditions as may be
determined from time to time by the General Partner, consistent with the
business purposes of the Partnership.
7.10. Compensation of the General Partner. The General Partner shall
not be entitled to any compensation for services rendered to the Partnership
solely in its capacity as General Partner except with respect to reimbursement
for those costs and expenses constituting Administrative Expenses.
7.11. Waiver and Indemnification.
(a) Neither the General Partner nor any Person acting on its behalf,
pursuant hereto, shall be liable, responsible or accountable in damages or
otherwise to the Partnership or to any Partner for any acts or omissions
performed or omitted to be performed by them within the scope of the authority
conferred upon the General Partner by this Agreement and the Act, provided that
the General Partner's or such other Person's conduct or omission to act was
taken in good faith and in the belief that such conduct or omission was in the
best interests of the Partnership and, provided further, that the General
Partner or such other Person shall not be guilty of fraud, misconduct or gross
negligence. The Partnership shall, and hereby does, indemnify and hold harmless
the General Partner and its Affiliates and any individual acting on their behalf
from any loss, damage, claim or liability, including, but not limited to,
reasonable attorneys' fees and expenses, incurred by them by reason of any act
performed by them in accordance with the standards set forth above or in
enforcing the provisions of this indemnity; provided, however, no Partner shall
52
have any personal liability with respect to the foregoing indemnification, any
such indemnification to be satisfied solely out of the assets of the
Partnership.
(b) Any Person entitled to indemnification under this Agreement shall
be entitled to receive, upon application therefor, advances to cover the costs
of defending any proceeding against such Person; provided, however, that such
advances shall be repaid to the Partnership, without interest, if such Person is
found by a court of competent jurisdiction upon entry of a final judgment not to
he entitled to such indemnification. All rights of the indemnitee hereunder
shall survive the dissolution of the Partnership; provided, however, that a
claim for indemnification under this Agreement must be made by or on behalf of
the Person seeking indemnification prior to the time the Partnership is
liquidated hereunder. The indemnification rights contained in this Agreement
shall be cumulative of, and in addition to, any and all rights, remedies and
recourse to which the person seeking indemnification shall be entitled, whether
at law or at equity. Indemnification pursuant to this Agreement shall be made
solely and entirely from the assets of the Partnership and no Partner shall be
liable therefor.
7.12. Limited Partner Representatives. Upon written notice to the
General Partner, any Limited Partner or group of Limited Partners may appoint a
representative to act on its or their behalf with respect to all Partnership
matters, including exercising all voting rights of the Partnership Units owned
by such Limited Partner. Whenever, under the terms of this Agreement, matters
require the Consent of the Limited Partners, the same shall mean the consent of
Limited Partner Representatives entitled to exercise voting rights with respect
to a majority of the Partnership Units entitled to vote thereon, and any action
taken by the Limited Partner Representatives shall be fully binding on the
Limited Partners; it being the intention of the Limited Partners that the
Limited Partner Representatives shall have full power and authority, to
53
take all
action, or to authorize all action, which the Limited Partners are entitled to
take or authorize under the provisions of this Agreement. Any appointments of
Limited Partner Representatives made pursuant to this Section 7.12 shall remain
effective until rescinded in a written notice to the General partner, and the
General Partner shall have the right and authority to rely (and shall be fully
protected in so doing) on the actions taken and directions given by such Limited
Partner Representatives without any further evidence of their authority or
further action by the Limited Partners that appointed them. Each of the Limited
Partners (identified on Exhibit G hereto) hereby appoints JRI (or any person or
entity appointed by JRI upon written notice to the General Partner; JRI, or such
person or entity appointed by JRI upon written notice to the General Partner, is
referred to herein as the "Xxxxxx Limited Partner Representative") as his, her
or Limited Partner Representative with respect to all of the Partnership Units
now or hereafter owned by such Limited Partner and such appointment shall remain
effective with respect to each such Limited Partner and each transferee of the
Partnership Units of each such Limited Partner until rescinded with respect to
such Limited Partner or transferee in a written notice from that Limited Partner
or transferee to the General Partner.
7.13. Operation in Accordance with REIT Requirements. The Partners
acknowledge and agree that the Partnership shall be operated in a manner that
will enable the Company to (a) satisfy the REIT Requirements and (b) avoid the
imposition of any federal income or excise tax liability. The Partnership shall
avoid taking any action, or permitting to take any action, which would result in
the Company ceasing to satisfy the REIT Requirements or would result in the
imposition of any federal income or excise tax liability on the Company. The
determination as to whether the Partnership has operated in the manner
prescribed in this Section 7.13 shall be made without regard to any action or
inaction of the Company with respect to distributions and
54
the timing thereof.
7.14. Transactions with Affiliates. The Partnership may lend or
contribute funds to its subsidiaries or other Entities in which it has an equity
investment, and such Entities may borrow funds from the Partnership, on terms
and conditions established in the discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Person. The Partnership may also engage in other transactions and enter into
contracts with an Affiliate of any Partner, which transactions and contracts are
on terms fair and reasonable to the Partnership and no less favorable to the
Partnership than would be obtained from unaffiliated third parties, provided
however, that the affirmative determination by the Company's board of directors
shall determine conclusively that a transaction or contract between the
Partnership on the one hand and the General Partner or the Company on the other
hand satisfies such requirement.
7.15. Other Matters Concerning the General Partner.
(a) The General Partner may rely and shall be protected in
acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, or other document believed by it to be genuine and
to have been signed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's professional
expertise shall be conclusively presumed to have been done or omitted in good
faith and in accordance with such opinion.
(c) The General Partner shall have the right, in respect of
any of its powers or
55
obligations hereunder, to act through any of its duly
authorized officers and any attorney or attorneys-in-fact duly appointed by the
General Partner. Each such attorney shall, to the extent provided by the General
Partner in the power of attorney, have full power and authority to do and
perform all and every act and duty which is permitted or required to be done by
the General Partner hereunder.
(d) Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect or further the ability of the
Company to continue to qualify as a REIT or (ii) to avoid the Company incurring
any taxes under Section 857 or Section 4981 of the Code, is expressly authorized
under this Agreement and is deemed approved by all of the Limited Partners.
Nothing however in this Agreement shall be deemed to give rise to any liability
on the part of the Limited Partners for the Company's failure to qualify or
continue to qualify as a REIT or failure to avoid incurring any taxes under the
foregoing Sections of the Code.
ARTICLE VIII.
Dissolution, Liquidation and Winding-Up
8.1. Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified)
shall be made of the Capital Account of each Partner and of the Net Income or
Net Losses of the Partnership from the date of the last previous accounting to
the date of dissolution. Financial statements presenting such accounting shall
include a report of a national certified public accountant (which may be the
Accountant) selected by the Liquidating Trustee.
56
8.2. Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than
Partners) in the order of priority as provided by law;
(b) Establishment of reserves as provided by the Liquidating
Trustee to provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any,
in the order of priority provided by law; and
(d) To the Partners in accordance with the positive balances
in their Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods, including the period in
which such distribution occurs (other than those adjustments made
pursuant to this Section 8.2(d), Section 8.4 or Section 8.5 hereof).
Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (b) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in accordance with the above provisions.
Notwithstanding the foregoing, all distributions pursuant to this Section 8.2
shall remain subject to the provisions of (i) the Certificate of Designation for
each class or series of Preferred Units set forth in Exhibit B hereto; (ii)
Exhibit E hereto with respect to the SCUs, (iii) Exhibit H with respect to the
S-SCUs and (iv) Exhibit J with respect to the L-SCUs.
8.3. Timing Requirements. In the event that the Partnership is
"liquidated" within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, any and all distributions to the Partners pursuant to Section
8.2(d) hereof shall be made no later than the later to occur of (i) the last day
of the taxable year of the Partnership in which such liquidation occurs or (ii)
ninety (90) days after the date of such liquidation.
8.4. Sale of Partnership Assets. In the event of the liquidation of the
Partnership in accordance with the terms of this Agreement, the Liquidating
Trustee may sell Partnership or Property Partnership property or Property
Partnership interests on the best terms and conditions as the Liquidating
Trustee in good faith believes are reasonably available at the time and under
57
the circumstances and on a non-recourse basis to the Limited Partners. The
liquidation of the Partnership shall not be deemed finally completed until the
Partnership shall have received cash payments in full with respect to
obligations such as notes, installment sale contracts or other similar
receivables received by the Partnership in connection with the sale of
Partnership assets and all obligations of the Partnership have been satisfied,
released or assumed by the General Partner. The Liquidating Trustee shall
continue to act to enforce all of the rights of the Partnership pursuant to any
such obligations until such obligations are paid in full or otherwise satisfied.
8.5. Distributions in Kind. In the event that it becomes necessary to
make a distribution of Partnership property in kind, the General partner may
Transfer and convey such property to the distributees as tenants in common,
subject to any liabilities attached thereto, so as to vest in them undivided
interests in the whole of such property in proportion to their respective rights
to share in the proceeds of the sale of such property (other than as a creditor)
in accordance with the provisions of Section 8.2 hereof.
8.6. Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
8.7. Liability of the Liquidating Trustee. The Liquidating Trustee
shall be indemnified and held harmless by the Partnership from and against any
and all claims, demands, liabilities, costs, damages and causes of action of any
nature whatsoever arising out of or incidental to the Liquidating Trustee's
taking of any action authorized under or within the scope of this Agreement;
provided, however, that the Liquidating Trustee shall not be entitled to
indemnification, and shall not be held harmless, where the claim, demand,
liability, cost, damage
58
or cause of action at issue arose out of:
(a) A matter entirely unrelated to the Liquidating Trustee's
action or conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or gross negligence of the
Liquidating Trustee.
ARTICLE IX.
Transfer of Partnership Units
9.1. General Partner Transfer. The General Partner shall not withdraw
from the Partnership and shall not sell, assign, pledge, encumber or otherwise
dispose of all or any portion of its Partnership Units, in each case prior to
the dissolution and winding up of the Partnership, without the Consent of the
Limited Partners. Upon any Transfer of a Partnership Unit in accordance with the
provisions of this Section 9.1, the transferee General Partner shall become
vested with the powers and rights of the transferor General Partner, and shall
be liable for all obligations and responsible for all duties of the General
Partner, once such transferee has executed such instruments as may be necessary
to effectuate such admission and to confirm the agreement of such transferee to
be bound by all the terms and provisions of this Agreement with respect to the
Partnership Unit so acquired. It is a condition to any Transfer otherwise
permitted hereunder that the transferee assume by operation of law or express
agreement all of the obligations of the transferor General Partner under this
Agreement with respect to such transferred Partnership Units and no such
Transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor General Partner are assumed by a
successor corporation or other Entity to the General Partner by operation of
law) shall relieve the transferor General Partner of its obligations under this
Agreement without the Consent of the Limited Partners, in their reasonable
discretion. In the event the General Partner withdraws from the Partnership in
violation of this Agreement or otherwise, dissolves or terminates or upon the
Bankruptcy of the General Partner, (i) any remaining general partner may
continue the Partnership business or (ii) within 90 days thereafter, all of the
remaining Partners
59
(or, to the extent permitted under the Act, such lesser
number or percentage of the Partners, but in no case less than a
Majority-in-Interest of the Limited Partners) may elect to continue the business
of the Partnership by selecting a substitute General Partner, which substitute
General Partner accepts such election and agrees to serve as the General
Partner.
Such successor General Partner shall thereupon succeed to the rights
and obligations of the General Partner as provided in this Section 9.1.
9.2. Transfers by Limited Partners.
(a) Subject to the provisions of Section 9.3 hereof, each
Limited Partner shall have the right to Transfer all or a portion of its
Partnership Units to any Person that is the Immediate Family of such Limited
Partner, an Affiliate of such Limited Partner, another Limited Partner, an
institutional lender as security for a bona fide obligation of such Limited
Partner, a bona fide pledge after a default in the obligation secured by the
pledge (or to a bona fide purchaser for value from such pledge), provided in
each such case that prior written notice of the proposed Transfer is delivered
to the General Partner. Any transfer of Partnership Units permitted by the first
sentence of this Section 9.2(a) or by any other provision of this Agreement
(including, for example, Section 9.2(c) and Paragraph 8 of Exhibit E)
automatically will be admitted as a Substituted Limited Partner upon the filing
with the Partnership of (A) a duly executed and acknowledged instrument of
assignment between the transferor and the transferee specifying the Partnership
Units 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 Partnership Units being assigned and agreement of the transferee
assuming all of the obligations of a Limited Partner under this Agreement with
respect to such transferred Partnership Units accruing from and after the date
of transfer, (B) a duly executed and acknowledged instrument
60
by which the
transferee confirms to the Partnership that it accepts and adopts the provisions
of this 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 Partnership sufficient to cover the reasonable expenses of
the transfer, if any.
(b) Except as set forth in Section 9.2(a) above, or elsewhere
in this Agreement (including Section 9.2(c) and Paragraph 8 of Exhibit E), no
Transfer of a Limited Partner's Partnership Units may be effected without the
consent of the General Partner, which consent may be given, withheld or
conditioned in the General Partner's sole and absolute discretion. A transferee
of Partnership Units shall be deemed to be an Assignee with respect to such
Partnership Units, but shall not become or be admitted to the Partnership as a
Substituted Limited Partner without the consent of the General Partner, which
consent may be given or withheld in the General Partner's sole and absolute
discretion. An Assignee shall be entitled as a result of such Transfer only to
receive the economic benefits of the Partnership Units to which the transferor
Limited Partner would otherwise be entitled, along with such transferor Limited
Partner's rights with respect to the Rights or such other exchange rights as are
applicable to the Transferred Partnership Units (although any transferee of any
Transferred Partnership Units shall be subject to any and all ownership
limitations contained in the corporate charter of the Company as may be amended
from time to time), and such Assignee shall have no right (i) to participate in
the management of the Partnership or to vote on any matter requiring the consent
or approval of the Limited Partners, (ii) to demand or receive any account of
the Partnership's business, or (iii) to inspect the Partnership's books and
records, unless and until such Assignee is admitted to the partnership as a
Substituted Limited Partner. In addition, unless and until a transferee is
admitted to the Partnership as a Substituted Limited Partner, the transferor
Limited
61
Partner shall not be relieved of its obligations under this Agreement
(except in the case of the Transfer pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Limited
Partner are assumed by a successor corporation or other Entity by operation of
law). A transferee of Partnership Units may become a Substituted Limited Partner
only upon the satisfaction of the following conditions: (A) the filing with the
Partnership of a duly executed and acknowledged written instrument of assignment
between the transferor and the transferee in a form approved by the General
Partner specifying the Partnership Units 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 Partnership Units being
assigned and agreement of the transferee assuming all of the obligations of a
Limited Partner under this Agreement with respect to such transferred
Partnership Units accruing from and after the date of transfer; (B) execution
and acknowledgment by the transferor Limited Partner and such transferee of any
other instruments required in the sole and absolute discretion of the General
Partner, including the acceptance and obligation by such transferee of the
provisions of this Agreement; (C) obtaining the written consent of the General
Partner as provided in the second sentence of this Section 9.2(b); and (D)
payment of a transfer fee to the Partnership, sufficient to cover the reasonable
expenses of the substitution, if any. Any transferee, whether or not admitted as
a Substituted Limited Partner, shall take its rights to the transferred
Partnership Units subject to the obligations of the transferor Limited Partner
hereunder.
(c) The Approved Transfers permitted in Paragraph 8 of Exhibit
E hereto shall also be available, mutatis mutandis, to holders of any Common
Units issued in exchange for or upon the redemption of SCUs.
(d) The applicable Approved Transfers permitted in Paragraph 8
of Exhibit H
62
hereto shall also be available, mutatis mutandis, to holders of any
Common Units issued in exchange for or upon the redemption of S-SCUs.
(e) The applicable Approved Transfers permitted in Paragraph 8
of Exhibit J hereto shall also be available, mutatis matandis, to holders of any
Common Units issued in exchange for or upon the redemption of L-SCUs. 9.3.
Restrictions on Transfer. In addition to any other restrictions on Transfer
herein contained, in no event may any Transfer of a Partnership Unit by any
Partner be made and in no event shall Additional Units be issued (i) to any
Person or Entity who or which lacks the legal right, power or capacity to own a
Partnership Unit, or, except with the prior written consent of the General
Partner, to a Person or Entity which is not an "Accredited Investor" within the
meaning of Regulation D promulgated by the SEC under the Securities Act; (ii) in
violation of any provision of any mortgage or trust deed (or the note or bond
secured thereby) constituting a Lien against a Property or any part thereof, or
other instrument, document or agreement to which the Partnership or any Property
Partnership is a party or otherwise bound (including, without limitation, the
organizational documents of any Property Partnership); (iii) in violation of
applicable law; (iv) of any component portion of a Partnership Unit, such as the
Capital Account, or rights to Net Cash Flow, separate and apart from all ether
components of a Partnership Unit; (v) in the event such Transfer would cause the
Company to cease to comply with the REIT Requirements; (vi) if such Transfer
would cause a termination of the Partnership for federal income tax purposes
(except with the Consent of the General Partner and the Consent of the Limited
Partners); (vii) if such Transfer would, in the opinion of counsel to the
Partnership, cause the Partnership to cease to be classified as a partnership
for federal income tax purposes; (viii) if such Transfer would cause the
Partnership to become, with respect to any employee
63
benefit plan subject to
Title 1 of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(c) of the Code); (ix) if
such Transfer would, in the opinion of counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; (x)
if such Transfer would result in (A) the transferor or the transferee owning
Common Units having a value (computed as of the date of such proposed Transfer
by multiplying the Common Stock amount with respect to such Common Units by the
Current Per Share Market Price) less than $250,000, unless either the transferee
is an existing Limited Partner or the General Partner has consented to such
issuance or transfer, or (B) the transferee owning Common Units having a value
(computed as of the date of such proposed Transfer by multiplying the Common
Stock Amount with respect to such Common Units by the Current Per Share Market
Price) less than $250,000, unless such Common Units constitute all of the Common
Units then owned by such transferor or the General Partner has consented to such
issuance or transfer; (xi) if such Transfer or issuance may not be effected
without registration of such Partnership Units under the Securities Act, would
require filing of a registration statement under the Securities Act, or would
otherwise violate any Federal, state or foreign securities laws or regulations
applicable to the Partnership or such Partnership Units; (xii) if such Transfer
or issuance would violate any provision of the Company's certificate of
incorporation as such may be amended from time to time; (xiii) to a lender to
the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a "nonrecourse liability" (within the meaning of Section
1.752-1(a)(2) of the Regulations) without the consent of the General Partner, in
its sole and absolute discretion, unless the Partnership's basis for tax
purposes would not be reduced as a result of such Transfer;
64
(xiv) except with
the express written consent of the General Partner, if such Transfer, in the
opinion of counsel to the General Partner, would result in either the
Partnership having more than one hundred Partners or in the Partnership being
classified as a "publicly traded partnership" within the meaning of the Code and
the Regulation; (xv) except with the express written consent of the General
Partner, to any entity that is a partnership, grantor trust or S corporation if
(A) substantially all of the value of the interest of a person owning an
interest in such entity is attributable to the entity's (direct or indirect)
interest in a Unit, and (B) a principal purpose of the use of the tiered
arrangement is to permit the Partnership to satisfy the 100-person limitation in
paragraph (h) (i) (ii) of Section 1.7704-1 of the Regulations; or (xvi) except
with respect to (A) transfers qualifying as "private Transfer" for purposes of
Regulations Section 1.7704-1(e) or any successor provision or (B) up to two
Transfers (excluding for this purpose, transfers qualifying as "private
transfers") of interests directly or indirectly held by the estate of or other
successor to, a person that has died within the preceding twelve (12) months, if
the General Partner determines in its reasonable discretion that if it permitted
such transfer the Partnership would be unable to obtain an opinion of counsel
recognized standing to the effect that the Partnership should not be treated as
a "publicly traded partnership" within the meaning of Section 7704(b) of the
Code.
ARTICLE X.
Rights and Obligations of the Limited Partners
10.1. No Participation in Management.
(a) Except as expressly permitted hereunder, the Limited Partners, in
their capacities as Limited Partners of the Partnership, shall not take part
in the management of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents
65
for or otherwise bind
the Partnership, provided, however, that nothing in the foregoing shall be
deemed to prohibit or preclude any Limited Partner or its Affiliates from
serving as an officer, director or employee of the Company, the General
Partner or Management Company or otherwise transacting business with the
Partnership.
(b) In addition to other rights provided by this Agreement or by the
Act, each Limited Partner shall have the right, for a purpose reasonably related
to such Limited Partner's interest as a limited partner in the Partnership, upon
written demand with a statement of the purpose of such demand and at such
Limited Partner's own expense (including such copying and administrative charges
as the General Partner may establish from time to time):
(1) to obtain a copy of the most recent annual and
quarterly reports filed with the Securities and Exchange Commission by
the General Partner pursuant to the Securities Exchange Act of 1934;
(2) to obtain a copy of the Partnership's federal,
state and local income tax returns for each Partnership Year;
(3) to obtain a current list of the name and last
known business, resident or mailing address of each Partner; and
(4) to obtain a copy of this Agreement and the
Certificate of Limited Partnership and all amendments thereto, together
with executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate and all amendments thereto have been
executed.
10.2. Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Net Income or Net Losses of the Partnership and
to receive distributions of Partnership funds shall, on the happening of such
event, devolve on its successors or assigns, subject to the terns and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
In no event, however, shall such assignee(s) become an Assignee Limited Partner
except in accordance
66
with Article IX hereof.
10.3. No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other than
as expressly provided in this Agreement.
10.4. Duties and Conflicts. The General Partner recognizes that certain
of the Limited Partners and their Affiliates have or may have other business
interests, activities and investments, some of which may be in conflict or
competition with the business of the Partnership, and that such Persons are
entitled to carry on such other business interests, activities and investments.
Such Limited Partners and their Affiliates may engage in or possess an interest
in any other business or venture of any kind, independently or with others, on
their own behalf or on behalf of other entities with which they are affiliated
or associated, and such Persons may engage in any activities, whether or not
competitive with the Partnership, without any obligation to offer any interest
in such activities to the Partnership or to any Partner. Neither the Partnership
nor any Partner shall have any right, by virtue of this Agreement, in or to such
activities, or the income or profits derived therefrom, and the pursuit of such
activities, even if competitive with the business of the Partnership, shall not
be deemed wrongful or improper.
10.5. Limited Liability. No Limited Partner shall be bound, or
personally liable for, the expenses, liabilities or obligations of the
Partnership, except as provided by this Agreement or the Act.
ARTICLE XI.
Grant of Rights to Limited Partners
11.1. Grant of Rights. The Company does hereby grant to each Limited
Partner, and each of the Limited Partners does hereby accept, the right, but not
the obligation (hereinafter
67
referred to as the "Rights"), to require the Company
and the General Partner to exchange part or all of the Limited Partner's Common
Units for shares of Common Stock or their cash equivalent, at the Company's
election, at any time or from time to time prior to November 3, 2043, on the
terms and subject to the conditions and restrictions contained in Exhibit D
hereto. The Rights granted hereunder may be exercised by any one or more of the
Limited Partners, on the terms and subject to the conditions and restrictions
contained in Exhibit D hereto, upon delivery to the Company of an Exchange
Notice, which notice shall specify the number of Common Units to be exchanged by
such Limited Partner. Once delivered, the Exchange Notice shall be irrevocable,
subject to delivery by the Company or the General Partner of the exchange
consideration in respect of the Common Units being exchanged in accordance with
the terms hereof. Notwithstanding the forgoing, upon the issuance of any Common
Units the General Partner and the Partner to who such Common Units are issued
may agree that such Common Units are not entitled to the Rights. Notwithstanding
the foregoing, the rights in respect of the Common Units issued upon the
redemption or exchange of SCUs shall be subject to the terms, conditions and
restrictions set forth in Exhibit F hereto and the Rights in respect of the
Common Units issued upon the redemption or exchange of S-SCUs shall be subject
to the terms, conditions and restrictions set forth in Exhibit I hereto.
11.2. Terms of Rights. The terms and provisions applicable to the
Rights shall be as set forth in attached Exhibit D. Notwithstanding the
foregoing, the terms and provisions applicable to the Rights in respect of the
Common Units issued upon the redemption or exchange of SCUs shall be as set
forth in Exhibit F hereto and the terms and provisions applicable to the Rights
in respect of the Common Units issued upon the redemption or exchange of S-SCUs
shall be as set forth in Exhibit I hereto.
68
ARTICLE XII.
Indemnification
12.1. Indemnification of the Limited Partners. From and after the date
hereof, the Partnership shall indemnify and hold harmless each of the Limited
Partners and its Affiliates against and from all liability, demands, claims,
actions or causes of action, assessments, losses, fines, penalties, costs,
damages and expenses (including, without limitation, reasonable attorneys' and
accountants' fees and expenses) (each, a "Claim") sustained or incurred by such
Limited Partner or Affiliate or any assignee or successor thereof (including,
without limitation, any Assignee Limited Partner) as a result of or arising out
of any Assumed Liability. If a claim for indemnification is asserted against the
Partnership hereunder, the Partnership shall have the right, at its own expense,
to participate in the defense of any Claim asserted against such Limited Partner
or its Affiliate which resulted in the claim for indemnification, and if such
right is exercised, the parties shall cooperate in the defense of such action or
proceeding.
12.2. Indemnification of the General Partner, the Company and Others.
From and after the date hereof, the Partnership shall indemnify and hold
harmless each of the General Partner, the Company and any officer; director,
employee or agent of any of the Partnership, the General Partner or the Company
against and from all for the same matters and to the same extent as the Company
is entitled to indemnify its officers, directors, employees or agents pursuant
to the Company's certificate of incorporation, as such may be amended from time
to time.
ARTICLE XIII.
Arbitration of Disputes
13.1. Arbitration. Notwithstanding anything to the contrary contained
in this Agreement, all claims, disputes and controversies between the parties
hereto (including, without limitation, any claims, disputes and controversies
between the Partnership and any one or more
69
of the Partners and any claims,
disputes and controversies between any one or more Partners) arising out of or
in connection with this Agreement or the Partnership created hereby, relating to
the validity construction, performance, breach, enforcement or termination
thereof, or otherwise, shall he resolved by binding arbitration in New York, New
York, in accordance with this Article XIII and to the extent not inconsistent
herewith, the Expedited Procedures and Commercial Arbitration Rules of the
American Arbitration Association or any successor thereto.
13.2. Procedures. Any arbitration called for by this Article XIII shall
be conducted in accordance with the following procedures:
(a) The Partnership or any Partner (the "Requesting Party")
may demand arbitration pursuant to Section 13.1 hereof at any time by
giving written notice of such demand (the "Demand Notice") to all other
Partners and (if the Requesting Party is not the Partnership) to the
Partnership, which Demand Notice shall describe in reasonable detail
the nature of the claim, dispute or controversy.
(b) Within fifteen (15) days after the giving of a Demand
Notice, the Requesting Party, on the one hand, and each of the other
Partners and/or the Partnership against whom the claim has been made or
with respect to which a dispute has arisen (collectively, the
"Responding Party"), on the other hand, shall select and designate in
writing to the other party one reputable, disinterested individual (a
"Qualified Individual") willing to act as an arbitrator of the claim,
dispute or controversy in question. Each of the Requesting Party and
the Responding Party shall use their best efforts to select a present
or former partner of a national accounting firm having no affiliation
with any of the parties as their respective Qualified Individual to act
as the second arbitrator. Within fifteen (15) days after the foregoing
selections have been made, the arbitrators so selected shall jointly
select a present or former partner of a national accounting firm having
no affiliation with any of the parties as the third Qualified
Individual willing to act as an arbitrator of the claim, dispute or
controversy in question. In the event that the two arbitrators
initially selected are unable to agree on a third arbitrator within the
second fifteen (15) day period referred to above, then, on the
application of either party, the American Arbitration Association shall
promptly select and appoint a present or former partner of a national
accounting firm having no affiliation with any of the parties as the
Qualified Individual to act as the third arbitrator. The three
arbitrators selected pursuant to this subsection (b) shall constitute
the arbitration panel for the arbitration in question.
(c) The presentations of the parties hereto in the arbitration
proceeding shall be commenced and completed within sixty (60) days
after the selection of the arbitration panel pursuant to subsection (b)
above, and the arbitration panel shall render its decision in writing
within thirty (30) days after the completion of such presentations. Any
decision
70
concurred in by any two (2) of the arbitrators shall
constitute the decision of the arbitration panel, and unanimity shall
not be required.
(d) The arbitration panel shall have the discretion to include
in its decision a direction that all or part of the attorneys' fees and
costs of any party or parties and/or the costs of such arbitration be
paid by any other party or parties. On the application of a party
before or after the initial decision of the arbitration panel, and
proof of its attorneys' fees and costs, the arbitration panel shall
order the other party to make any payments directed pursuant to the
preceding sentence.
13.3. Binding Character. Any decision rendered by the arbitration panel
pursuant to this Article XIII shall be final and binding on the parties hereto,
and judgment thereon may be entered by any state or federal court of competent
jurisdiction.
13.4. Exclusivity. Arbitration shall be the Exclusive method available
for resolution of claims, disputes and controversies described in Section 13.1
hereof, and the Partnership and its Partners stipulate that the provisions
hereof shall be a complete defense to any suit, action, or proceeding in any
court or before any administrative or arbitration tribunal with respect to any
such claim, controversy or dispute. The provisions of this Article XIII shall
survive the dissolution of the Partnership.
13.5. No Alteration of Agreement. Nothing contained herein shall be
deemed to give the arbitrators any authority, power or right to alter, change,
amend modify, add to, or subtract from any of the provisions of this Partnership
Agreement.
ARTICLE XIV
General Provisions
14.1 Notices. All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and may be
personally served, telecopied or sent by United States mail and shall be deemed
to have been given when delivered in person, upon receipt of telecopy or three
business days after deposit in United States mail registered or certified,
postage prepaid, and properly addressed by or to the appropriate party. For
purposes
71
of this Section 14.1, the address of the General Partner shall be: 2030
Xxxxxxxx Place Boulevard, Suite 500, CBL Center, Xxxxxxxxxxx, Xxxxxxxxx 00000
(telecopier number (000) 000-0000) and the address of each of the Limited
Partners shall be c/o CBL & Associates Properties, Inc., 2030 Xxxxxxxx Place
Boulevard, Suite 500, CBL Center, Xxxxxxxxxxx, Xxxxxxxxx 00000 (telecopier
number (000) 000-0000). The address of any party hereto may be changed by a
notice in writing given in accordance with the provisions hereof.
14.2. Successor. This Agreement and all the terms and provisions hereof
shall be binding upon and shall inure to the benefit of all Partners, and their
legal representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
14.3. Effect and Interpretation. This Agreement shall be governed by
and construed in conformity with the laws of the State of Delaware.
14.4. Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
14.5. Partners Not Agents. Nothing contained herein shall be construed
to constitute any Partner the agent of another Partner, except as specifically
provided herein, or in any manner to limit the Partners in the carrying on of
their own respective businesses or activities. Notwithstanding anything to the
contrary contained herein, no recourse shall be had by the Partnership or any
Partner against any director, shareholder, officer, employee, agent or attorney
of the General Partner acting in such capacity for any act or omission of the
General Partner or any obligation or liability of the General Partner under this
Agreement, and none of the foregoing shall have any personal liability for or
with respect to any of the foregoing.
14.6. Entire Understanding; Etc. This Agreement constitutes the entire
agreement and understanding among the Partners and supersedes any prior
understandings and/or written or oral
72
agreements among them respecting the subject matter within.
14.7. Amendments.
(a) Except to the extent expressly otherwise provided herein
(including, without limitation, in Section 14.7(b) below), this Agreement may
not be amended unless such amendment is approved by the General Partner with the
prior Consent of the Limited Partners; provided that no amendment of this
Agreement may be made without the consent of all of the affected Limited
Partners if such amendment (i) converts any Limited Partner's interest in the
Partnership into a general partnership interest (other than the General Partner
if the General Partner is also a Limited Partner), (ii) modifies the limited
liability of any Limited Partner if the General Partner is also a Limited
Partner), or (iii) alters or modifies the Rights set forth in Article XI in a
manner adverse to such Partner.
(b) Notwithstanding anything to the contrary provided in
Section 14.7(a) above, the General Partner shall have the power, without the
consent of any Limited Partner, to amend this Agreement as may be required to
facilitate or implement any of the following:
(i) to add to the obligations of the General
Partner or surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited Partners;
(ii) to reflect the admission, substitution,
termination, or withdrawal of Partners in
accordance with this Agreement;
(iii) to set forth the rights, powers and
duties of the holders of any Additional Units
issued pursuant to Section 4.4(a) hereof (including, without
limitation, amending the distribution and allocation provisions set
forth herein);
(iv) to reflect any change that does not
adversely affect the Limited Partners in any
material respect, to cure any ambiguity, to correct or supplement any
defective provision in this Agreement, or to make other changes with
respect to matters arising under this Agreement that will not be
inconsistent with any other provision of this Agreement; and
(v) to satisfy any requirements, conditions~
or guidelines
73
contained in any order, directive, opinion, ruling or regulations of
a Federal or state agency or contained in Federal or state law.
(c) This Section 14.7 may not be amended except with the prior
written consent of all the Partners. 14.8. Severability. If any
provision of this Agreement, or the application of such provision to
any person or
circumstance, shall be held invalid by a court of competent jurisdiction, the
remainder of this Agreement, or the application of such provision to persons or
circumstances other than those to which it is held invalid by such court, shall
not be affected thereby.
14.9. Pronouns and Headings. As used herein, all pronouns shall include
the masculine, feminine and neuter, and all defined terms shall include the
singular and plural thereof wherever the context and facts require such
construction. The headings, titles and subtitles herein are inserted for
convenience of reference only and are to be ignored in any construction of the
provisions hereof. Any references in this Agreement to "including" shall be
deemed to mean "including without limitation".
14.10. Assurances. Each of the Partners shall hereafter execute and
deliver such further instruments and do such further acts and things as maybe
required or useful to carry out the intent and purpose of this Agreement and as
are not inconsistent with the terms hereof.
14.11. Expenses. All expenses incurred by the Partners in negotiating,
drafting and executing this Agreement and the Exhibits hereto, including without
limitation all expenses of counsel, shall be borne and paid by the Partnership.
14.12. Waiver of Partition. Except as otherwise expressly provided for
in this Agreement, no Partner shall, either directly or indirectly, take any
action to require partition or
74
appraisement of the Partnership or any of its
assets or properties or cause the sale of any Partnership assets or property,
and notwithstanding any provision of applicable law to the contrary, each
Partner (for itself and its legal representatives, successors and assigns)
hereby irrevocably waives any and all right to partition, or to maintain any
action for partition, or to compel any sale with respect to its interest in, or
with respect to, any assets or properties of the Partnership, except as
expressly provided in this Agreement.
75
IN WITNESS WHEREOF, the General Partner has executed this
Third Amended and Restated Agreement as of the date first written above.
CBL HOLDINGS I, INC.
By:/s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice Chairman of the Board
And Chief Financial Officer
Accepted and Agreed:
CBL & ASSOCIATES PROPERTIES, INC.
By:/s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice Chairman of the Board
And Chief Financial Officer
Consented to:
CBL HOLDINGS II, INC.
By:/s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice Chairman of the Board
And Chief Financial Officer
76
ATTACHMENT 1-A
LIMITED PARTNER ACCEPTANCE
OF PARTNERSHIP AGREEMENT
This Limited Partner Acceptance of Partnership Agreement (this,
"Acceptance") is made as of ____ 2001, by ______, [a _____ organized under the
laws of the State of ____] (the "Limited Partner"), to and for the benefit of
CBL & Associates Limited Partnership, a Delaware limited partnership (the
"Partnership").
Capitalized terms used and not defined herein shall have the meaning
set forth in the Second Amended and Restated Agreement of Limited Partnership of
the Partnership, dated as of June 30, 1998 as amended through the date hereof
(the "Partnership Agreement").
WHEREAS, on the date hereof, [the partnership has agreed to issue to
the Limited Partner [______] SCUs (the "Units") in connection with the closing
of the transactions contemplated by the Master Contribution Agreement, dated as
of September 25, 2000, among the Partnership, CBL & Associates Properties, Inc.,
Xxxxxx Realty Investors Limited Partnership and Xxxxxxx X. Xxxxxx, solely as
Trustee of the Xxxxxxx X. Xxxxxx Revocable Living Trust and the Xxxxx X. Xxxxxx
Marital Trust, as amended] [____received [____] SCUs (the "Units") in connection
with the closing of the transactions contemplated by the Master Contribution
Agreement, dated as of September 25, 2000 (as amended, the "Master Contribution
Agreement"), among the Partnership CBL & Associates Properties, Inc., Xxxxxx
Realty Investors Limited Partnership and Xxxxxxx X. Xxxxxx, solely as Trustee of
the Xxxxxxx X. Xxxxxx Revocable Living Trust and the Xxxxx X. Xxxxxx Marital
Trust and transferred all of such Units to the Limited Partner, its designated
holding entity, as contemplated in the Master Contribution Agreement]; and
WHEREAS, in connection with the acceptance of the Units by the Limited
Partner, the Limited Partner has agreed to affirm its obligations as a limited
partner under the Partnership Agreement with respect to the Units and to confirm
the additional agreements set forth herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Limited Partner hereby
confirms that it has been given the opportunity to review the terms of the
Partnership Agreement and affirms and agrees that it is bound by each of the
terms and conditions of the Partnership Agreement applicable to a holder of
SCUs, including; without limitation, the provisions thereof relating to
limitations and restrictions on the transfer of SCUs.
IN WITNESS WHEREOF, the Limited Partner has caused this Acceptance to
be duly executed and delivered as of the date first written above.
[Insert Name of Limited Partner]
By:______________________________
Name:
77
Acknowledged and accepted:
CBL & Associates Limited Partnership
By: CBL Holdings I, Inc.,
General Partner
By:____________________
Name:
Title:
78
ATTACHMENT 1-B
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT
This Limited Partner Acceptance of Partnership Agreement (this
"Acceptance") is made as of ______, 2004, by _________, [a ________ organized
under the laws of the State of ____] (the "Limited Partner"), to and for the
benefit of CBL & Associates Limited Partnership, a Delaware limited partnership
(the "Partnership").
Capitalized terms used and not defined herein shall have the
meaning set forth in the Second Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of June 30, 1998, as amended through
the date hereof (the "Partnership Agreement").
WHEREAS, on the date hereof, the Partnership has agreed to
issue to the Limited Partner [_______] S-SCUs (the "Units") in connection with
the closing of the transactions contemplated by the Contribution and Exchange
Agreement, dated as of _____________, 2004 (as amended, the "Contribution
Agreement"), by and between Xxxxxx Xxxxxx, Xxxx Xxxxxx Leeds, Xxxxxx Xxxxxxx,
Pittsburg Mall Limited and Monroeville Mall Partners, L.P. (collectively, the
"Contributors") and the Partnership;
WHEREAS, in connection with the acceptance of the Units by the
Limited Partner, the Limited Partner has agreed to affirm its obligations as a
limited partner under the Partnership Agreement with respect to the Units and to
confirm the additional agreements set forth herein;
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Limited Partner
hereby confirms that it has been given the opportunity to review the terms of
the Partnership Agreement and affirms and agrees that it is bound by each of the
terms and conditions of the Partnership Agreement applicable to a holder of
S-SCUs, including, without limitation, the provisions thereof relating to
limitations and restrictions on the transfer of S-SCUs.
79
IN WITNESS WHEREOF, the Limited Partner has caused this
Acceptance to be duly executed and delivered as of the date first written above.
[Insert Name of Limited Partner]
---------------------------------
Name:
Acknowledged and accepted:
CBL & Associates Limited Partnership
By: CBL Holdings I, Inc.,
General Partner
By:___________________________
Name:
Title:
80
ATTACHMENT 1-C
LIMITED PARTNER ACCEPTANCE OF
PARTNERSHIP AGREEMENT
This Limited Partner Acceptance of Partnership Agreement (this
"Acceptance") is made as of June 1, 2005 by Xxxxxxxx Xxxxxx Park Retail Holding
LLC, a Michigan limited liability company (the "Limited Partner"), to and for
the benefit of CBL & Associates Limited Partnership, a Delaware limited
partnership ("the "Partnership").
Capitalized terms used and not defined herein shall have the
meaning set forth in the Second Amended and Restated Agreement of limited
partnership of the Partnership, dated as of June 30, 1998, as amended through
the date hereof (the "Partnership Agreement").
WHEREAS, on the date hereof, the Partnership has agreed to
issue the Limited Partner ________ L-SCUs (the "Units") in connection with the
closing of the transactions contemplated by that certain Contribution and
Exchange Agreement dated March 18, 2005 (the "Contribution Agreement"), by and
among Newburgh/Six Mile Limited Partnership, the Limited Partner and the
Partnership;
WHEREAS, in connection with the acceptance of the Units by the
Limited Partner, the Limited Partner has agreed to affirm its obligations as a
limited partner under the Partnership Agreement with respect to the Units and to
confirm the additional agreements set forth herein;
NOW THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Limited partner
herby confirms that it has been given the opportunity to review the terms of the
Partnership Agreement and affirms and agrees that it is bound by each of the
terms and conditions of the Partnership Agreement applicable to a holder of
L-SCUs, including, without limitation, the provisions thereof relating to
limitations and restrictions on the transfer of L-SCUs. The Limited Partner
hereby confirms that Informational Materials (as defined in the Contribution
Agreement).
[Signature on Next Page]
81
IN WITNESS WHEREOF, the Limited Partner has caused this
Acceptance to be duly executed and delivered as of the date first written above.
XXXXXXXX XXXXXX PARK
RETAIL HOLDING LLC
By:
-----------------------------------------
Name:
----------------------------------------
Title:
--------------------------------------
Acknowledged and accepted:
CBL & ASSOCIATES LIMITED
PARTNERSHIP
By: CBL Holdings I, Inc., its
general partner
By:
-----------------------------------------
Name:
Title:
82
EXHIBIT A
List of Partners, Percentage Interests, Share Equivalents
[Schedule will change as capital is contributed, partners are
redeemed and other matters impacting percentage interests according to the
terms of this Agreement. The General Partner shall revise this schedule from
time to time to
reflect the current status of the partners, their percentage
interests and share equivalents. A current copy of Exhibit A
is available on request by any Partner by request of such
Partner to the General Partner.]
Form of Exhibit A
General Partner Percentage Interest Share Equivalents
Limited Partners*1 Percentage Interests Share Equivalents
*1 - Exhibit A denotes the type of Units a Limited Partner may hold,
i.e., Common Units, SCUs, S-SCUs and L-SCUs.
83
EXHIBIT B
CERTIFICATE OF DESIGNATION
OF
9.0% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership
WHEREAS, CBL & Associates Properties, Inc. (the "Company")
has issued 2,875,000 shares (the "Offering") of
9.0% Series A Cumulative Redeemable Preferred Stock (the "Preferred Stock");
WHEREAS, the Company and the Operating Partnership desire that
the Company contribute net proceeds of the Offering to CBL & Associates Limited
Partnership (the "Operating Partnership") in exchange for preferred units having
substantially the same economic rights and terms of the Preferred Stock;
WHEREAS, Article 4.4 of the Second Amended and Restated
Partnership Agreement of the Operating Partnership (the "Partnership Agreement")
provides for a Preferred Unit Designation, setting forth, in sufficient detail,
the economic rights and terms of the class or series of preferred units.
NOW THEREFORE, CBL Holdings I, Inc., the partner of the
Operating Partnership (the "General Partner") hereby designates a series of
preferred units and fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such preferred units, as follows:
1. Designation and Amount.
The units of such series shall be designated "9.0% Series A Cumulative
Redeemable Preferred Units" the ("Series A Preferred Units") and the number of
units constituting such series shall be 2,875,000. The designations, powers,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the Series A
Preferred Units shall be subject in all cases to the provisions of the
Partnership Agreement.
(a) Holders of Series A Preferred Units shall be entitled to
receive, when, as and if declared by the General partner, out of assets of the
Operating Partnership legally available for
84
the payment of dividends, cumulative
preferential cash dividends at the rate of 9.0% per annum of the $25.00
liquidation preference. Such dividends shall be cumulative from the date of the
original issue by the Operating Partnership of series A Preferred Units and
shall be payable quarterly in arrears on the 30th day of March, June, September,
and December of each year or, if not a business day: the next succeeding
business day (each, a "Dividend Payment Date"). The first dividend shall be paid
on September 30, 1998. Such first dividend and any dividend payable on the
Series A Preferred Units for any partial dividend period shall be computed on
the basis of a 360-day year consisting of twelve 30-day months. Dividends will
be payable 50 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 15th day of the calendar month in which the applicable Dividend Payment
Date falls or on such other date designated by the General Partner for the
payment of dividends that is not more than 30 nor less than 10 days prior to
such Dividend Payment Date (each, a "Dividend Record Date").
(b) No dividends on the Series A Preferred Units shall be
declared by the General Partner or paid or set apart for payment by the General
Partner at such time as the terms and provisions of any agreement of the
Operating Partnership, including any agreement relating to its indebtedness,
prohibits such declaration, payment or setting apart for payment or provides
that such declaration, payment or setting apart for payment would constitute a
breach there of or a default thereunder, or if such declaration or payment shall
be restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary,
dividends on the Series A Preferred Units shall accrue whether or not the
Operating Partnership has earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared. Accrued but unpaid dividends on the Series A Preferred Units shall
accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as set forth in the next sentence, no dividends
shall be declared or paid or set apart for payment on any of the Operating
Partnership's Common Units ("Common Units") or units of any other class or
series of units of the Operating Partnership ranking, as to dividends, on a
parity with or junior to the Series A Preferred Units letter than a dividend
paid in units of Common Units or in units of any other class or series of units
ranking junior to the Series A Preferred Units as to dividends and upon
liquidation) for any period unless full cumulative dividends for all past
dividend periods and the then current dividend period shall have been or
contemporaneously are (i) declared and paid in cash or (ii) declared and a sum
sufficient for the payment thereof in cash is set apart for such payment on the
Series A Preferred Units. When dividends are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series A
Preferred Units and the units of any other series of preferred units ranking on
a parity as to dividends with the Series A Preferred Units, all dividends
declared upon the Series A Preferred Units and any other series of preferred
units ranking on a parity as to dividends with the Series A Preferred Units
shall be declared pro rata so that the amount of dividends declared per unit of
Series A Preferred Units and such other series of preferred units shall in all
cases bear to each other the same ratio that accrued dividends per share on the
Series A Preferred Units and such other series of preferred units (which shall
not include any accrual in respect of unpaid dividends on such other series of
preferred units for prior dividend periods if such other series of preferred
units does not have a cumulative dividend) bear to each other. No interest, or
sum
85
of money in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Series A Preferred Units which may be in arrears.
(e) Except as provided in paragraph 2(d), unless full
cumulative dividends on the Series A Preferred Units shall have been or
contemporaneously are declared and paid in cash or declared and a sum sufficient
for the payment thereof in cash is set apart for payment for all past dividend
and the then current dividend period, no dividends (other than in Common Units
or other units ranking junior to the Series A Preferred Units as to dividends
and upon liquidation) shall be declared or paid or set aside for payment or
other dividend shall be declared or made upon the Common Units or any other
units of the Operating Partnership ranking junior to or on parity with the
Series A Preferred Units as to dividends or amounts upon liquidation nor shall
any units of Common Units, or any ether units of capital stock of the Operating
Partnership ranking junior to or on a parity with the Series A Preferred Units
as to dividends on upon liquidation, shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such units) by the Operating Partnership
except by conversion into or exchange for other units of the Operating
Partnership ranking junior to the Series A Preferred Units as to dividends and
upon liquidation). Nothing in the foregoing shall be deemed to preclude the
exercise of Rights (as defined in the Partnership Agreement) by any unit holder
in accordance with the Partnership Agreement.
(f) Holders of units of Series A Preferred Units shall not be
entitled to any dividend, whether payable in cash, Property or units, in excess
of full cumulative dividends on the Series A Preferred Units as provided above.
Any dividend payment made on the Series A Preferred Units shall first be
credited against the earliest accrued but unpaid dividends due with respect to
such units which remains payable.
3. Liquidation Rights.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Operating Partnership, the holders of units of
Series A Preferred Units shall be entitled to be paid out of the assets of the
Operating Partnership legally available for distribution to its Unit holders a
liquidation preference of $25.00 per unit, plus an amount equal to any accrued
and unpaid dividends to the date of payment (whether or not declared), before
any distribution or payment shall be made to holders of share of Common Units or
any other class or series of Units of the Operating Partnership ranking junior
to the Series A Preferred Units as to liquidation rights. 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 the amount
of the liquidating distributions on all outstanding units of Series A Preferred
Units and the corresponding amounts payable on all units of other classes or
series of units of the Operating Partnership ranking on a parity with the Series
A Preferred Units in the distribution of assets, then the holders of the Series
A Preferred Units and all other such classes or series of units shall share
ratably in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise he respectively entitled. Holders of
Series A Preferred Units shall be entitled to written notice of any such
liquidation. After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series A Preferred Units will have no
right or claim to any of the remaining assets of the Operating Partnership. The
86
consolidation or merger of the Operating Partnership with or into any
corporation, trust or entity or of any corporation, trust or other entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Operating Partnership shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Operating Partnership.
4. Redemption.
(a) Series A Preferred Units shall not be redeemable prior to
July 1, 2003. On or after July 1, 2003; the Operating Partnership, at its option
upon not less than 30 nor more than 60 days, written notice, may redeem the
Series A preferred Units, in whole or in part, at any time or from time to time,
for cash at a redemption price of $25.00 per unit, plus all accrued and unpaid
dividends thereon to the date fixed for redemption (except as provided below),
without interest. If fewer than all of the outstanding units of Series A
Preferred Units are to be redeemed, the units of Series A Preferred Units to be
redeemed shall be redeemed, pro rata (as nearly as may be practicable without
creating fractional units) or by a lot or by any other equitable method
determined by the Operating Partnership. Holders of Series A Preferred Units to
be redeemed shall surrender such Series A Preferred Units at the place
designated in such notice and shall be entitled to the redemption price and any
accrued and unpaid dividends payable upon such redemption following such
surrender. If notice of redemption of any Series A Preferred Units has been
given and if the funds necessary for such redemption have been set aside by the
Operating Partnership in trust for the benefit of the holders of any units of
Series A Preferred Units so called for redemption, then from and after the
redemption date dividends shall cease to accrue on such Series A Preferred
Units, such units of Series A Preferred Unites shall no longer be deemed
outstanding and all rights of the holders of such units will terminate, except
the right to receive the redemption price plus any accrued and unpaid dividends
payable upon such redemption.
(b) Unless full cumulative dividends on all Series A Preferred
Units 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, no
Series A Preferred Units shall be redeemed unless all outstanding units of
Series A Preferred Units are simultaneously redeemed and the Operating
Partnership shall not purchase or otherwise acquire directly or indirectly any
units of Series A Preferred Units (except by exchange for units of the Operating
Partnership ranking junior to the Series A Preferred Units as to dividends and
amounts upon liquidation.
(c) Notice of redemption shall be mailed by the Operating
Partnership, postage prepaid, not less than 30 nor more than 60 days prior to
the redemption date, addressed to the respective holders of record of the units
of Series A Preferred Units to be redeemed at their respective addresses as they
appear on the records of the Operating Partnership. No failure to give such
notice or any defect thereto or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series A Preferred Units except as
to a holder to whom notice was defective or not given. Each notice shall state
(i) the redemption date; (ii) the redemption price; (iii) the number of units of
Series A Preferred Units to be redeemed; (iv) the place or places where units of
Series A Preferred Units are to be surrendered for payment of the redemption
price; and (v) that dividends on the Series A Preferred Units to be redeemed
shall
87
cease to accrue on such redemption date. If fewer than all of the units of
Series A Preferred Units held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of units of Series A
Preferred Units held by such holder to be redeemed.
(d) Immediately prior to any redemption of Series A Preferred Units,
the Operating Partnership shall pay, in cash, any accumulated and unpaid
dividends through the redemption date, unless a redemption date falls after a
Dividend Record Date and prior to the corresponding Dividend Payment Date, in
which case each holder of Series A Preferred at the close of business on such
Dividend Record Date shall be entitled to the dividend payable on such units on
the corresponding Dividend Payment Date notwithstanding the redemption of such
units before such Dividend Payment Date. Except as provided above, the Operating
Partnership shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on Series A Preferred Units for which a notice of redemption has
been given.
(e) All units of the Series A Preferred Units redeemed pursuant to this
paragraph 4 shall be retired and shall be restored to the status of authorized
and unissued units of preferred units, without designation as to series and may
thereafter be reissued as units of any series of preferred units.
(f) The Series A Preferred Units shall have no stated maturity and
shall not be subject to any sinking fund or mandatory redemption.
5. Voting Rights.
(a) Holders of the Series A Preferred Units shall not have any
voting rights, except as set forth in the Partnership Agreement.
(b) So long as any units of Series A Preferred Units remain
outstanding, the Operating Partnership shall not, without the affirmative vote
or consent of the holders of two-thirds of the units of Series A Preferred Units
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) authorize or create, or
increase the authorized or issued amount of, any class or series of units
ranking prior to the Series A Preferred Units with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding-up of the Operating Partnership or reclassify any authorized units of
the Operating Partnership into such units, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such units; or (ii) amend, alter or repeal the provisions of the Partnership
Agreement or this Certificate of Designations, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series A Preferred Units or the
holders thereof; provided however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Series A Preferred Units remains
outstanding with the terms thereof materially unchanged, taking into account
that, upon the occurrence of an Event, the Operating Partnership may not be the
surviving entity, the occurrence of such Event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting power of
holders of Series A Preferred Units and provided further that (A) any increase
in amount of the authorized Preferred Units or the creation or issuance of any
other Series A
88
Preferred Units or (B) any increase in the number of authorized
units of Series A Preferred Units or any other series of Preferred Units in each
case ranking on a parity with or junior to the Series A Preferred Units of such
series with respect to the payment of dividends or the distribution of assets
upon liquidation, dissolution or winding up, shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting powers.
(c) 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 Series A
Preferred Units 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.
(d) In any matter in which the Series A Preferred Units may vote (as
expressly provided herein or as may be required by law), each share of Series A
Preferred Units shall be entitled to one vote, except that when any other series
of preferred units of the Operating Partnership shall have the right to vote
with the Series A Preferred Units as a single class on any matter, the Series A
Preferred Units and such other series shall have with respect to such matters
one vote per each $25.00 of stated liquidation preference.
6. Conversion.
The units of Series A Preferred Units shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding-up of the Operating
Partnership, rank (a) senior to the Common Units and to all units ranking junior
to such Series A Preferred Units; (b) on a parity with all units issued by the
Operating partnership the terms of which specifically provide that such units
rank on a parity with the Series A Preferred Units; and (c) junior to all units
issued by the Operating partnership (in accordance with this Certificate of
Designations) the terms of which specifically provide that such units rank
senior to the Series A Preferred Units. For purposes of this paragraph 7, the
term "units" does not include indebtedness convertible into units.
8. Exclusion of Other Rights.
The Series A Preferred Units shall not have any references or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than
expressly set forth in the Partnership Agreement and this Certificate of
Designations.
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 preferences or other rights, voting powers, restrictions,
limitations as to dividends
89
or other distributions, qualifications or terms or
conditions of redemption of the Series A Preferred Units set forth in the
Partnership Agreement and this Certificate of Designations is 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
Series A Preferred Units 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 preferences or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of the Series
A Preferred Units herein set forth shall be deemed dependent upon any other
provision thereof unless so expressed therein.
11. No Preemptive Rights.
No holder of Series A Preferred Units 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.
SIGNATURE APPEARS ON NEXT PAGE
90
IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of
Designation of Series A Cumulative Redeemable referred Units to be duly executed
by its Executive Vice President and Chief Financial Officer this 30th day of
June, 1998.
CBL Holdings I, Inc.
By: /s/ Xxxx X. Xxx
--------------------------------
Xxxx X. Xxx
Executive Vice President
And Chief Financial Officer
91
CERTIFICATE OF DESIGNATION
OF
8.75% SERIES B CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership
WHEREAS, CBL & Associates Properties, Inc. (the "Company") has
issued 2,000,000 shares (the "Offering") of 8.75%
Series B Cumulative Redeemable Preferred Stock (the "Preferred Stock");
WHEREAS, the Company and the Operating Partnership desire that the
Company contribute net proceeds of the Offering to CBL & Associates Limited
Partnership (the "Operating Partnership") in exchange for preferred units having
substantially the same economic rights and terms of the Preferred Stock;
WHEREAS, Article 4.4 of the Second Amended and Restated Partnership
Agreement of the Operating Partnership (the "Partnership Agreement") provides
for a Preferred Unit Designation, setting forth, in sufficient detail, the
economic rights and terms of the class or series of preferred units.
NOW, THEREFORE, CBL Holdings I, Inc., the general partner of the
Operating Partnership (the "General Partner") hereby designates a series of
preferred units and fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such preferred units, as follows:
1. Designation and Amount.
The units of such series shall be designated "8.75% Series B Cumulative
Redeemable Preferred Units" (the "Series B Preferred Units") and the number of
units constituting such series shall be 2,000,000. The designations, powers,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the Series B
Preferred Units shall be subject in all cases to the provisions of the
Partnership Agreement.
2. Dividends and Distribution Rights.
(a) Holders of Series B Preferred Units shall be entitled to receive,
when, as and if
92
declared by the General Partner, out of assets of the Operating
Partnership legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 8.75% per annum of the $50.00
liquidation preference. Such dividends shall be cumulative from the date of the
original issue by the Operating Partnership of Series B Preferred Units and
shall be payable quarterly in arrears on the 30th day of March, June, September,
and December of each year or, if not a business day, the next succeeding
business day (each, a "Dividend Payment Date"). The first dividend shall be paid
on June 30, 2002. Such first dividend and any dividend payable on the Series B
Preferred Units for any partial dividend period shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. Dividends 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 15th
day of the calendar month in which the applicable Dividend Payment Date falls or
on such other date designated by the General Partner for the payment of
dividends that is not more than 30 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(b) No dividends on the Series B Preferred Units shall be declared by
the General Partner or paid or set apart for payment by the General Partner at
such time as the terms and provisions of any agreement of the Operating
Partnership, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary,
dividends on the Series B Preferred Units shall accrue whether or not the
Operating Partnership has earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared. Accrued but unpaid dividends on the Series B Preferred Units shall
accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as set forth in the next sentence, no dividends shall be
declared or paid or set apart for payment on any of the Operating Partnership's
Common Units ("Common Units"), or units of any other class or series of units of
the Operating Partnership ranking, as to dividends, on a parity with or junior
to the Series B Preferred Units (other than a dividend paid in units of Common
Units or in units of any other class or series of units ranking junior to the
Series B Preferred Units as to dividends and upon liquidation) for any period
unless full cumulative dividends on the Series B Preferred Units for all past
dividend periods and the then current dividend period shall have been or
contemporaneously are (i) declared and paid in cash or (ii) declared and a sum
sufficient for the payment thereof in cash is set apart for such payment. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon the Series B Preferred Units and the units of any other
series of preferred units ranking on a parity as to dividends with the Series B
Preferred Units, all dividends declared upon the Series B Preferred Units and
any other series of preferred units ranking on a parity as to dividends with the
Series B Preferred Units shall be declared pro rata so that the amount of
dividends declared per unit of Series B Preferred Units and such other series of
preferred units shall in all cases bear to each other the same ratio that
accrued dividends per share on the Series B Preferred Units and such other
series of preferred units (which shall not include any accrual in respect of
unpaid dividends on such other series of preferred units for prior dividend
periods if such other series of
93
preferred units does not have a cumulative
dividend) bear to each other. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series B
Preferred Units which may be in arrears.
(e) Except as provided in paragraph 2(d), unless full cumulative
dividends on Series B Preferred Units shall have been or contemporaneously are
declared and paid in cash declared and a sum sufficient for the payment thereof
in cash is set apart for payment for all past dividend periods and the then
current dividend period, no dividends (other than in Common Units or other units
ranking junior to the Series B Preferred Units as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
dividend shall be declared or made upon the Common Units or any other units of
the Operating Partnership ranking junior to or on parity with the Series B
Preferred Units as to dividends or amounts upon liquidation nor shall any units
of Common Units, or any other units of capital stock of the Operating
Partnership ranking junior to or on a parity with the Series B Preferred Units
as to dividends or upon liquidation, shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such units) by the Operating Partnership
(except by conversion into or exchange for other units of the Operating
Partnership ranking junior to the Series B Preferred Units as to dividends and
upon liquidation). Nothing in the foregoing shall be deemed to preclude the
exercise of Rights (as defined in the Partnership Agreement) by any unit holder
in accordance with the Partnership Agreement.
(f) Holders of units of Series B Preferred Units shall not be entitled
to any dividend, whether payable in cash, property or units, in excess of full
cumulative dividends on the Series B Preferred Units as provided above. Any
dividend payment made on the Series B Preferred Units shall first be credited
against the earliest accrued but unpaid dividends due with respect to such units
which remains payable.
3. Liquidation Rights.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Operating Partnership, the holders of units of
Series B Preferred Units shall be entitled to be paid out of the assets of the
Operating Partnership legally available for distribution to its Unit holders a
liquidation preference of $50.00 per unit, plus an amount equal to any accrued
and unpaid dividends to the date of payment (whether or not declared), before
any distribution or payment shall be made to holders of shares of Common Units
or any other class or series of Units of the Operating Partnership ranking
junior to the Series B Preferred Units as to liquidation rights. 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 the
amount of the liquidating distributions on all outstanding units of Series B
Preferred Units and the corresponding amounts payable on all units of other
classes or series of units of the Operating Partnership ranking on a parity with
the Series B Preferred Units in the distribution of assets, then the holders of
the Series B Preferred Units and all other such classes or series of units shall
share ratably in any such distribution of assets in proportion to the full
liquidating distributions to which they would otherwise be respectively
entitled. Holders of Series B Preferred Units shall be entitled to written
notice of any such liquidation. After payment of the full amount of the
liquidating distributions to which they are entitled, the holders of Series B
Preferred Units will
94
have no right or claim to any of the remaining assets of
the Operating Partnership. The consolidation or merger of the Operating
Partnership with or into any corporation, trust or entity or of any corporation,
trust or other entity, or the sale, lease or conveyance of all or substantially
all of the property or business of the Operating Partnership shall not be deemed
to constitute a liquidation, dissolution or winding-up of the Operating
Partnership.
4. Redemption.
(a) Series B Preferred Units shall not be redeemable prior to June 14,
2007. On or after June 14, 2007; the Operating Partnership, at its option upon
not less than 30 nor more than 60 days' written notice, may redeem the Series B
preferred Units, in whole or in part, at any time or from time to time, for cash
at a redemption price of $50.00 per unit, plus any accrued and unpaid dividends
thereon to the date fixed for redemption (except as provided below), without
interest. If fewer than all of the outstanding units of Series B Preferred Units
are to be redeemed, the units of Series B Preferred Units to be redeemed shall
be redeemed, pro rata (as nearly as may be practicable without creating
fractional units) or by a lot or by any other equitable method determined by the
Operating Partnership. Holders of Series B Preferred Units to be redeemed shall
surrender such Series B Preferred Units at the place designated in such notice
and shall be entitled to the redemption price and any accrued and unpaid
dividends payable upon such redemption following such surrender. If notice of
redemption of any Series B Preferred Units has been given and if the funds
necessary for such redemption have been set aside by the Operating Partnership
in trust for the benefit of the holders of any units of Series B Preferred Units
so called for redemption, then from and after the redemption date dividends
shall cease to accrue on such Series B Preferred Units, such units of Series B
Preferred Units shall no longer be deemed outstanding and all rights of the
holders of such units will terminate, except the right to receive the redemption
price plus any accrued and unpaid dividends payable upon such redemption.
Nothing herein shall prevent or restrict the Operating Partnership's right or
ability to purchase, from time to time either at a public or a private sale, of
the whole, or any part of the Series B Preferred Stock at such price or prices
as the Operating Partnership may determine, subject to the provisions of
applicable law.
(b) Unless full cumulative dividends on all Series B Preferred
Units 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, no
Series B Preferred Units shall be redeemed unless all outstanding units of
Series B Preferred Units are simultaneously redeemed and the Operating
Partnership shall not purchase or otherwise acquire directly or indirectly any
units of Series B Preferred Units (except by exchange for units of the Operating
Partnership ranking junior to the Series B Preferred Units as to dividends and
amounts upon liquidation).
(c) Notice of redemption shall be mailed by the Operating
Partnership, postage prepaid, not less than 30 nor more than 60 days prior to
the redemption date, addressed to the respective holders of record of the units
of Series B Preferred Units to be redeemed at their respective addresses as they
appear on the records of the Operating Partnership. No failure to give such
notice or any defect thereto or in the mailing thereof shall affect the validity
of the proceedings for the redemption of any Series B Preferred Units except as
to a holder to whom
95
notice was defective or not given. Each notice shall state
(i) the redemption date; (ii) the redemption price; (iii) the number of units of
Series B Preferred Units to be redeemed; (iv) the place or places where units of
Series B Preferred Units are to be surrendered for payment of the redemption
price; and (v) that dividends on the Series B Preferred Units to be redeemed
shall cease to accrue on such redemption date. If fewer than all of the units of
Series B Preferred Units held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of units of Series B
Preferred Units held by such holder to be redeemed.
(d) Immediately prior to any redemption of Series B Preferred Units,
the Operating Partnership shall pay, in cash, any accumulated and unpaid
dividends through the redemption date, unless a redemption date falls after a
Dividend Record Date and prior to the corresponding Dividend Payment Date, in
which case each holder of Series B Preferred at the close of business on such
Dividend Record Date shall be entitled to the dividend payable on such units on
the corresponding Dividend Payment Date notwithstanding the redemption of such
units before such Dividend Payment Date. Except as provided above, the Operating
Partnership shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on Series B Preferred Units for which a notice of redemption has
been given.
(e) All units of the Series B Preferred Units redeemed pursuant to this
paragraph 4 shall be retired and shall be restored to the status of authorized
and unissued units of preferred units, without designation as to Series B and
may thereafter be reissued as units of any series of preferred units.
(f) The Series B Preferred Units shall have no stated maturity and
shall not be subject to any sinking fund or mandatory redemption.
5. Voting Rights.
(a) Holders of the Series B Preferred Units shall not have any
voting rights, except as set forth in the Partnership Agreement.
(b) So long as any units of Series B Preferred Units remain
outstanding, the Operating Partnership shall not, without the affirmative vote
or consent of the holders of two-thirds of the units of Series B Preferred Units
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) authorize or create, or
increase the authorized or issued amount of, any class or series of units
ranking prior to the Series B Preferred Units with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding-up of the Operating Partnership or reclassify any authorized units of
the Operating Partnership into such units, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such units; or (ii) amend, alter or repeal the provisions of the Partnership
Agreement or this Certificate of Designations, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series B Preferred Units or the
holders thereof; provided however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Series B Preferred Units remains
outstanding with the terms thereof materially unchanged, taking into account
that, upon the occurrence of an
96
Event, the Operating Partnership may not be the
surviving entity, the occurrence of such Event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting power of
holders of Series B Preferred Units and provided further that (A) any increase
in amount of the authorized Preferred Units or the creation or issuance of any
other Series B Preferred Units or (B) any increase in the number of authorized
units of Series B Preferred Units or any other series of Preferred Units, in
each case ranking on a parity with or junior to the Series B Preferred Units of
such series with respect to the payment of dividends or the distribution of
assets upon liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers.
(c) 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 Series B
Preferred Units 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.
(d) In any matter in which the Series B Preferred Units may vote (as
expressly provided herein or as may be required by law), each share of Series B
Preferred Units shall be entitled to one vote, except that when any other series
of preferred units of the Operating Partnership shall have the right to vote
with the Series B Preferred Units as a single class on any matter, the Series B
Preferred Units and such other series shall have with respect to such matters
one vote per each $50.00 of stated liquidation preference.
6. Conversion.
The units of Series B Preferred Units shall not be convertible into or
exchangeable for any other property or units of the Operating partnership.
7. Ranking.
The Series B Preferred Units shall, with respect to dividend rights and
rights upon liquidation, dissolution or winding-up of the Operating Partnership,
rank (a) senior to the Common Units and to all units ranking junior to such
Series B Preferred Units; (b) on a parity with all units issued by the Operating
partnership the terms of which specifically provide that such units rank on a
parity with the Series B Preferred Units; and (c) junior to all units issued by
the Operating partnership (in accordance with this Certificate of Designations)
the terms of which specifically provide that such units rank senior to the
Series B Preferred Units. For purposes of this paragraph 7, the term "units"
does not include indebtedness convertible into units.
8. Exclusion of Other Rights.
The Series B Preferred Units shall not have any references or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than
expressly set forth in the Partnership Agreement and this
97
Certificate of Designations.
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 preferences or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Series B Preferred Units set forth in the
Partnership Agreement and this Certificate of Designations is invalid, unlawful
or incapable of being enforced by reason of any rule of law 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 Series B
Preferred Units 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 preferences or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of the Series
B Preferred Units herein set forth shall be deemed dependent upon any other
provision thereof unless so expressed therein.
11. No Preemptive Rights.
No holder of Series B Preferred Units 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.
SIGNATURE APPEARS ON NEXT PAGE
98
IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of
Designation of Series C Cumulative Redeemable Preferred Units to be duly
executed by its Vice Chairman of the Board and Chief Financial Officer this 11th
day of June, 2002.
CBL Holdings I, Inc.
By:/s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice Chairman of the Board
And Chief Financial Officer
99
7.75% SERIES C CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASOCIATES LIMITED PARTNERSHIP
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership
WHEREAS, CBL & Associates Properties, Inc. (the "Company") has filed a
registration statement for the offering of up to an aggregate of 4,830,000
depositary shares, each representing 1/10th of a share (the "Offering") of 7.75%
Series C Cumulative Redeemable Preferred Stock (the "Preferred Stock');
WHEREAS, the Company and the Operating Partnership desire that the
Company contribute net proceeds of the Offering to CBL & Associates Limited
Partnership (the "Operating Partnership") in exchange for preferred units having
substantially the same economic rights and terms of the Preferred Stock;
WHEREAS, Article 4.4 of the Second Amended and Restated Partnership
Agreement of the Operating Partnership (the "Partnership Agreement") provides
for a Preferred Unit Designation, setting forth, in sufficient detail, the
economic rights and terms of the class or series of preferred units.
NOW, THEREFORE, CBL Holdings I, Inc., the general partner of the
Operating Partnership (the "General Partner") hereby designates a series of
preferred units and fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such preferred units, as follows:
1. Designation and Amount.
The units of such series shall be designated "7.75% Series C Cumulative
Redeemable Preferred Units" (the "Series C Preferred Units") and the number of
units constituting such series shall be 483,000. The designations, powers,
preferences and relative, participating, optional or other special rights, and
the qualifications, limitations or restrictions thereof, of the Series C
Preferred Units shall be subject in all cases to the provisions of the
Partnership Agreement.
2. Dividends and Distribution Rights.
(a) Holders of Series C Preferred Units shall be entitled to receive,
when, as and if declared by the General Partner, out of assets of the Operating
Partnership legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 7.75% per annum of the $250.00
liquidation preference. Such dividends shall be cumulative from the date of the
original issue by the Operating Partnership of Series B Preferred Units and
shall be payable
100
quarterly in arrears on the 30th day of March, June, September,
and December of each year or, if not a business day, the next succeeding
business day (each, a "Dividend Payment Date"). The first dividend shall be paid
on June 30, 2002. Such first dividend and any divided payable on the Series C
Preferred Units for any partial dividend period shall be computed on the basis
of a 360-day year consisting of twelve 30-day months. Dividends 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 15th
day of the calendar month in which the applicable Dividend Payment Date falls or
on such other date designated by the General Partner for the payment of
dividends that is not more than 30 nor less than 10 days prior to such Dividend
Payment Date (each, a "Dividend Record Date").
(b) No dividends on the Series C Preferred Units shall be declared by
the General Partner or paid or set apart for payment by the General Partner at
such time as the terms and provisions of any agreement of the Operating
Partnership, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary,
dividends on the Series B Preferred Units shall accrue whether or not the
Operating Partnership has earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared. Accrued but unpaid dividends on the Series B Preferred Units shall
accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as set forth in the next sentence, no dividends shall be
declared or paid or set apart for payment on any of the Operating Partnership's
Common Units ("Common Units"), or units of any other class or series of units of
the Operating Partnership ranking, as to dividends, on a parity with or junior
to the Series C Preferred Units (other than a dividend paid in units of Common
Units or in units of any other class or series of units ranking junior to the
Series C Preferred Units as to dividends and upon liquidation) for any period
unless full cumulative dividends on the Series C Preferred Units for all past
dividend periods and the then current dividend period shall have been or
contemporaneously are (i) declared and paid in cash or (ii) declared and a sum
sufficient for the payment thereof in cash is set apart for such payment. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon the Series C Preferred Units and the units of any other
series of preferred units ranking on a parity as to dividends with the Series C
Preferred Units, all dividends declared upon the Series C Preferred Units and
any other series of preferred units ranking no a parity as to dividends with the
Series C Preferred Units shall be declared pro rata so that the amount of
dividends declared per unit of Series C Preferred Units and such other series of
preferred units shall in all cases bear to each other the same ratio that
accrued dividends per share on the Series C Preferred Units and such other
series of preferred units (which shall not include any accrual in respect of
unpaid dividends on such other series of preferred units for prior dividend
periods if such other series of preferred units does not have a cumulative
dividend) bear to each other. No interest, or sum of money in lieu of interest,
shall be payable in respect of any dividend payment or payments on the Series C
Preferred Units which may be in arrears.
101
(e) Except as provided in paragraph 2(d), unless full cumulative
dividends on Series C Preferred Units shall have been or contemporaneously are
declared and paid in cash declared and a sum sufficient for the payment thereof
in cash is set apart for payment for all past dividend periods and the then
current dividend period, no dividends (other than in Common Units or other units
ranking junior to the Series C Preferred Units as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
dividend shall be declared or made upon the Common Units or any other units of
the Operating Partnership ranking junior to or on parity with the Series C
Preferred Units as to dividends or amounts upon liquidation nor shall any units
of Common Units, or any other units of capital stock of the Operating
Partnership ranking junior to or on a parity with the Series C Preferred Units
as to dividends or upon liquidation, shall be redeemed, purchased or otherwise
acquired for any consideration (or any moneys be paid to or made available for a
sinking fund for the redemption of any such units) by the Operating Partnership
(except by conversion into or exchange for other units of the Operating
Partnership ranking junior to the Series C Preferred Units as to dividends and
upon liquidation). Nothing in the foregoing shall be deemed to preclude the
exercise of Rights (as defined in the Partnership Agreement) by any unit holder
in accordance with the Partnership Agreement.
(f) Holders of units of Series C Preferred Units shall not be entitled
to any dividend, whether payable in cash, property or units, in excess of full
cumulative dividends on the Series C Preferred Units as provided above. Any
dividend payment made on the Series C Preferred Units shall first be credited
against the earliest accrued but unpaid dividends due with respect to such units
which remains payable.
3. Liquidation Rights.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Operating Partnership, the holders of units of
Series C Preferred Units shall be entitled to be paid out of the assets of the
Operating Partnership legally available for distribution to its Unit holders a
liquidation preference of $250.00 per unit, plus an amount equal to any accrued
and unpaid dividends to the date of payment (whether or not declared), before
any distribution or payment shall be made to holders of shares of Common Units
or any other class or series of Units of the Operating Partnership ranking
junior to the Series C Preferred Units as to liquidation rights. In the event
that, upon such voluntary or involuntary liquidation, dissolution or winding-up,
the available assets of the Operating Partnership legally available for
distribution to its Unit holders a liquidation preference of $250.00 per unit,
plus an amount equal to any distribution or payment shall be made to holders of
shares of Common Units or any other class or series of Units of the Operating
Partnership ranking junior to the Series C Preferred Units as to liquidation
rights. 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 the amount of the liquidating distributions on all
outstanding units of Series C Preferred Units and the corresponding amounts
payable on all units of other classes or series of units of the Operating
Partnership ranking on a parity with the Series C Preferred Units in the
distribution of assets, then the holders of the Series C Preferred Units and all
other such classes or series of units shall share ratable in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled. Holders of Series C
Preferred Units shall be entitled to written notice of any such liquidation.
After payment of the full amount of the
102
liquidating distributions to which they
are entitled, the holders of Series C Preferred Units will have no right or
claim to any of the remaining assets of the Operating Partnership. The
consolidation or merger of the Operating Partnership with or into any
corporation, trust or entity or of any corporation, trust or other entity, or
the sale, lease or conveyance of all or substantially all of the property or
business of the Operating Partnership shall not be deemed to constitute a
liquidation, dissolution or winding-up of the Operating Partnership.
4. Redemption.
(a) Series C Preferred Units shall not be redeemable prior to August
22, 2008. On or after August 22, 2008; the Operating Partnership, at its option
upon not less than 30 nor more than 60 days' written notice, may redeem the
Series C preferred Units, in whole or in part, at any time or from time to time,
for cash at a redemption price of $250.00 per unit, plus any accrued and unpaid
dividends thereon to the date fixed for redemption (except as provided below),
without interest. If fewer than all of the outstanding units of Series C
Preferred Units are to be redeemed, the units of Series C Preferred Units to be
redeemed shall be redeemed, pro rata (as nearly as may be practicable without
creating fractional units) or by a lot or by any other equitable method
determined by the Operating Partnership. Holders of Series A Preferred Units to
be redeemed shall surrender such Series C Preferred Units at the place
designated in such notice and shall be entitled to the redemption price and any
accrued and unpaid dividends payable upon such redemption following such
surrender. If notice of redemption of any Series C Preferred Units has been
given and if the funds necessary for such redemption have been set aside by the
Operating Partnership in trust for the benefit of the holders of any units of
Series C Preferred Units so called for redemption, then from and after the
redemption date dividends shall cease to accrue on such Series C Preferred
Units, such units of Series C Preferred Unites shall no longer be deemed
outstanding and all rights of the holders of such units will terminate, except
the right to receive the redemption price plus any accrued and unpaid dividends
payable upon such redemption. Nothing herein shall prevent or restrict the
Operating Partnership's right or ability to purchase, from time to time either
at a public or a private sale, of the whole, or any part of the Series C
Preferred Stock at such price or prices as the Operating Partnership may
determine, subject to the provisions of applicable law.
(b) Unless full cumulative dividends on all Series C Preferred
Units 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, no
Series C Preferred Units shall be redeemed unless all outstanding units of
Series C Preferred Units are simultaneously redeemed and the Operating
Partnership shall not purchase or otherwise acquire directly or indirectly any
units of Series C Preferred -Units (except by exchange for units of the
Operating Partnership ranking junior to the Series C Preferred Units as to
dividends and amounts upon liquidation).
(c) Notice of redemption shall be mailed by the Operating
Partnership, postage prepaid, not less than 30 nor more than 60 days prior to
the redemption date, addressed to the respective holders of record of the units
of Series C Preferred Units to be redeemed at their respective addresses as they
appear on the records of the Operating Partnership. No failure to give such
notice or any defect thereto or in the mailing thereof shall affect the validity
of the
103
proceedings for the redemption of any Series C Preferred Units except as
to a holder to whom notice was defective or not given. Each notice shall state
(i) the redemption date; (ii) the redemption price; (iii) the number of units of
Series C Preferred Units to be redeemed; (iv) the place or places where units of
Series C Preferred Units are to be surrendered for payment of the redemption
price; and (v) that dividends on the Series C Preferred Units to be redeemed
shall cease to accrue on such redemption date. If fewer than all of the units of
Series C Preferred Units held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of units of Series C
Preferred Units held by such holder to be redeemed.
(d) Immediately prior to any redemption of Series C Preferred Units,
the Operating Partnership shall pay, in cash, any accumulated and unpaid
dividends through the redemption date, unless a redemption date falls after a
Dividend Record Date and prior to the corresponding Dividend Payment Date, in
which case each holder of Series C Preferred at the close of business on such
Dividend Record Date shall be entitled to the dividend payable on such units on
the corresponding Dividend Payment Date notwithstanding the redemption of such
units before such Dividend Payment Date. Except as provided above, the Operating
Partnership shall make no payment or allowance for unpaid dividends, whether or
not in arrears, on Series C Preferred Units for which a notice of redemption has
been given.
(e) All units of the Series C Preferred Units redeemed pursuant to this
paragraph 4 shall be retired and shall be restored to the status of authorized
and unissued units of preferred units, without designation as to Series C and
may thereafter be reissued as units of any series of preferred units.
(f) The Series C Preferred Units shall have no stated maturity and
shall not be subject to any sinking fund or mandatory redemption.
5. Voting Rights.
(a) Holders of the Series C Preferred Units shall not have any
voting rights, except as set forth in the Partnership Agreement.
(b) So long as any units of Series C Preferred Units remain
outstanding, the Operating Partnership shall not, without the affirmative vote
or consent of the holders of two-thirds of the units of Series C Preferred Units
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) authorize or create, or
increase the authorized or issued amount of, any class or series of units
ranking prior to the Series C Preferred Units with respect to payment of
dividends or the distribution of assets upon liquidation, dissolution or
winding-up of the Operating Partnership or reclassify any authorized units of
the Operating Partnership into such units, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such units; or (ii) amend, alter or repeal the provisions of the Partnership
Agreement or this Certificate of Designations, whether by merger, consolidation
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series C Preferred Units or the
holders thereof; provided however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Series C Preferred Units remains
outstanding with
104
the terms thereof materially unchanged, taking into account
that, upon the occurrence of an Event, the Operating Partnership may not be the
surviving entity, the occurrence of such Event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting power of
holders of Series C Preferred Units and provided further that (A) any increase
in amount of the authorized Preferred Units or the creation or issuance of any
other Series C Preferred Units or (B) any increase in the number of authorized
units of Series C Preferred Units or (C) the creation or issuance of any other
series of Preferred Units, in each case referred to in clauses (A), (B) or (C)
above, ranking on a parity with or junior to the Series C Preferred Units with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up.
(c) 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 Series C
Preferred Units 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.
(d) In any matter in which the Series C Preferred Units may vote (as
expressly provided herein or as may be required by law), each share of Series C
Preferred Units shall be entitled to one vote per each $25.00 in stated
liquidation preference.
6. Conversion.
The units of Series C Preferred Units shall not be convertible into or
exchangeable for any other property or units of the Operating partnership.
7. Ranking.
The Series C Preferred Units shall, with respect to dividend rights and
rights upon liquidation, dissolution or winding-up of the Operating Partnership,
rank (a) senior to the Common Units and to all units ranking junior to such
Series C Preferred Units; (b) on a parity with all units issued by the Operating
partnership the terms of which specifically provide that such units rank on a
parity with the Series C Preferred Units; and (c) junior to all units issued by
the Operating partnership (in accordance with this Certificate of Designations)
the terms of which specifically provide that such units rank senior to the
Series C Preferred Units. For purposes of this paragraph 7, the term "units"
does not include indebtedness convertible into units.
8. Exclusion of Other Rights.
The Series C Preferred Units shall not have any references or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than
expressly set forth in the Partnership Agreement and this Certificate of
Designations.
105
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 preferences or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications or terms or
conditions of redemption of the Series C Preferred Units set forth in the
Partnership Agreement and this Certificate of Designations is invalid, unlawful
or incapable of being enforced by reason of any rule of law 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 Series C
Preferred Units 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 preferences or other
rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption of the Series
C Preferred Units herein set forth shall be deemed dependent upon any other
provision thereof unless so expressed therein.
11. No Preemptive Rights.
No holder of Series C Preferred Units 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.
SIGNATURE APPEARS ON NEXT PAGE
106
IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of
Designation of Series C Cumulative Redeemable Preferred Units to be duly
executed by its Vice Chairman of the Board and Chief Financial officer this 21st
day of August, 2003.
CBL Holdings I, Inc.
By: /s/ Xxxx X. Xxx
Xxxx Xxx
Vice Chairman of the Board
And Chief Financial Officer
107
CERTIFICATE OF DESIGNATION
OF
7.375% SERIES D CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
Pursuant to Article 4.4 of the
Second Amended and Restated Partnership Agreement of
CBL & Associates Limited Partnership
WHEREAS, CBL & Associates Properties, Inc. (the "Company")
has issued 805,000 shares (the "Offering") of 7.375% Series D Cumulative
Redeemable Preferred Stock (the "Preferred Stock");
WHEREAS, the Company and CBL & Associates Limited Partnership
(the "Operating Partnership") desire that the Company contribute net proceeds of
the Offering to the Operating Partnership in exchange for preferred units having
substantially the same economic rights and terms as the Preferred Stock;
WHEREAS, Article 4.4 of the Second Amended and Restated
Partnership Agreement of the Operating Partnership (the "Partnership Agreement")
provides for a Preferred Unit Designation, setting forth, in sufficient detail,
the economic rights and terms of the class or series of preferred units.
NOW THEREFORE, CBL Holdings I, Inc., the general partner of
the Operating Partnership (the "General Partner") hereby designates a series of
preferred units and fixes the designations, powers, preferences and relative,
participating, optional or other special rights, and the qualifications,
limitations or restrictions thereof, of such preferred units, as follows:
1. Designation and Amount.
The units of such series shall be designated "7.375% Series D
Cumulative Redeemable Preferred Units" (the "Series D Preferred Units") and the
number of units constituting such series shall be 805,000. The designations,
powers, preferences and relative, participating, optional or other special
rights, and the qualifications, limitations or restrictions thereof, of the
Series D Preferred Units shall be subject in all cases to the provisions of the
Partnership Agreement.
2. Dividends and Distribution Rights.
(a) Holders of Series D Preferred Units shall be entitled to receive,
when, as and if declared by the General Partner, out of assets of the Operating
Partnership legally available for the payment of dividends, cumulative
preferential cash dividends at the rate of 7.375% per annum of the $250.00
liquidation preference. Such dividends shall be cumulative from and
108
including
the date of the original issue by the Operating Partnership of the Series D
Preferred Units and shall be payable quarterly in arrears on the 30th day of
March, June, September, and December of each year or, if not a business day, the
next succeeding business day (each, a "Dividend Payment Date"). The first
dividend shall be paid on March 30, 2005. Such first dividend and any dividend
payable on the Series D Preferred Units for any other partial dividend period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months. Dividends 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 15th day of the calendar month in which the
applicable Dividend Payment Date falls or on such other date designated by the
General Partner for the payment of dividends that is not more than 30 nor less
than 10 days prior to such Dividend Payment Date (each, a "Dividend Record
Date").
(b) No dividends on the Series D Preferred Units shall be declared by
the General Partner or paid or set apart for payment by the General Partner at
such time as the terms and provisions of any agreement of the Operating
Partnership, including any agreement relating to its indebtedness, prohibits
such declaration, payment or setting apart for payment or provides that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or payment shall be
restricted or prohibited by law.
(c) Notwithstanding anything contained herein to the contrary,
dividends on the Series D Preferred Units shall accrue whether or not the
Operating Partnership has earnings, whether or not there are funds legally
available for the payment of such dividends, and whether or not such dividends
are declared. Accrued but unpaid dividends on the Series D Preferred Units shall
accumulate as of the Dividend Payment Date on which they first become payable.
(d) Except as set forth in the next sentence, no dividends shall be
declared or paid or set apart for payment on any of the Operating Partnership's
Common Units ("Common Units"), or units of any other class or series of units of
the Operating Partnership ranking, as to dividends, on a parity with or junior
to the Series D Preferred Units (other than a dividend paid in units of Common
Units or in units of any other class or series of units ranking junior to the
Series D Preferred Units as to dividends and upon liquidation) for any period
unless full cumulative dividends on the Series D Preferred Units for all past
dividend periods and the then current dividend period shall have been or
contemporaneously are (i) declared and paid in cash or (ii) declared and a sum
sufficient for the payment thereof in cash is set apart for such payment. When
dividends are not paid in full (or a sum sufficient for such full payment is not
so set apart) upon the Series D Preferred Units and the units of any other
series of preferred units ranking on a parity as to dividends with the Series D
Preferred Units, all dividends declared upon the Series D Preferred Units and
any other series of preferred units ranking on a parity as to dividends with the
Series D Preferred Units shall be declared pro rata so that the amount of
dividends declared per unit of Series D Preferred Units and such other series of
preferred units shall in all cases bear to each other the same ratio that
accrued dividends per unit on the Series D Preferred Units and such other series
of preferred units (which shall not include any accrual in respect of unpaid
dividends on such other series of preferred units for prior dividend periods if
such other series of preferred units does not have a cumulative dividend) bear
to each other. No interest, or sum of money in lieu of interest, shall be
payable in respect of any dividend payment or payments on the Series D Preferred
Units which may be in arrears.
109
(e) Except as provided in paragraph 2(d), unless full cumulative
dividends on the Series D Preferred Units shall have been or contemporaneously
are declared and paid in cash or declared and a sum sufficient for the payment
thereof in cash is set apart for payment for all past dividend periods and the
then current dividend period, no dividends (other than in Common Units or other
units ranking junior to the Series D Preferred Units as to dividends and upon
liquidation) shall be declared or paid or set aside for payment or other
dividend shall be declared or made upon the Common Units or any other units of
the Operating Partnership ranking junior to or on parity with the Series D
Preferred Units as to dividends or amounts upon liquidation nor shall any units
of Common Units, or any units of any other class or series of units of the
Operating Partnership ranking junior to or on a parity with the Series D
Preferred Units as to dividends or upon liquidation, be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such units) by the
Operating Partnership (except by conversion into or exchange for other units of
the Operating Partnership ranking junior to the Series D Preferred Units as to
dividends and upon liquidation). Nothing in the foregoing shall be deemed to
preclude the exercise of Rights (as defined in the Partnership Agreement) by any
unit holder in accordance with the Partnership Agreement.
(f) Holders of Series D Preferred Units shall not be entitled to any
dividend, whether payable in cash, property or units, in excess of full
cumulative dividends on the Series D Preferred Units as provided above. Any
dividend payment made on the Series D Preferred Units shall first be credited
against the earliest accrued but unpaid dividends due with respect to such units
which remains payable.
3. Liquidation Rights.
Upon any voluntary or involuntary liquidation, dissolution or
winding-up of the affairs of the Operating Partnership, the holders of units of
Series D Preferred Units shall be entitled to be paid out of the assets of the
Operating Partnership legally available for distribution to its Unit holders a
liquidation preference of $250.00 per unit, plus an amount equal to any accrued
and unpaid dividends to the date of payment (whether or not declared), before
any distribution or payment shall be made to holders of units of Common Units or
any other class or series of units of the Operating Partnership ranking junior
to the Series D Preferred Units as to liquidation rights. 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 the amount
of the liquidating distributions on all outstanding units of Series D Preferred
Units and the corresponding amounts payable on all units of other classes or
series of units of the Operating Partnership ranking on a parity with the Series
D Preferred Units in the distribution of assets, then the holders of the Series
D Preferred Units and all other such classes or series of units shall share
ratably in any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled. Holders of
Series D Preferred Units shall be entitled to written notice of any such
liquidation. After payment of the full amount of the liquidating distributions
to which they are entitled, the holders of Series D Preferred Units will have no
right or claim to any of the remaining assets of the Operating Partnership. The
consolidation or merger of the Operating Partnership with or into any
corporation, trust or entity, or of any corporation, trust or other entity with
or into the Operating Partnership, or the sale,
110
lease or conveyance of all or
substantially all of the property or business of the Operating Partnership shall
not be deemed to constitute a liquidation, dissolution or winding-up of the
Operating Partnership.
4. Redemption.
(a) Series D Preferred Units shall not be redeemable prior to December
13, 2009. On or after December 13, 2009, the Operating Partnership, at its
option upon not less than 30 nor more than 60 days' written notice, may redeem
the Series D Preferred Units, in whole or in part, at any time or from time to
time, for cash at a redemption price of $250.00 per unit, plus any accrued and
unpaid dividends thereon up to and including the date fixed for redemption
(except as provided below), without interest. If fewer than all of the
outstanding units of Series D Preferred Units are to be redeemed, the units of
Series D Preferred Units 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 Series D
Preferred Units to be redeemed shall surrender such Series D Preferred Units at
the place designated in such notice and shall be entitled to the redemption
price and any accrued and unpaid dividends payable upon such redemption
following such surrender. If notice of redemption of any Series D Preferred
Units has been given and if the funds necessary for such redemption have been
set aside by the Operating Partnership in trust for the benefit of the holders
of any units of Series D Preferred Units so called for redemption, then from and
after the redemption date dividends shall cease to accrue on such Series D
Preferred Units, such units of Series D Preferred Units shall no longer be
deemed outstanding and all rights of the holders of such units will terminate,
except the right to receive the redemption price plus any accrued and unpaid
dividends payable upon such redemption. Nothing herein shall prevent or restrict
the Operating Partnership's right or ability to purchase, from time to time
either at a public or a private sale, all, or any portion, of the outstanding
Series D Preferred Units at such price or prices as the Operating Partnership
may determine, subject to the provisions of applicable law.
(b) Unless full cumulative dividends on all Series D Preferred Units
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, no Series D
Preferred Units shall be redeemed unless all outstanding units of Series D
Preferred Units are simultaneously redeemed and the Operating Partnership shall
not purchase or otherwise acquire directly or indirectly any units of Series D
Preferred Units (except by exchange for units of the Operating Partnership
ranking junior to the Series D Preferred Units as to dividends and amounts upon
liquidation).
(c) Notice of redemption shall be mailed by the Operating Partnership,
postage prepaid, not less than 30 nor more than 60 days prior to the redemption
date, addressed to the respective holders of record of the units of Series D
Preferred Units to be redeemed at their respective addresses as they appear on
the records of the Operating Partnership. No failure to give such notice or any
defect thereto or in the mailing thereof shall affect the validity of the
proceedings for the redemption of any Series D Preferred Units except as to a
holder to whom notice was defective or not given. Each notice shall state (i)
the redemption date; (ii) the redemption price; (iii) the number of units of
Series D Preferred Units to be redeemed; (iv) the place or places
111
where units of
Series D Preferred Units are to be surrendered for payment of the redemption
price; and (v) that dividends on the Series D Preferred Units to be redeemed
shall cease to accrue on such redemption date. If fewer than all of the units of
Series D Preferred Units held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of units of Series D
Preferred Units held by such holder to be redeemed.
(d) Immediately prior to any redemption of Series D Preferred Units,
the Operating Partnership shall pay, in cash, any accumulated and unpaid
dividends through the redemption date, unless a redemption date falls after a
Dividend Record Date and prior to the corresponding Dividend Payment Date, in
which case each holder of Series D Preferred Units at the close of business on
such Dividend Record Date shall be entitled to the dividend payable on such
units on the corresponding Dividend Payment Date notwithstanding the redemption
of such units before such Dividend Payment Date. Except as provided above, the
Operating Partnership shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on Series D Preferred Units for which a notice of
redemption has been given.
(e) All Series D Preferred Units redeemed or repurchased pursuant to
this paragraph 4 shall be retired and shall be restored to the status of
authorized and unissued units of preferred units, without designation as to
Series D and may thereafter be reissued as units of any series of preferred
units.
(f) The Series D Preferred Units shall have no stated maturity and
shall not be subject to any sinking fund or mandatory redemption.
5. Voting Rights.
(a) Holders of the Series D Preferred Units shall not have any voting
rights, except as set forth in the Partnership Agreement.
(b) The affirmative vote or consent of the holders of two-thirds of the
units of Series D Preferred Units and the holders of all other classes or series
of Preferred Units of the Operating Partnership ranking on parity with the
Series D Preferred Units upon which like voting rights have been conferred and
are exercisable, outstanding at the time (voting together as a class), given in
person or by proxy, either in writing or at a meeting, will be required to: (i)
authorize or create, or increase the authorized or issued amount of, any class
or series of units ranking senior to the Series D Preferred Units with respect
to payment of dividends or the distribution of assets upon liquidation,
dissolution or winding-up of the Operating Partnership or reclassify any
authorized units of the Operating Partnership into such units, or create,
authorize or issue any obligation or security convertible into or evidencing the
right to purchase any such units; or (ii) amend, alter or repeal the provisions
of the Partnership Agreement or this Certificate of Designations, whether by
merger, consolidation, transfer or conveyance of substantially all of its assets
or otherwise (an "Event"), so as to materially and adversely affect any right,
preference, privilege or voting power of the Series D Preferred Units or the
holders thereof; provided however, with respect to the occurrence of any of the
Events set forth in (ii) above, so long as the Series D Preferred Units remain
outstanding with the terms thereof materially unchanged, taking into account
that, upon the occurrence of an Event, the Operating Partnership may not be the
112
surviving entity, the occurrence of such Event shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting power of
holders of Series D Preferred Units and in such case such holders shall not have
any voting rights with respect to the Events set forth in (ii) above. Except as
may be required by law, holders of Series D Preferred Units shall not be
entitled to vote with respect to (A) any increase or decrease in the total
number of authorized Preferred Units, (B) any increase, decrease or issuance of
any series of Preferred Units including the Series D Preferred Units or (C) the
creation or issuance of any other series of Preferred Units, in each case
referred to in clauses (A), (B) or (C) above, ranking on a parity with or junior
to the Series D Preferred Units with respect to the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding-up.
(c) 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 Series D
Preferred Units 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.
(d) In any matter in which the Series D Preferred Units may vote (as
expressly provided herein or as may be required by law), each unit of Series D
Preferred Units shall be entitled to one vote per each $25.00 in stated
liquidation preference.
6. Conversion.
The units of Series D Preferred Units shall not be convertible
into or exchangeable for any other property or units of the Operating
Partnership.
7. Ranking.
The Series D Preferred Units shall, with respect to dividend
rights and rights upon liquidation, dissolution or winding-up of the Operating
Partnership, rank (a) senior to the Common Units and to all units ranking junior
to such Series D Preferred Units; (b) on a parity with all units issued by the
Operating Partnership the terms of which specifically provide that such units
rank on a parity with the Series D Preferred Units; and (c) junior to all units
issued by the Operating Partnership (in accordance with this Certificate of
Designations) the terms of which specifically provide that such units rank
senior to the Series D Preferred Units. For purposes of this paragraph 7, the
term "units" does not include indebtedness convertible into units.
8. Exclusion of Other Rights.
The Series D Preferred Units shall not have any preferences or
other rights, voting powers, restrictions, limitations as to dividends or other
distributions, qualifications or terms or conditions of redemption other than as
expressly set forth in the Partnership Agreement and this Certificate of
Designations.
113
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 preferences or other rights, voting powers,
restrictions, limitations as to dividends or other distributions, qualifications
or terms or conditions of redemption of the Series D Preferred Units set forth
in the Partnership Agreement and this Certificate of Designations is 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 Series D Preferred Units 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
preferences or other rights, voting powers, restrictions, limitations as to
dividends or other distributions, qualifications or terms or conditions of
redemption of the Series D Preferred Units herein set forth shall be deemed
dependent upon any other provision thereof unless so expressed therein.
11. No Preemptive Rights.
No holder of Series D Preferred Units 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.
SIGNATURE APPEARS ON NEXT PAGE
114
IN WITNESS WHEREOF, CBL Holdings I, Inc. has caused this Certificate of
Designation of 7.375% Series D Cumulative Redeemable Preferred Units to be duly
executed by its Vice Chairman of the Board and Chief Financial Officer this 10th
day of December, 2004.
CBL Holdings I, Inc.
By: /s/ Xxxx X. Xxx
Xxxx X. Xxx
Vice Chairman of the Board
and Chief Financial Officer
115
EXHIBIT C
Allocations
1. Allocations of Gross Income, Net Income and Net Loss.
(a) Except as otherwise provided herein, in each tax year in which there is
sufficient Gross Income and Net Income to make all of the allocations
described in subsections (i) through (iv) below, Gross Income, Net Income and
Net Loss of the Partnership for such tax year shall be allocated among the
Partners in the following order and priority:
(i) First, Net Income shall be allocated to the relevant Partner, on account of
the Preferred Units, in an amount equal to the excess of (A) the amount of
Net Cash Flow distributed to such Partner pursuant to Sections 6.2(a)(i)
and (ii) and Section 6.2(d) (but only to the extent of the Preferred
Distribution Requirement and Preferred Distribution Shortfalls) for the
current and all prior Partnership tax years over (B) the amount of Net
Income previously allocated to such Partner pursuant to this Section (a)(i)
or pursuant to Section (b)(i);
(ii) Second, for any Partnership tax year ending on or after a date on which
Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated
to the relevant Partner, on account of the Preferred Units, in an amount
equal to the excess (or deficit) of the sum of the applicable Preferred
Redemption Amounts for the Preferred Units that have been or are being
redeemed during such Partnership tax year over the Preferred Unit Issue
Price of such Preferred Units;
(iii) Third, Gross Income shall be allocated to the relevant Partner, on account
of SCUs or S-SCUs, or Common Units received on a conversion or redemption
of SCUs or S-SCUs in an amount equal to the amount of cash distributed to
such Partner in respect of such SCUs or S-SCUs, or Common Units pursuant to
Sections 6.2(a)(iii), (iv) and (v); 6.2(b)(i), (ii) and (iii); and
6.2(c)(i)(ii) and (iii) (the "Target Amount"). The character of the items
of Gross Income allocated to the relevant Partners pursuant to this
subsection (iii) shall proportionately reflect the relative amounts of the
Partnership's Gross Income having such character for such year, excluding
from such Gross Income Net Capital Gain allocated pursuant to Section 1(c)
below; provided, however, that such items shall not include items described
in section (e) of the definition of Net Income or Net Loss, it being the
intention of the parties that the tax items allocated under Section 3(a)
corresponding to the items of Gross Income allocated pursuant to this
Section 1(a)(iii) will equal the Target Amount. If the amount of such items
differs from the Target Amount, the items of Gross Income allocated
pursuant to this Section 1(a)(iii) shall be adjusted to cause the amount of
such tax items to equal the Target Amount. For purposes of determining the
amount of cash distributed to such Partners, Special Tax Distributions
shall not be taken into account, and Extraordinary Return of Capital
Distributions shall be taken into account only to the extent that the
amount of such Extraordinary Return of Capital Distributions exceed the
aggregate of the Excess Allocations made to such Partners. For this
purpose, "Excess Allocations" mean the
C-1
116
excess of the Tax Net Capital Gain
allocated under Section 3(a) to holders of SCUs or S-SCUs and holders of
Common Units received on a conversion or redemption of SCUs and S-SCUs in
connection with allocations of Net Capital Gain under Section 1(c) over the
Special Tax Distribution made to such Partners. A distribution shall be
treated as an Extraordinary Return of Capital Distribution to the extent
that such distribution is reasonably attributable to (x) Net Financing
Proceeds or (y) proceeds allocable to a transaction generating Net Capital
Gain allocated pursuant to Section 1(c); in either case limited to the
excess of the Tax Net Capital Gain allocated under Section 3(a) to holders
of SCUs or S-SCUs and holders of Common Units received on a conversion or
redemption of SCUs or S-SCUs in connection with allocations of Net Capital
Gain under Section 1(c) over the Special Tax Distributions made to such
Partners.
(iv) Fourth, Gross Income shall be allocated to the relevant Partner, on account
of L-SCUs or Common Units received on a conversion or redemption of L-SCUs
in an amount equal to the amount of cash distributed to such Partner in
respect of such L-SCUs or Common Units pursuant to Sections 6.2(a)(iii),
(iv) and (v); 6.2(b)(i), (ii) and (iii); and 6.2(c)(i)(ii) and (iii) (the
"Target Amount"). The character of the items of Gross Income allocated to
the relevant Partners pursuant to this subsection (iv) shall
proportionately reflect the relative amounts of the Partnership's Gross
Income having such character for such year (such that if, for example, X%
of the Partnership's Gross Income for such year consisted of net capital
gain, then X% of the Gross Income allocated under this subsection (iv)
would consist of net capital gain); provided, however, that such items
shall not include items described in section (e) of the definition of Net
Income or Net Loss, it being the intention of the parties that the tax
items allocated under Section 3(a) corresponding to the items of Gross
Income allocated pursuant to this Section 1(a)(iv) will equal the Target
Amount. If the amount of such items differs from the Target Amount, the
items of Gross Income allocated pursuant to this Section 1(a)(iv) shall be
adjusted to cause the amount of such tax items to equal the Target Amount.
(v) Fifth, Gross Income shall be allocated to the relevant Partner, on account
of the Common Units issued in conjunction with the Panama City Mall
contribution, in an amount equal to the amount of cash distributed to such
Partner pursuant to Section 6.2 of the Partnership Agreement. The character
of the items of Gross Income allocated to the relevant Partners pursuant to
this subsection (v) shall proportionately reflect the relative amounts of
the Partnership's Gross Income having such character for such year (such
that if, for example, X% of the Partnership's Gross Income for such year
consisted of net capital gain, then X% of the Gross Income allocated under
this subsection (v) would consist of net capital gain); provided, however,
that such items shall not include items described in section (e) of the
definition of Net Income or Net Loss, it being the intention of the parties
that the tax items allocated under Section 3(a) corresponding to the items
of Gross Income allocated pursuant to this Section 1(a)(v) will equal the
Target Amount. If the amount of such items differs from the Target Amount,
the items of Gross Income allocated pursuant to this Section 1(a)(iv) shall
be adjusted to cause the amount of such tax items to equal the Target
Amount.
(vi) Sixth, any remaining Net Income and Net Losses (taking into account in
determining such Net Income or Net Losses the allocation of Gross Income
C-2
117
provided for in subsections (a) (iii), (a)(iv), and (a)(v) above) shall be
allocated among the Partners, on account of their Common Units other than
Common Units received on a conversion or redemption of SCUs, S-SCUs or
L-SCUs, in accordance with their proportionate ownership of Common Units
other than Common Units received on a conversion or redemption of SCUs,
S-SCUs or L-SCUs (except as otherwise required by the Regulations) any
remaining Net Income and Net Losses (taking into account in determining
such Net Income or Net Losses the allocation of Gross Income provided for
in subsections (a) (iii) and (a)(iv) above) shall be allocated among the
Partners, on account of their Common Units other than Common Units received
on a conversion or redemption of SCUs, S-SCUs or L-SCUs, in accordance with
their proportionate ownership of Common Units other than Common Units
received on a conversion or redemption of SCUs, S-SCUs or L-SCUs (except as
otherwise required by the Regulations).
(b) Except as otherwise provided herein, in each tax year in which there is
not sufficient Gross Income and Net Income to make all of the allocations
described in subsections (a)(i) through (a) (iv) above, Gross Income, Net Income
and Net Loss of the Partnership for such tax year shall be allocated among the
Partners in the following order and priority:
(i) First, Net Income shall be allocated to the relevant Partner, on account of
the Preferred Units, in an amount equal to the excess of (A) the amount of
Net Cash Flow distributed to such Partner pursuant to Sections 6.2(a)(i)
and (ii) and Section 6.2(d) (but only to the extent of the Preferred
Distribution Requirement and Preferred Distribution Shortfalls) for the
current and all prior Partnership tax years over (B) the amount of Net
Income previously allocated to such Partner pursuant to this Section (b)(i)
or pursuant to Section (a)(i)
(ii) Second, for any Partnership tax year ending on or after a date on which
Preferred Units are redeemed, Net Income (or Net Losses) shall be allocated
to the relevant Partner, on account of the Preferred Units, in an amount
equal to the excess (or deficit) of the sum of the applicable Preferred
Redemption Amounts for the Preferred units that have been or are being
redeemed during such Partnership tax year over the Preferred Unit Issue
Price of such Preferred Units;
(iii) Third, Gross Income, to the extent not previously taken into account in
making the allocations required under Section (a)(i) and (a)(ii), shall be
allocated to the relevant Partner, on account of SCUs or S-SCUs, or Common
Units received on a conversion or redemption of such SCUs or S-SCUs in an
amount equal to the Target Amount. The character of the items of Gross
Income allocated to the relevant Partners pursuant to this subsection (iii)
shall proportionately reflect the relative amounts of the Partnership's
Gross Income having such character for such year, excluding from such Gross
Income Net Capital Gain allocated pursuant to Section 1(c) below; provided,
however, that such items shall not include items described in Section (e)
of the definition of Net Income or Net Loss, it being the intention of the
parties that the tax items allocated under Section 3(a) corresponding to
the items of Gross Income allocated pursuant to this Section 1(b)(iii)
C-3
118
will equal the Target Amount. If the amount of such items differs from the
Target Amount, the items of Gross Income allocated pursuant to this Section
1(b)(iii) shall be adjusted to cause the amount of such tax items to equal
the Target Amount. For purposes of determining the amount of cash
distributed to such Partners, Special Tax Distributions shall not be taken
into account, and Extraordinary Return of Capital Distributions shall be
taken into account only to the extent that the amount of such Extraordinary
Return of Capital Distributions exceed the aggregate of the Excess
Allocations made to such Partners. For this purpose, "Excess Allocations"
mean the excess of the Tax Net Capital Gain allocated under Section 3(a) to
holders of SCUs or S-SCUs, and holders of Common Units
received on a conversion or redemption of SCUs or S-SCUs in connection with
allocations of Net Capital Gain under Section 1(c) over the Special Tax
Distribution made to such Partners. A distribution shall be treated as an
Extraordinary Return of Capital Distribution to the extent that such
distribution is reasonably attributable to (x) Net Financing Proceeds or
(y) proceeds allocable to a transaction generating Net Capital Gain
allocated pursuant to Section 1(c); in either case limited to the excess of
the Tax Net Capital Gain allocated under Section 3(a) to holders of SCUs or
S-SCUs, and holders of Common Units received on a conversion or redemption
of SCUs or S-SCUs in connection with allocations of Net Capital Gain under
Section 1(c) over the Special Tax Distributions made to such Partners.
(iv) Fourth, Gross Income, to the extent not previously taken into account in
making the allocations required under subsections (a)(i), (a)(ii), or
(a)(iii) shall be allocated to the relevant Partner, on account of L-SCUs
or Common Units received on a conversion or redemption of such L-SCUs in an
amount equal to the Target Amount. The character of the items of Gross
Income allocated to the relevant Partners pursuant to this subsection (iv)
shall proportionately reflect the relative amounts of the Partnership's
Gross Income having such character for such year (such that if, for
example, X% of the Partnership's Gross Income for such year consisted of
net capital gain, then X% of the Gross Income allocated under this
subsection (iv) would consist of net capital gain); provided, however, that
such items shall not include items described in Section (e) of the
definition of Net Income or Net Loss, it being the intention of the parties
that the tax items allocated under Section 3(a) corresponding to the items
of Gross Income allocated pursuant to this Section 1(b)(iv) will equal the
Target Amount. If the amount of such items differs from the Target Amount,
the items of Gross Income allocated pursuant to this Section 1(b)(iv) shall
be adjusted to cause the amount of such tax items to equal the Target
Amount.
(v) Fifth, Gross Income (to the extent not previously taken into account in
making the allocations required under subsections (a)(i), (a)(ii),
(a)(iii), or (a)(iv)) shall be allocated to the relevant Partner, on
account of Common Units issued in conjunction with the Panama City Mall
contribution as defined hereinbelow. The character of the items of Gross
Income allocated to the relevant Partners pursuant to this subsection (v)
shall proportionately reflect the relative amounts of the Partnership's
Gross Income having such character for such year (such that if, for
example, X% of the Partnership's Gross Income for such year consisted of
net capital gain, then X% of the Gross Income allocated under this
subsection (v) would consist of net capital gain); provided, however, that
such items shall not include items described in Section (e) of the
definition of Net Income or Net Loss, it being the intention of the parties
that the tax items allocated
C-4
119
under Section 3(a) corresponding to the items
of Gross Income allocated pursuant to this Section 1(b)(v) will equal the
Target Amount. If the amount of such items differs from the Target Amount,
the items of Gross Income allocated pursuant to this Section 1(b)(v) shall
be adjusted to cause the amount of such tax items to equal the Target
Amount.
(vi) Sixth, any remaining Net Income and Net Losses (taking into account in
determining such Net Income or Net Losses the allocation of Gross Income
provided for in subsections (b)(iii), (b)(iv), and (b)(v) above) shall be
allocated among the Partners, on account of their Common Units other than
Common Units received on a conversion or redemption of SCUs, S-SCUs, or
L-SCUs, in accordance with their proportionate ownership of Common Units
other than common units received on a conversion or redemption of SCUs,
S-SCUs, or L-SCUs (except as otherwise required by the Regulations) any
remaining Net Income and Net Losses (taking into account in determining
such Net Income or Net Losses the allocation of Gross Income provided for
in subsections (b)(iii) and (b)(iv) above) shall be allocated among the
Partners, on account of their Common Units other than Common Units received
on a conversion or redemption of SCUs, S-SCUs, or L-SCUs, in accordance
with their proportionate ownership of Common Units other than common units
received on a conversion or redemption of SCUs, S-SCUs, or L-SCUs (except
as otherwise required by the Regulations).
(c) Notwithstanding subsections (a) (iii) and (a)(vi), and subsections (b)
(iii) and (b)(vi), above, holders of SCUs or S-SCUs and holders of Common Units
received upon a conversion or redemption of SCUs or S-SCUs may be allocated
their proportionate share of Net Capital Gain recognized by the Partnership in a
taxable year (in accordance with their proportionate ownership of the aggregate
number of SCUs, S-SCUs, L-SCUs and Common Units, counting each SCU, S-SCU or
L-SCU, as applicable, as the number of Common Units into which it is convertible
in accordance with Exhibit E, Exhibit H, or Exhibit J as applicable), in
addition to the amount specified in subsection (a) (iii) above and subsection
(b) (iii) above, if each of the following requirements is satisfied:
(i) the Partnership shall have distributed to each holder of SCUs and S-SCUs in
cash pursuant to Section 6.2(a)(iv), 6.2(b)(ii) or 6.2(c)(ii) for the last
quarter of such taxable year an amount equal to the Basic Distribution
Amount or the S-SCU Basic Distribution Amount, as applicable (determined
without taking into account any Special Tax Distribution);
(ii) during such taxable year, the Partnership has recognized Net Capital Gain
in connection with a sale of, condemnation of, or disposition of one or
more Properties;
(iii) the Partnership has made or will make prior to January 30, of the
following tax year a cash distribution (a "Special Tax Distribution") to
the Partners, and the portion of such Special Tax Distribution made (x) to
the holders of SCUs and holders of Common Units received upon a conversion
or redemption of SCUs equals or exceeds the product of the maximum combined
federal, Ohio and Cleveland rates imposed on net capital gains of the
applicable holding period (taking into account recapture, if applicable,
C-5
120
and the deductibility of state and local taxes) multiplied by the amount of
Tax Net Capital Gain allocated under Section 3(a) to holders of SCUs and
holders of Common Units received upon a conversion or redemption of SCUs in
connection with the allocation under this Section 1(c) of Net Capital Gain
to such holders; and (y) to the holders of S-SCUs and holders of Common
Units received upon a conversion or redemption of S-SCUs equals or exceeds
the product of the maximum combined federal, Ohio and Cleveland rates
imposed on net capital gains of the applicable holding period (taking into
account recapture, if applicable, and the deductibility of state and local
taxes) multiplied by the amount of Tax Net Capital Gain allocated under
Section 3(a) to holders of S-SCUs and holders of Common Units received upon
a conversion or redemption of S-SCUs in connection with the allocation
under this Section 1(c) of Net Capital Gain to such holders. For these
purposes, Tax Net Capital Gain means net capital gain, as determined for
federal income tax purposes, which is governed by Section 3(a) and not
Section 3(c) hereof. For the avoidance of doubt, no portion of any Special
Tax Distribution will be taken into account when determining whether the
Partnership has satisfied the distribution requirement of Section
6.2(a)(iii), 6.2(a)(iv), 6.2(b)(i), 6.2(b)(ii), 6.2(c)(i) and 6.2(c)(ii);
(iv) (A) with respect to Special Tax Distributions to be made within two years
of the final Closing provided for in the Master Contribution Agreement, the
Special Tax Distribution will not cause the aggregate distributions to a
holder of SCUs or a holder of Common Units received on a conversion or
redemption of SCUs, other than distributions to such holder in respect of
the Basic Distribution Amount, to exceed the product of (x) the lesser of
such holder's percentage interest in Partnership profits for the year in
which the Special Tax Distribution is made or such holder's percentage
interest in Partnership profits for the life of the Partnership (as
determined for purposes of Regulations Section 1.707-4(b)) and (y) the
Partnership's net cash flow from operations for the year in which the
Special Tax Distribution is made (as determined for purposes of Regulations
Section 1.707-4(b)).
(B) with respect to Special Tax Distributions to be made
within two years of the Closing Date provided for in
the Contribution and Exchange Agreement for
Monroeville Mall, the Special Tax Distribution will not cause the
aggregate distributions to a holder of S-SCUs or a holder of Common
Units received on a conversion or redemption of S-SCUs, other than
distributions to such holder in respect of the S-SCU Basic Distribution
Amount, to exceed the product of (x) the lesser of such holder's
percentage interest in Partnership profits for the year in which the
Special Tax Distribution is made or such holder's percentage interest
in Partnership profits for the life of the Partnership (as determined
for purposes of Regulations Section 1.707-4(b)) and (y) the
Partnership's net cash flow from operations for the year in which the
Special Tax Distribution is made (as determined for purposes of
Regulations Section 1.707-4(b)).
(d) Notwithstanding subsections (a)(iv) and (a)(vi), and subsections
(b)(iv) and (b)(vi) above, holders of L-SCUs shall be allocated Gross
Income in excess of the amount in subsections (a)(iv) and (b)(iv) above
if and only if (i) all other Common Unit holders have received an
income and/or gain allocation equivalent to their cash distributions,
and (ii) such allocation of income and/or gain to holders of the L-SCUs
is in an amount equivalent to their
C-6
121
pro rata portion, treating each
SCU, S-SCU, and L-SCU as the number of Common Units into which such
SCU, S-SCU, and L-SCU are convertible pursuant to Exhibit E, Exhibit H,
or Exhibit J, as applicable, of the aggregate of the income and/or gain
remaining after the other Common Unit holders have been allocated
income and/or gain in an amount equivalent to the cash distributions
that they received for such fiscal year.
(e) Notwithstanding subsections (a)(v) and (a)(vi), and subsections (b)(v)
and (b)(vi), above, holders of Common Units issued in conjunction with
the Panama City Mall contribution as defined hereinbelow, shall be
allocated Gross Income in excess of the amount in subsections (a)(v)
and (b)(v) above if and only if (i) all other Common Unit holders have
received an income and/or gain allocation equivalent to their cash
distributions, and (ii) such allocation of income and/or gain to
holders of the L-SCUs is in an amount equivalent to their pro rata
portion, treating each SCU, S-SCU, and L-SCU as the number of Common
Units into which such SCU, S-SCU, and L-SCU are convertible pursuant to
Exhibit E, Exhibit H, or Exhibit J, as applicable, of the aggregate of
the income and/or gain remaining after the other Common Unit holders
have been allocated income and/or gain in an amount equivalent to the
cash distributions that they received for such fiscal year.
(f) Notwithstanding subsections (a), (b), (c), (d) and (e), Net Income and
Net Losses from a Liquidation Transaction shall be allocated as
follows:
(i) First, Net Income (or Net Losses) from the Liquidation Transaction
shall be allocated to the relevant Partner, in connection with the
Preferred Units, in an amount equal to the excess (or deficit) of the
sum of the applicable Preferred Redemption Amounts of the Preferred
Units which have been or will be redeemed with the proceeds of the
Liquidation Transaction over the Preferred Unit Issue Price of such
Preferred Units;
(ii) Second, Net Income (or Net Losses) from the Liquidation Transaction
shall be allocated among the Partners owning SCUs, S-SCUs, L-SCUs or
Common Units so that the Capital Accounts of the Partners (excluding
from the Capital Account of any Partner the amount attributable to such
Partner's Preferred Units) are proportional to the number of Common
Units held by each Partner. For purposes of this subsection (ii), each
SCU, S-SCU or L-SCU shall be treated as the number of Common Units into
which the SCU, S-SCUs or L-SCUs are convertible pursuant to the terms
of Exhibit E, Exhibit H or Exhibit J, as applicable, to the Agreement.
(iii) Third, any remaining Net Income or Net Losses from the Liquidation
Transaction shall be allocated among the Partners owning SCUs, S-SCUs,
L-SCUs or Common Units in accordance with their proportionate ownership
of Common Units. For purposes of this subsection (iii), each SCU, S-SCU
or L-SCU shall be treated as the number of Common Units into which the
SCU, S-SCU or L-SCU is convertible pursuant to the terms of Exhibit E,
Exhibit H or Exhibit J, as applicable, to the Agreement.
2. Special Allocations.
C-7
122
Notwithstanding any provisions of Section 1 of this Exhibit C,
the following special allocations shall be made in the following order:
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). If
there is a net decrease in Partnership Minimum Gain for any Partnership fiscal
year (except as a result of conversion or refinancing of Partnership
indebtedness, certain capital contributions or revaluation of the Partnership
property as further outlined in Regulation Sections 1.704-2(d)(4), (f)(2) or
(f)(3)), each Partner shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to that Partner's share of the net decrease in Partnership Minimum Gain. The
items to be so allocated shall be determined in accordance with Regulation
Section 1.704-2(f). This subsection (a) is intended to comply with the minimum
gain chargeback requirement in said section of the Regulations and shall be
interpreted consistently therewith. Allocations pursuant to this subsection (a)
shall be made in proportion to the respective amounts required to be allocated
to each Partner pursuant thereto.
(b) Minimum Gain Attributable to Partner Nonrecourse Debt. If
there is a net decrease in minimum Gain Attributable to Partner Nonrecourse Debt
during any fiscal year (other than due to the conversion, refinancing or other
change in the debt instrument causing it to become partially or wholly
nonrecourse, certain capital contributions, or certain revaluations of
Partnership property as further outlined in Regulation Section 1.704-2(i)(4)),
each Partner shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to that
Partner's share of the net decrease in the Minimum Gain Attributable to Partner
Nonrecourse Debt. The items to be so allocated shall be determined in accordance
with Regulation Sections 1.704-2(i)(4) and (j)(2). This subsection (b) is
intended to comply with the minimum gain chargeback requirement with respect to
Partner Nonrecourse Debt contained in said sections of the Regulations and shall
be interpreted consistently therewith. Allocations pursuant to this subsection
(b) shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto.
(c) Qualified Income Offset. In the event a Limited Partner
unexpectedly receives any adjustments, allocations or distributions described in
Regulation Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), and such Limited
Partner has an Adjusted Capital Account Deficit, items of Partnership income and
gain shall be specially allocated to such Partner in an amount and manner
sufficient to eliminate the Adjusted Capital Account Deficit as quickly as
possible. This subsection (c) is intended to constitute a "qualified income
offset" under Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
fiscal year or other applicable period shall be allocated to the Partners in
accordance with their proportionate ownership of Common Units other than Common
Units issued on a redemption or conversion of SCUs, S-SCUs, or L-SCUs.
(e) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any fiscal year or other applicable period shall be specially
allocated to the Partner that bears the economic risk of loss for the debt
(i.e., the Partner Nonrecourse Debt) in respect of which such Partner
Nonrecourse Deductions are attributable (as determined under Regulation Sections
1.704-2(b)(4) and (i)(1)).
C-8
123
(f) Curative Allocations. The Regulatory Allocations (as
defined below) shall be taken into account in allocating other items of income
(including Gross Income), gain, loss, and deduction among the Partners so that,
to the extent possible, the cumulative net amount of allocations of Partnership
Items under Sections 1 and 2 of this Exhibit C shall be equal to the net amount
that would have been allocated to each Partner if the Regulatory Allocations had
not occurred. To the extent that there is an allocation under Section 2(a) or
(b) hereof of Partnership income or gain to a holder of SCUs, S-SCUs, or L-SCUs
or Common Units issued on a redemption or conversion of SCUs, S-SCUs, or L-SCUs,
there will be a correspondingly smaller allocation of Gross Income to such
holder under Section 1(a)(iii) or l(b)(iii) hereof. This subsection (f) is
intended to minimize to the extent possible and to the extent necessary any
economic distortions which may result from application of the Regulatory
Allocations and shall be interpreted in a manner consistent therewith. For
purposes hereof, "Regulatory Allocations" shall mean the allocations provided
under this Section 2.
3. Tax Allocations.
(a) Generally. Subject to subsections (b) and (c) hereof,
items of income, gain, loss, deduction and credit to be allocated for income tax
purposes (collectively, "Tax Items") shall be allocated among the Partners on
the same basis as their respective book items.
(b) Sections 1245/1250 Recapture. If any portion of gain from
the sale of property is treated as gain which is ordinary income by virtue of
the application of Code Section 1245 or 1250 ("Affected Gain"), then (A) such
Affected Gain shall be allocated among the Partners in the same proportion that
the depreciation and amortization deductions giving rise to the Affected Gain
were allocated and (B) other Tax Items of gain of the same character that would
have been recognized, but for the application of Code Section 1245 and/or 1250,
shall be allocated away from those Partners who are allocated Affected Gain
pursuant to subsection (A) so that, to the extent possible, the other Partners
are allocated the same amount, and type, of capital gain that would have been
allocated to them had Code Section 1245 and/or 1250 not applied. For purposes
hereof, in order to determine the proportionate allocations of depreciation and
amortization deductions for each fiscal year or other applicable period, such
deductions shall be deemed allocated on the same basis as Net Income and Net
Loss for such respective period.
(c) Allocations Respecting Section 704(c) and Revaluations:
Curative Allocations Resulting from the Ceiling Rule. Notwithstanding subsection
(b) hereof, Tax Items with respect to Partnership property that is subject to
Code Section 704(c) and/or Regulation Section 1.704-1(b)(2)(iv)(f)
(collectively, "Section 704(c) Tax Items") shall be allocated in accordance with
said Code section and/or Regulation Section 1.704-1(b)(4)(i), as the case may
be. The allocation of Tax Items shall be subject to the ceiling rule stated in
Regulation Section 1.704-1(c) and Regulation Section 1.704-3, except that with
respect to the properties contributed to the Partnership (the "Xxxxxx
Properties") pursuant to the Master Contribution Agreement dated September 25,
2000 among Xxxxxx Realty Investors Limited Partnership, CBL & Associates
Properties, Inc., CBL & Associates Limited Partnership and others (as amended,
the "Master Contribution Agreement"), the property ( "Monroeville Mall")
contributed to the Partnership pursuant to the Contribution and Exchange
Agreement for Monroeville Mall, the property ("Laurel Park Place") contributed
to the Partnership pursuant to the Contribution and Exchange Agreement for
Laurel Park Place and the property ("Panama City Mall") contributed to the
C-9
124
Partnership pursuant to the Contribution and Exchange for Panama City Mall,
curative allocations of gain recognized on a disposition of a direct or indirect
interest in a Xxxxxx Property, the Monroeville Mall, Laurel Park Place or Panama
City Mall may be made to the extent permitted in Regulation Section 1.704-3(c).
The Partnership shall allocate items of income, gain, loss and deduction
allocated to it by a Property Partnership to the Partner or Partners
contributing the interest or interests in such Property Partnership, so that, to
the greatest extent possible, such contributing Partner or Partners are
allocated the same amount and character of items of income, gain, loss and
deduction with respect to such Property Partnership that they would have been
allocated had they contributed undivided interests in the assets owned by such
Property Partnership to the Partnership in lieu of contributing the interest or
interests in the Property Partnership to the Partnership. Notwithstanding the
above, with respect to property contributed to the Partnership after the date
hereof, such Section 704(c) Tax Items may be allocated under such method
selected by the General Partner that is consistent with the Section 704(c)
Regulations.
4. Certain Allocations of Depreciation and Loss.
Notwithstanding anything in this Exhibit C to the contrary, depreciation,
amortization, gain and loss attributable to an adjustment under Section 743 or
Section 734 of the Code of the federal income tax basis of Partnership assets
(including adjustments made prior to or after the contribution of the relevant
assets or indirect interests therein to the Partnership) shall be allocated to
the direct or indirect partner, or such partner's successor or assign, whose
death or acquisition of a direct or indirect interest gave rise to the
adjustments, except to the extent such allocations would not be valid as a
result of a change in tax law occurring after the date of the Master
Contribution Agreement.
5. Clarification Regarding L-SCUs' Conversion to Common Units.
Throughout this Exhibit C, reference is made to "L-SCUs or Common Units received
on a conversion or redemption of such L-SCUs" or words to similar effect. The
terms and rights of the L-SCUs are set forth on Exhibit J of the Partnership
Agreement and such rights do not include the right on the part of the holder of
L-SCUs to convert such L-SCUs to Common Units in all circumstances. However,
circumstances may arise where holders of L-SCUs receive Common Units in exchange
for or in redemption of L-SCUs, i.e., on a Recapitalization Transaction as
defined in Exhibit J. The references to L-SCUs being converted to Common Units
or Common Units being received in redemption of L-SCUs as set forth above shall
not be construed as amending, reducing, expanding or otherwise changing the
terms and rights of the L-SCUs as set forth on Exhibit J.
C-10
125
EXHIBIT D
Rights Terms
The Rights granted to the Limited Partners pursuant to Section 11.1
hereof shall be subject to the following terms and conditions:
1. Definitions. Capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Agreement, and, in addition, the
following terms and phrases shall, for purposes of this Exhibit D and the
Agreement, have the meanings set forth below:
"Beneficially Own" shall mean the ownership of shares of Common Stock
by a Person who would be treated as an owner of such shares of common Stock
either directly or indirectly though the application of Sections 542 and 544 of
the Code, as modified by Section 856(h)(1)(B) of the Code, and any comparable
successor provisions thereto.
"Beneficial Ownership Limit" shall mean (A) with respect to any Person
other than members of the Lebovitz Group and the Xxxxxxx Group, 6% of the
outstanding Capital Stock of the Company, (B) with respect to the Lebovitz
Group, 23% of the outstanding Capital Stock of the Company and (C) with respect
to the Xxxxxxx Group, 8% of the outstanding Capital Stock of the Company, in
each case, determined by (i) number of shares outstanding, (ii) voting power or
(iii) value (as determined by the Company's board of directors), whichever
produces the smallest holding of Capital Stock under the three methods, and
computed taking into account all outstanding shares of Capital Stock and, to the
extent provided by the Code, all shares of Capital Stock issuable under existing
options and Exchange Rights that have not been exercised or deferred stock that
has not vested.
"Constructively Own" shall mean the ownership of shares of Common Stock
by a Person who would be treated as an owner of such shares of Common Stock
either directly or indirectly through the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code, and any comparable successor
provisions thereto.
"Constructive Ownership Limit" shall mean (A) with respect to any
Person other than members of the Lebovitz Group and the Xxxxxxx Group, 6% of the
outstanding Capital Stock of the Company, (B) with respect to the Lebovitz
Group, 23% of the outstanding Capital Stock of the Company and (C) with respect
to the Xxxxxxx Group, 8% of the outstanding Capital Stock of the Company, in
each case, determined by (i) number of shares outstanding, (ii) voting power or
(iii) value (as determined by the Company's board of directors), whichever
produces the smallest holding of Capital Stock under the three methods, and
computed taking into account all outstanding shares of Capital Stock and, to the
extent provided by the Code, all shares of Capital Stock issuable under existing
options and Exchange Rights that have not been exercised or deferred stock that
has not vested; provided, however, that members of the Lebovitz Group or the
Xxxxxxx Group shall be subject to a Constructive Ownership Limit of 9.9% of the
outstanding Capital Stock of the Company at all times that (x) members of the
Lebovitz Group or
D-1
126
the Xxxxxxx Group Constructively own (i) 10% or more of either
the total combined voting power of all classes of stock entitled to vote or the
total number of all classes of stock entitled to vote or the total number of
outstanding shares of stock of any Tenant that is treated as a corporation for
federal income tax purposes or (ii) an interest of 10% or more in the assets or
net profits of any Tenant that is not treated as a corporation for federal
income tax purposes and not treated as a corporation for federal income tax
purposes and(y) the aggregate amount of income derived by the Company in its
immediately preceding taxable year from such Tenants whose ownership is
described in clause (x) hereof exceeded the amount derived from Tenants on
November 3, 1993, adjusted as provided herein.
"Election Notice" shall mean the written notice to be given by the
Company to the Exercising Partners in accordance with the provisions of
Paragraph 6 hereof in response to the receipt by the Company of an Exchange
Notice from such Exercising Partners, the form of which Election Notice is
attached hereto as Schedule 2.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Exchange Consideration" shall have the meaning set forth in Paragraph
5 hereof.
"Exchange Notice" shall have the meaning set forth in Paragraph 2(a)
hereof.
"Exchange Rights" shall have the meaning set forth in Paragraph 2(a)
hereof.
"Exercising Partners" shall have the meaning set forth in Paragraph 2
hereof.
"Grandfathered Related Party Tenant" shall mean any Tenant which is a
Related Party Tenant at the time that the Agreement of which this Exhibit is a
part is entered into, as set forth on Schedule 4 hereto.
"Xxxx-Xxxxx Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
"Independent" shall have the meaning set forth in the Amended and
Restated Certificate of Incorporation of the Company.
"Lebovitz Group" shall mean (i) Xxxxxxx X. Xxxxxxxx and (ii) any
Beneficial Owner or Constructive Owner of shares of Common Stock whose shares of
Common Stock are Beneficially Owned or Constructively Owned by Xxxxxxx X.
Xxxxxxxx or members of his family.
"Offered Units" shall mean the Common Units of the Exercising partners
identified in an Exchange Notice which, pursuant to the exercise of Exchange
Rights, can be acquired by the Company under the terms hereof.
"Ownership Limit" shall mean the Beneficial Ownership Limit or the
Constructive Ownership Limit, as appropriate.
D-2
127
"Registration Rights" shall mean the registration right attributable to
shares of Common Stock, if any, issued to Limited Partners in accordance with
the provisions hereof, as set forth in Schedule 3 hereto.
"Related Party Tenant" shall mean any Tenant 10% or more of either the
total combined voting power of all classes of stock entitled to vote or the
total number of outstanding shares of stock of which, in the case of a corporate
Tenant, or 10% or more of the assets or net profits of which, in the case of a
non-corporate Tenant, is Constructively Owned by members of the Lebovitz Group
or the Xxxxxxx Group.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor statute.
"Tenant" shall mean any Person that rents real property owned, directly
or indirectly, by the Company or the partnership.
"Xxxxxxx Group" shall mean (i) Xxxxx X. Xxxxxxx and (ii) any Beneficial
Owner or Constructive Owner of shares of Common Stock whose shares of Common
Stock are Beneficially Owned or Constructively owned by Xxxxx X. Xxxxxxx or
members of his family.
2. Delivery of Exchange Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth herein,
deliver to the Company written notice (the "Exchange Notice") pursuant to which
such Exercising Partners elect to exercise their Right to exchange (the
"Exchange Rights") all or any portion of their Common Units for Exchange
Consideration subject to the limitations contained in Paragraphs 3 and 4 below.
3. Exercise Subject to Ownership Limit. Exchange Rights may be
exercised at any time and from time to time, to the extent that, upon exercise
of the Exchange Rights, the Exercising Partner shall not, on a cumulative basis,
Beneficially Own or Constructively Own shares of Common Stock including shares
of Common Stock to be issued in connection with the exercise of such Exchange
Rights, in excess of the applicable Ownership Limit. If an 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 Exchange Rights cannot be exercised in full, the Exchange Notice
shall be deemed to be modified such that the Exchange Rights shall be exercised
only to the extent permitted under the applicable Ownership Limit under the
Certificate of Incorporation of the Company, and the Exchange Notice with
respect to the remainder of such Exchange Rights shall be deemed to have been
withdrawn.
4. Limitation on Exercise of Exchange Rights. Exchange Rights may be
exercised at any time and from time to time, provided, however, that, except
with the prior written consent of the General Partner, (a) only one (1) Exchange
Notice may be delivered to the Company by any Limited Partners during any
consecutive 12-month period; and (b) no Exchange Notice may be delivered with
respect to Common Units having a value of less than $250,000 or result in the
exchanging Limited Partner owning Common Units having a value of less than
$250,000 after giving effect to the exchange, in each case calculated by
multiplying the Common Stock Amount with respect to such Common Units by the
Current Per Share Market Price.
D-3
128
5. Computation of Exchange Consideration/Form of Payment. The exchange
consideration ("Exchange Consideration") payable by the Company to each
Exercising partner shall be equal to the Common Stock Amount with respect to the
Offered Units multiplied by the Current Per Share Market Price, each computed as
of the date on which the Exchange Notice was delivered to the Company (the
"Computation Date"). The 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
Exercising Partner'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 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).
6. Closing; Delivery of Election Notice. Within thirty (30) days after
receipt by the Company of any Exchange Notice delivered in accordance with the
requirements of Paragraphs 2 and 4 hereof, the Company shall deliver to the
Exercising Partners a notice (an "Election Notice"), which Election Notice shall
set forth the computation of the Exchange Consideration and shall specify the
form of the Exchange Consideration (which shall be in accordance with Paragraph
5 hereof) to be paid by the Company to such Exercising Partners and the date,
time and location for completion of the purchase and sale of the Offered Units,
which date shall, to the extent required, in no event be more than (A) in the
case of Offered Units with respect to which the Company has elected to pay the
Exchange Consideration by issuance of shares of Common Stock, the later of (i)
ten (10) days after delivery by the Company of the Election Notice for Offered
units and (ii) the expiration or termination of the waiting period applicable to
each Exercising Partner, if any, under the Xxxx-Xxxxx Act or (B) in the case of
Offered Units with respect to which the Company has elected to pay the Exchange
Consideration in cash, sixty (60) days after the initial date of receipt by the
Company of the Exchange Notice for such 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 Offered
Units. Notwithstanding the foregoing, the Company agrees to use its reasonable
efforts to cause the closing of the exchange hereunder to occur as quickly as
possible.
7. Adjustment to Exchange Consideration. If the Company elects to pay
all or any portion of the Exchange Consideration in cash and if, as a result
thereof, the Company elects to raise such cash through a public offering of its
securities, borrowings or otherwise, the aggregate Exchange Consideration
computed under Paragraph 5 above shall be reduced by an amount ("Transaction
Expenses") equal to the expenses incurred by the Company in connection with such
raising of funds allocable to the amounts required to pay the Exchange
Consideration hereunder; provided, however, notwithstanding the foregoing, the
Exchange Consideration shall not be reduced hereunder by an amount exceeding 5%
of the Exchange Consideration computed without regard to the adjustment for
Transaction Expenses.
8. Closing Deliveries. At the closing of the purchase and sale of
Offered Units, payment of the Exchange consideration shall be accompanied by
proper instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the Exercising Partner with respect to (x)
its due authority to sell all of the right, title and interest in and to such
Offered Units to the Company, (y) the status of the Offered Units being sold,
free and clear of all
D-4
129
Liens and (z) its intent to acquire the Common Stock for
investment purposes and not for distribution, and (B) the Company with respect
to due authority for the purchase of such Offered Units, and (ii) to the extent
that any shares of Common Stock are issued in payment of the Exchange
Consideration or any portion thereof, (A) an opinion of counsel for the Company,
reasonably satisfactory to the Exercising Partners, to the effect that (I) such
shares of Common Stock have been duly authorized, are validly issued, fully-paid
and non-assessable and (II) issuance of such shares will not violate the
Ownership Limit, and (B) a stock certificate of certificates evidencing the
shares of Common Stock to be issued and registered in the name of the Exercising
Partner or its designee with an appropriate legend reflecting that such shares
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 established by an opinion of counsel
satisfactory to the Company.
9. Term of Rights. Unless sooner terminated, the rights of the
parties with respect to the Rights shall commence as of the date hereof and
lapse for all purposes and in all respects on November 3, 2043; provided,
however, that the parties hereto shall continue to be bound by an Exchange
Notice delivered to the Company prior to such date. Notwithstanding any
provisions of this Exhibit to the contrary, Exchange Rights associated with
Exchange Rights held by members of the Lebovitz Group or the Xxxxxxx Group shall
terminate, to the extent necessary to reduce the Constructive Ownership of the
members of the Lebovitz Group or the Xxxxxxx Group to 9.9% of the value of the
outstanding Common Stock (treating, for these purposes, shares of Common Stock
subject to Exchange Rights associated with Rights held by members of the
Lebovitz Group or the Xxxxxxx Group, as applicable, as outstanding), immediately
if:
(a) the Constructive Ownership by the members of the
Lebovitz Group of any Grandfathered Related Party Tenant increases;
(b) there comes to be a Related Party Tenant other
than a Grandfathered Related Party Tenant;
(c) the rent from Related Party Tenants to be taken
into account for purposes of Section 856(d) of the Code in annual
amounts exceeds the amounts derived from Related Party Tenants on the
date of the Initial Public Offering or such other amount as a majority
of the Independent members of the board of directors of the Company
shall determine; or
(d) there is an increase (as determined on an
annualized basis at the time of any rental payment) of more than 5% in
the rental payments derived by the Company or the Partnership from a
Grandfathered Related Party Tenant with respect to any real property
owned, directly or indirectly, by the Company or the Partnership over
the rental payments made by such Grandfathered Related Party Tenant
with respect to such real property at the time that the Agreement of
which this Exhibit is a part is entered into.
10. Covenants of the Company. To facilitate the Company's
ability to fully perform its obligations hereunder, the Company covenants and
agrees as follows:
D-5
130
(a) At all times during the pendency of the 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 Exchange Consideration in regard to all Common
Units which are from time to time outstanding.
(b) 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 Limited Partners 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.
(c) During the pendency of the Rights, the Limited
Partner Representatives shall receive 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.
(d) 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 Limited partners under this Exhibit and the Agreement.
(e) Notwithstanding the Company's determination as to
the form in which the Exchange Consideration shall be payable, the
Company shall be required to pay the Exchange Consideration by
cashier's check or wire transfer of New York clearing house funds to
the extent that payment by issuance of Common Stock would disqualify
the Company from being characterized as a real estate investment trust
under the Code.
11. Limited Partners' Covenant. Each Limited Partner covenants
and agrees with the Company that all Offered Units tendered to the Company in
accordance with the exercise of Rights herein provided shall be delivered to the
Company free and clear of all Liens and should any Liens exist or arise with
respect to such Units, the Company shall be under no obligation to acquire the
same unless, in connection with such acquisition, the Company has elected to pay
such portion of the 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 is expressly authorized to apply such portion of
the Exchange Consideration as may be necessary to satisfy any indebtedness in
full and to discharge such Lien in full. Each Limited Partner further agrees
that, in the event any state or local property transfer tax is payable as a
result of the transfer of its Offered Units to the Company (or its designee),
such Limited Partner shall assume and pay such transfer tax.
D-6
131
12. Registration Rights. The Limited Partners shall have the
Registration Rights set forth in Schedule 3 hereof with respect to shares of
Common Stock acquired hereunder.
D-7
132
EXHIBIT D SCHEDULE 1
EXCHANGE NOTICE
To: CBL & Associates Limited Partnership
Reference is made to that certain Third Amended and Restated
Agreement of Limited Partnership of CBL & Associates Limited Partnership dated
June 15, 2005 (the "Partnership Agreement"). Capitalized terms used but not
defined herein shall have the meanings set forth in the Partnership Agreement.
Pursuant to Article XI and Paragraph 2 of Exhibit D of the Partnership
Agreement, each of the undersigned, being a limited partner of the Partnership
(an "Exercising Partner"), hereby elects to exercise its Exchange Rights as to a
portion or portions of its Partnership Units all as specified opposite its
signature below:
Dated:
---------------------------
Number of
Offered
Exercising Partner Units
------------------------------------------ ----------------------------------
Exercising Partners:
----------------------------------------
----------------------------------------
D-8
133
EXHIBIT D SCHEDULE 2
ELECTION NOTICE
To: All Exercising Partners
Reference is made to that certain Third Amended and Restated Agreement of
Limited Partnership of CBL & Associates Limited Partnership dated June 15, 2005
(the "Partnership Agreement"). All capitalized terms used but not defined herein
shall have the meanings set forth in the Partnership Agreement. Pursuant to
Paragraph 6 of Exhibit D to the Partnership Agreement, the undersigned, being
the General Partner of the Partnership, hereby notifies the Exercising Partners
that (a) the Exchange Consideration for the Offered Units as to which the
Exchange Rights are being or are deemed to be exercised is $________________ ,
the computation of which is set forth on an attachment hereto; (b) $___________
of the Exchange Consideration is payable in cash and the balance thereof is
payable by issuance of ______________ shares of Common Stock; and (c) the
closing of the purchase and sale of the Offered Units as to which the Exchange
Rights are being or are deemed to be exercised shall take place at the offices
of _____________________________________ at _____________ a.m., local time, on
____________ .
Dated: __________________________________
CBL HOLDINGS I, INC.,
a Delaware corporation
By: _________________________
Its:
X-0
000
XXXXXXX X SCHEDULE 3
REGISTRATION RIGHTS
TABLE OF CONTENTS
ARTICLE I.
REGISTRATION STATEMENT
SECTION 1.1. REGISTRATION STATEMENT............................
SECTION 1.2. RESTRICTIONS ON SALES BY HOLDERS..................
ARTICLE II.
REGISTRATION PROCEDURES
SECTION 2.1. REGISTRATION PROCEDURES...........................
SECTION 2.2. REGISTRATION EXPENSES.............................
ARTICLE III.
INDEMNIFICATION
SECTION 3.1. INDEMNIFICATION BY THE COMPANY....................
SECTION 3.2. INDEMNIFICATION BY THE HOLDERS....................
SECTION 3.3. CONDUCT OF INDEMNIFICATION PROCEEDINGS............
SECTION 3.4. CONTRIBUTION......................................
ARTICLE IV.
MISCELLANEOUS
SECTION 4.1. CERTAIN OTHER OBLIGATIONS OF THE COMPANY.........
SECTION 4.2. SUCCESSORS AND ASSIGNS............................
SECTION 4.3. AMENDMENTS AND WAIVERS............................
SECTION 4.4. NOTICES...........................................
SECTION 4.5. SPECIFIC PERFORMANCE..............................
SECTION 4.6. HEADINGS..........................................
SECTION 4.7. SEVERABILITY......................................
SECTION 4.8. GOVERNING LAW.....................................
D-10
135
WHEREAS, the Persons listed on Exhibit A to the Partnership
Agreement and designated as such (the "Holders") have been issued Class A Common
Units ("Units") of CBL & Associates Limited Partnership, a Delaware limited
partnership (the "Partnership"), which Units are exchangeable for shares of the
common stock, par value $.01 per share, of the Company (the "Shares") pursuant
to the terms of certain Contribution and Exchange Agreements between certain
Holders and the Partnership and the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of June 30, 1998, as such
agreement may be amended pursuant to the terms thereof (the "Partnership
Agreement").
WHEREAS, in connection with the issuance of the Units to the
Holders, the Company has set forth the following terms as set forth herein:
ARTICLE I.
Registration Statement
SECTION 1.1. Registration Statement. (a) Promptly, and in any
event (except as otherwise provided herein) within 20 business days, after any
Holder delivers written notice (a "Registration Request") to the Company
requesting registration of Shares or other Registrable Securities, the Company
shall file a registration statement (the "Registration Statement") under Rule
415 of the Securities Act of 1933, as amended, and the regulations promulgated
thereunder (the "1933 Act"), with the Securities and Exchange Commission ("SEC")
covering resales of all of the Shares which have been or may be obtained upon
exchange of the Units and any other Registrable Securities (as hereinafter
defined), and shall use its reasonable efforts to cause the Registration
Statement to become effective under the 1933 Act within three months after the
initial filing thereof. Notwithstanding anything to the contrary in the
foregoing, if the Company shall furnish to the Holders making the Registration
Request a certificate signed by the Chief Executive Officer or Chief Financial
Officer of the Company stating that, in the good faith judgment of the board of
directors of the Company, it would be significantly disadvantageous to the
Company and its stockholders for such Registration Statement to be filed on or
before the date filing would be required in accordance with the foregoing, the
Company shall have an additional 30 days in which to file such Registration
Statement. The Registration Statement shall be available for the sale of
Registrable Securities in accordance with the intended method or methods of
distribution by the Selling Holders (as hereinafter defined), other than an
underwritten offering, and (ii) shall comply as to form in all material respects
with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith. The term "Selling Holder"
shall mean a Holder of Registrable Securities the public sale of which have been
registered under the 1933 Act pursuant to the Registration Statement. The
Company agrees that it shall deliver to any Holder who so requests for its
review and comment a copy of the Registration Statement and any amendments and
supplements thereto (other than post-effective amendments) prior to filing
thereof with the SEC. Notwithstanding anything in the foregoing to the contrary,
the Company shall not be obligated to file such Registration Statement if (i)
the Common Stock Amount (as defined in the Partnership Agreement) with respect
to the Specified Units (as defined below) multiplied by the Current Per Share
Market Price as of the date of such Registration Request of the Specified shares
(as defined below) (the product being referred to herein as the "Unit Value") is
less than $3 million
D-11
136
or (ii) if the Company has filed a Registration Statement
with respect to any of the Units issued pursuant to a Contribution and Exchange
Agreement with such Holder during the 12 month period preceding such
Registration Request.
(a) Once the Registration Statement becomes effective, the
Company shall keep the Registration Statement continuously effective and
available for resale of the Registrable Securities until the earliest to occur
of (i) the sale of all of the Registrable Securities by the Holders in
accordance with the Registration Statement, (ii) the date on which, in the
opinion of counsel for the Company, all of the Registrable Securities become
eligible for sale pursuant to Rule 144 (or any successor provision to such rule)
under the 1933 Act without regard to any volume or manner of sale limitations,
of (iii) in the opinion of counsel to the Company, the Registrable Securities
may be distributed without registration under the 1933 Act. Notwithstanding
anything to the contrary in the foregoing, if the Company determines that it is
necessary to amend or supplement such Shelf Registration Statement and if the
Company shall furnish to the Holders a certificate signed by the Chief Executive
Officer or Chief Financial Officer of the Company stating that, in the good
faith judgment of the board of directors of the Company, it would be
significantly disadvantageous to the Company and its stockholders for any such
Registration Statement to be amended or supplemented, the Company may defer such
amending or supplementing of such Registration Statement for not more than 50
days and in such event the Holders shall be required to discontinue disposition
of any Registrable Securities covered by such Registration Statement during such
period.
(b) The right of any Holder to give a Registration Request
shall be subject to the following:
(i) Such Holder will certify in such Registration Request that
it has a bona fide intention to sell all or a portion of the Shares (the
"Specified Shares"), as specified in such Registration Request, which may be
obtained upon exchange of any such Units pursuant to the Rights (as defined in
the Partnership Agreement), within 12 months after the effective date of such
Registration Statement (the Units for which the Specified Shares are
exchangeable being herein called the "Specified Units"); and
(ii) Such Holder shall offer to sell the Specified Units to
the Company for a cash purchase price equal to the Unit Value; and
(iii) The Company may elect not to file such Registration
Statement if it shall irrevocably elect, by written notice to such Holder, to
accept the offer referred to in subparagraph (ii) above within 15 business days
after receipt thereof and, in the event of such acceptance, the Company shall be
obligated to close the purchase of the Specified Shares within 10 business days
after such acceptance.
The provisions of this Section 1.01(c) shall not apply with
respect to any Holder who holds Registrable Securities that it received pursuant
to an exercise of the Rights (as defined in the Partnership Agreement).
D-12
137
(c) The term "Registrable Securities" shall mean (i) any
Shares that have been or may be issued from time to time upon the exchange of
the Units (including any additional units of limited partnership interest of the
Partnership or any successor entity received in exchange for, or as a dividend
or distribution on account of, the Units) pursuant to the Partnership Agreement
and other securities issued by the Company in exchange for the Shares and (ii)
any securities issued by the Partnership or the Company as a dividend or
distribution on account of Registrable Securities or resulting from a
subdivision of outstanding Registrable Securities into a greater number of
securities (by reclassification, stock split or otherwise).
SECTION 1.2. Restrictions on Sales by Holders. If the Company
is issuing securities to the public in an underwritten offering (a "Company
Offering") and the managing underwriter for such underwriting requests that the
Holders not effect any public sale or distribution of Registrable Securities or
any securities convertible into or exchangeable or exercisable for such
Registrable Securities, then the Holders shall not be permitted to effect any
such public sale or distribution during the 15 calendar day period prior to, and
during the 90 calendar day period subsequent to, the date (an "Execution Date")
specified in the Lock-Out Notice (as defined below) as the anticipated date of
the execution and delivery of the underwriting agreement (or, if later, a
pricing or terms agreement signed pursuant to such underwriting agreement) to be
entered into in connection with the Company Offering. The Execution Date shall
be no fewer than 21 calendar days subsequent to the date of delivery of written
notice (a "Lock-Out Notice") by the Company to each Holder of the anticipated
execution of an underwriting agreement (or pricing or terms agreement), and the
Execution Date shall be specified in the Lock-Out Notice. The Company may not
deliver a Lock-Out Notice unless it is making a good faith effort to effect the
Company Offering. The Company may not establish Lock-Out Periods for an
aggregate period for more than 120 days during any 12-month period. Any Lock-Out
Period may be shortened at the Company's sole discretion by written notice to
the Holders, and the applicable Lock-Out Period shall be deemed to have ended on
the date such notice is received by the Holders. A Lock-Out Period shall be
deemed to not have occurred, and a Lock-Out Notice shall be deemed not to have
been delivered, if prior to the Execution Date specified above, the Company
delivers a written notice (the "Revocation Notice") to the Holders stating that
the Company Offering (the "Aborted Offering") with respect to which such
Lock-Out Notice had been delivered, has not been, or shall not be, consummated.
ARTICLE II.
Registration Procedures
SECTION 2.1. Registration Procedures. During the time period
that the Registration Statement is required to be current, effective and
available under Section 1.1 above, the Company shall, at its expense, use its
reasonable efforts to:
(a) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus constituting a part
thereof, as amended or supplemented (the "Prospectus"), as may be necessary to
keep the Registration Statement effective and to comply with the provisions of
the 1933 Act with respect to resales of Registrable Securities in accordance
with the intended method or methods of distribution by the Selling
D-13
138
Holders
(other than an underwritten offering) whenever a Selling Holder shall desire to
sell or otherwise dispose of the same, or any portion thereof, but in no event
beyond the period during which the Registration Statement is required to be kept
in effect or the Registrable Securities have been sold, and otherwise subject to
the limitations, under Section 1.1 above;
(b) furnish to each Selling Holder, without charge, such
number of authorized copies of the Prospectus, and any amendments or supplements
to the Prospectus, in conformity with the requirements of the 1933 Act and the
Securities Exchange Act of 1934, as amended, and the regulations promulgated
thereunder (the "1934 Act"), and such other documents as such Selling Holder may
reasonably request in order to facilitate the public sale or other disposition
of the Registrable Securities owned by such Selling Holder, and the Company
hereby consents to the use of the Prospectus, such amendments or supplements and
such other documents in connection with the offering and sale of the Registrable
Securities;
(c) register or qualify the Registrable Securities under state
securities or blue sky laws of such jurisdictions as are reasonably required to
effect a sale thereof and do any and all other acts and things which may be
necessary or appropriate under such state securities or blue sky laws to enable
the Selling Holders to consummate the public sale or other disposition in such
jurisdictions of the Registrable Securities to be sold or otherwise disposed of
by such Selling Holders from time to time;
(d) before filing with the SEC any amendments or supplements
to the Registration Statement or the Prospectus, furnish copies of all such
documents proposed to be filed to the Selling Holders, which shall have five
business days to review and comment thereon; provided, however, that the
information concerning any Holder in such documents (including, without
limitation, the proposed method of distribution by such Holder of such Holder's
Registrable Securities) shall be subject to the approval of such Holder;
(e) notify the Selling Holders promptly (and, if requested by
a Selling Holder, confirm in writing) (i) when the Registration Statement has
become effective and when any post-effective amendments and supplements thereto
become effective, (ii) of any request by the SEC or any state securities
authority for amendments or supplements to the Registration Statement and the
Prospectus or for additional information, (iii) of the issuance by the SEC or
any state securities authority of any stop order suspending the effectiveness of
the Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities or the
initiation of any proceeding for such purpose, and (v) of the happening of any
event during the period the Registration Statement is effective which results in
the Registration Statement, the Prospectus or any document incorporated therein
by reference containing an untrue statement of material fact or omitting to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(f) obtain the withdrawal of any order suspending the
effectiveness of the Registration Statement at the earliest practicable time;
D-14
139
(g) cooperate with the Selling Holders to facilitate the
timely preparation and delivery of certificates evidencing the Registrable
Securities being sold, which certificates shall not bear any restrictive legends
provided the Registrable Securities evidenced thereby have been sold in a manner
permitted by the Prospectus;
(h) upon the occurrence of any event contemplated by Section
2.1(e)(v), promptly prepare and file a supplement or post-effective amendment to
the Registration Statement or the Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities, the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading;
(i) cause the Registrable Securities to be listed on any
securities exchange on which securities of the same class issued by the Company
are then listed; and
(j) make available for inspection by the Selling Holders and
any counsel, accountants or other representatives retained by such Selling
Holders, such financial and other records and pertinent corporate documents of
the Company and cause the officers, directors and employees of the Company to
supply such records, documents or information reasonably requested by such
Selling Holders, counsel, accountants or representatives in connection with the
preparation of the Registration Statement that are reasonably required in order
for such Selling Holders to establish their "due diligence" defense against
liabilities under Section 12(a)(2) of the 1933 Act; provided, however, that such
records, documents or information are confidential and shall not be disclosed by
such Selling Holders, counsel, accountants or representatives unless (i) such
disclosure is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction, or (ii) such records, documents or information become
generally available to the public other than through a breach of the terms
hereof.
SECTION 2.2. Registration Expenses. The Company shall bear all
expenses reasonably relating to filing the Registration Statement and keeping
the Registration Statement current, effective and available during the period
specified above; provided, however, that the Company shall not be responsible
for any brokerage fees or underwriting commissions, if any, incurred by Selling
Holders in connection with the resale of Registrable Securities, the fees and
expenses of any counsel, accountant or other representative or advisor retained
by a Holder in connection with resales of the Registrable Securities or income
or transfer taxes, if any, relating to the sale or disposition of Registrable
Securities.
ARTICLE III.
Indemnification
SECTION 3.1. Indemnification by the Company. (a) The Company
hereby agrees to indemnify and hold harmless each Holder and each person or
entity, if any, which controls a Holder (within the meaning of either Section 15
of the 1933 Act or Section 20 of the 1934 Act), and their respective officers,
directors, members, partners, agents and employees (each such person being
sometimes hereinafter referred to as an "Indemnified Holder"), from and
D-15
140
against
any and all losses, claims, damages, costs and expenses (including reasonable
attorneys' fees) to which such Holder or each such person may become subject
under the 1933 Act or otherwise that arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or by reason of any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and shall reimburse each Indemnified Holder for any legal or other
expenses reasonably incurred by such Indemnified Holder in connection with
investigating, preparing or defending against any such loss, claim or damages as
such expenses are incurred; provided, however, that the indemnity provided
pursuant to this Section 3.1 shall not apply to any Holder with respect to any
such losses, claims, damages, costs and expenses (including reasonable
attorneys' fees) that arise out of or are based upon any such untrue statement
or omission or alleged untrue statement or omission made in reliance upon
information furnished in writing to the Company by such Holder expressly for use
therein relating to the Holder's status as a selling securities Holder and
provided further that the indemnity provided pursuant to this Section 3.1 shall
not be for the benefit of any third party.
SECTION 3.2. Indemnification by the Holders. Each Holder
selling shares pursuant to the Registration Statement (an "Indemnifying Holder")
severally (and not jointly) agrees to indemnify and hold harmless the Company
and the other Selling Holders, and each of their respective directors and
officers and each person or entity, if any, who controls the Company or any
other Selling Holder (within the meaning of either Section 15 of the Securities
Act or Section 20 of the 0000 Xxx) to the same extent as the foregoing indemnity
from the Company to such Indemnifying Holder, but only insofar as such loss,
claim, damage, cost or expense arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement or any amendment thereto or the Prospectus or any
Amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company by such Selling Holder expressly for use
therein relating to the Selling Holder's status as a selling security holder;
provided that the indemnity provided pursuant to this Section 3.2 shall not be
for the benefit of any third party; and provided further that the maximum
aggregate indemnity by any separate Holder will be capped at the amount of
proceeds derived by such Holder from the sale of Restricted Securities sold
pursuant to the Registration Statement. The indemnifying party shall not settle
any matters without the indemnified party's consent unless the indemnified party
is fully released.
SECTION 3.3. Conduct of Indemnification Proceedings. Each
indemnified party shall give reasonably prompt notice to each indemnifying party
of any action or proceeding commenced against it in respect of which indemnity
may be sought hereunder, but failure to so notify an indemnifying party (i)
shall not relieve it from any liability which it may have under the indemnity
agreement provided in Sections 3.1 or 3.2 above, unless and to the extent it did
not otherwise learn of such action and the lack of notice by the indemnified
party materially prejudices the indemnifying party or results in the forfeiture
by the indemnifying party of substantial rights and defenses and (ii) shall not,
in any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided under
Sections 3.1 or 3.2 above. After receipt of such notice, the indemnifying party
shall be entitled to participate in and, at its option, jointly with any other
indemnifying party so notified,
D-16
141
to assume the defense of such action or
proceeding at such indemnifying party's own expense with counsel chosen by such
indemnifying party; provided, however, that, if the defendants in any such
action or proceeding include both the indemnified party and the indemnifying
party and the indemnified party reasonably determines, upon advice of counsel,
that a conflict of interest exists or that there may be legal defenses available
to it or other indemnified parties that are different from or in addition to
those available to the indemnifying party, then the indemnified party shall be
entitled to one separate counsel, the reasonable fees and expenses of which
shall be paid by the indemnifying party. If the indemnifying party does not
assume the defense of any such action or proceeding, after having received the
notice referred to in the first sentence of this paragraph, the indemnifying
party will pay the reasonable fees and expenses of counsel (which shall be
limited to a single law firm in addition to any local counsel necessary in
connection with such action or proceeding) for the indemnified party. In such
event, the indemnifying party will not be liable for any settlement effected
without the written consent of such indemnifying party. If the indemnifying
party assumes the defense of any such action or proceeding in accordance with
this paragraph, such indemnifying party shall not be liable for any fees and
expenses of counsel for the indemnified party incurred thereafter in connection
with such action or proceeding except as set forth in the proviso in the second
sentence of this Section 3.3.
SECTION 3.4. Contribution. In order to provide for just and
equitable contribution in circumstances in which the indemnity agreement
provided for in this Article III is for any reason held to be unenforceable
although applicable in accordance with its terms, the Company and the Selling
Holders shall contribute to the aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement incurred by
the Company and the Selling Holders, in such proportion as is appropriate to
reflect the relative fault of the Company on the one hand and the Selling
Holders on the other (in such proportions that the Selling Holders are
severally, not jointly, responsible for the balance), in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The relative fault of the indemnifying party and the indemnified parties shall
be determined by reference to, among other things, whether the action in
question, including any untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact, has been made by, or
relates to information supplied by, such indemnifying party or the indemnified
parties, and the parties' relative intent, access to information and opportunity
to correct or prevent such action.
(a) The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 3.4 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in Section 3.4(a). Notwithstanding
the provisions of this Section 3.4, no selling Holder shall be required to
contribute any amount in excess of the amount by which the total price at which
the Registrable Securities of such Selling Holder were offered to the public
exceeds the amount of any damages which such Selling Holder would otherwise have
been required to pay by reason of such untrue statement or omission.
(b) Notwithstanding the foregoing, no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. For
D-17
142
purposes of this Section 3.4, each
Person, if any, who controls a Holder within the meaning of either Section 15 of
the 1933 Act or Section 20 of the Exchange Act and directors and officers of a
Holder shall have the same rights to contribution as such Holder, and each
director of the Company, each officer of the Company who signed the Registration
Statement and each Person, if any, who controls the Company within the meaning
of either Section 15 of the 1933 Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company.
ARTICLE IV.
Miscellaneous
SECTION 4.1. Certain Other Obligations of the Company. The
Company covenants that, so long as it is subject to the reporting requirements
of the 1934 Act, it will use its reasonable efforts to file the reports required
to be filed by it under the 1934 Act so as to enable any Holder to sell the
Registrable Securities pursuant to Rule 144 under the 1933 Act.
(a) In connection with any sale, transfer or other disposition
by any Holder of any Registrable Securities pursuant to Rule 144 under the 1933
Act, the Company shall reasonably cooperate with such Holder to facilitate the
timely preparation and delivery of certificates evidencing the Registrable
Securities to be sold and not bearing any 1933 Act legend, and enable
certificates for such Registrable Securities to be for such number of shares and
registered in such names as the selling Holders may reasonably request. The
Company's obligation set forth in the previous sentence shall be subject to the
receipt by the Company or its transfer agent, by counsel to such Holder, in form
and substance reasonably satisfactory to the Company and its transfer agent, of
an opinion from counsel to the Company that such 1933 Act legend need not appear
on such certificate.
SECTION 4.2. Successors and Assigns. The terms hereof shall be
binding upon and inure to the benefit of the parties hereto, the Holders and,
subject to the following sentence, their respective Permitted Transferees and
their respective transferees under the Partnership Agreement who become
Substitute Limited Partners (as defined in the Partnership Agreement). A
transferee of Units and/or Registrable Securities who is a "Permitted
Transferee" (as defined in any Contribution and Exchange Agreement with a
Holder) or becomes a Substitute Limited Partner and who hereafter acquires the
Units and/or Registrable Securities from a Holder in a transaction other than
pursuant to a registration statement under the 1933 Act may become a Holder for
purposes of the terms hereof by (i) taking and holding the record ownership of
such Units and/or Registrable Securities, (ii) notifying the Company in writing
of such transfer and (iii) providing the Company with all information concerning
such Permitted Transferee that is necessary to amend or supplement the
Prospectus, whereupon such Permitted Transferee shall be conclusively deemed to
have agreed to be bound by and entitled to the benefit of all the terms and
provisions hereof.
SECTION 4.3. Amendments and Waivers. The terms hereof,
including the provisions of this sentence, may not be amended, modified,
supplemented or waived, nor may consent to departures therefrom be given,
without the written consent of the Company and the Holders of a majority of the
outstanding Registrable Securities (treating for the purpose of such
D-18
143
computation
the Holders of Units as the Holders of Registrable Securities issuable upon
exchange of such Units); provided, however, that no amendment, modification,
supplement or waiver of, or consent to the departure from, the provisions
hereof, which has the purpose or effect of reducing, impairing or adversely
affecting the right of any Holder, shall be effective as against any Holder of
Registrable Securities unless consented to in writing by such Holder (except
that only the written consent of more than 50% of the Holders of the outstanding
Registrable Securities (treating for the purpose of such computation the Holders
of Units as the Holders of Registrable Securities issuable upon exchange of such
Units shall be required to amend the terms of Sections 1.2 and the proviso to
Section 2.1(a). Notice of any such amendment, modification, supplement, waiver
or consent adopted in accordance with this Section 4.3 shall be provided by the
Company to each Holder of Registrable Securities at least 30 days prior to the
effective date of such amendment, modification, supplement, waiver or consent.
SECTION 4.4. Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery, (i) if to a Holder, at such Holder's registered address
appearing on the share register of the Company or the Unit register of the
Operating Partnership or (ii) if to the Company, at 2030 Xxxxxxxx Place
Boulevard, Suite 500, CBL Center, Chattanooga, Tennessee, 37421-2931, Attention:
Chief Financial Officer.
SECTION 4.5. Specific Performance. The parties hereto agree
that the obligations imposed on them herein are special, unique and of an
extraordinary character, and that in the event of breach by any party damages
would not be an adequate remedy, and each of the other parties shall be entitled
to specific performance and injunctive and other equitable relief in addition to
any other remedy to which it may be entitled, at law or in equity; and the
parties hereto further agree to waive any requirement for the securing or
posting of any bond in connection with the obtaining of any such injunctive or
other equitable relief.
SECTION 4.6. Headings. The headings contained herein are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 4.7. Severability. If any provision hereof (or any
portion thereof) or the application of any such provision (or any portion
thereof) to any person or circumstance shall be held invalid, illegal or
unenforceable in any respect by a court of competent jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof (or the remaining portion thereof) or the application of such provision
to any other persons or circumstance.
SECTION 4.8. Governing Law. The terms hereof shall be governed
by and construed in accordance with the internal laws of the State of New York
applicable to agreements made and to be performed entirely within such State,
without regard to the conflicts of law principles of such State.
D-19
144
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 (but shall be 25,112,854
after the 6/15/05 Stock Split). 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 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
E-1
145
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 SCUs and Common Units. Any distribution payable on the SCUs for the
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 holder 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 SCUs and 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 that by their terms rank 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 Regulation Section 1.707-4, and the provisions of this Exhibit E
shall be construed and applied consistent with such 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
E-2
146
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 be low in Paragraph
4(b), 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 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).
(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 distribution periods and the
then current distribution period or portion thereof, no SCUs shall be 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,
potage 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.
X-0
000
(x) 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 to 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 SCU 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;
(ii) amend, alter or repeal the provisions of this Exhibit E or Section
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
E-4
148
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 prior to the time when the act with respect to which such vote would
otherwise be required shall be effected, all outstanding 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 other wise 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 advise
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 by (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
E-5
149
Series J Exchange
Consideration (as defined below), subject to the limitations 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 outstanding
E-6
150
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 an 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 even in the case of distribution or the effective date in the case of a
subdivision, split, combination or reverse split.
(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 Notice may be delivered to either 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
E-7
151
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.
(f) Notwithstanding the limitation se forth in clause (x) of Paragraph
7(d), in the event that the Company provides notice to the holder of
SCUs, pursuant to the 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 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
E-8
152
(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 se dot acquire the series J Offered Units. Notwithstanding the
foregoing, the Company shall use its reasonable efforts to case 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:
(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.
X-0
000
(xxx) 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
E-10
154
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 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 in 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, 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) an Approved Transfer of SCUs which are
E-11
155
described in clauses (a)-(d)
of 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.
For the purposes of this Paragraph 8, all of the following
Transfers shall be considered Approved Transfers:
(i) 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 holder and designated holding entities are identified on the
Schedule A hereto (each, an "Initial Holder");
(ii) 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;
(iii) 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 any pledge by an initial holder of 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
pledge or any designee thereof or purchaser therefrom following a
default in the obligation secured by such pledge; or
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
E-12
156
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.
Signature on next page
E-13
157
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
Acknowledged and Agreed:
CBL & ASSOCIATES PROPERTIES, INC.
By: /s/ Xxxx X. Xxx
Name: Xxxx X. Xxx
Title: Chief Financial Officer
E-14
158
Schedule A to Terms of Series J Special Common Units
Contributors Designated Holding Entity Number of SCUs
JG Brookfield LLC CB Brookfield Square Mall LLC 1,064,891
CB Brookfield Square Mall LLC N/A 249,789
XX Xxxx Joint Venture CB Xxxx Xxxxx Center LLC 769,234
Xxxx Xxxxx Center Corp. CB Xxxx Xxxxx Center LLC 9,737
JRI (Citadel) CB Citadel Mall LLC 40,564
CB Citadel Mall LLC N/A 13,884
JG Columbia LLC CB Columbia Mall LLC 28,447
JVJ Eastgate Joint Venture CB Eastgate Mall LLC 184,051
XX Xxxxxxxx Joint Venture CB Eastgate Mall LLC 99,111
JVJ Madison Joint Venture XX Xxxxxxx LLC 1,145,284
JRI (Fashion Square) CB Fashion Square Mall LLC 1,127,952
CB Fashion Square Mall LLC N/A 43,095
JRI (Fayette) XX Xxxxxxx Mall LLC 1,169,657
XX Xxxxxxx Mall LLC N/A 26,189
JRI (Xxxxx) XX Xxxxx Mall LLC 649,365
XX Xxxxx Mall LLC N/A 186,692
JG Louisville Ltd. XX Xxxxxxxxx Mall LLC 342,095
XX Xxxxxxxxx Mall LLC N/A 9,499
JRI (Jefferson) XX Xxxxxxxxx Mall LLC 46,377
Paducah Development Company CB Kentucky Oaks Mall LLC 703,828
JVJ Midland Venture LP CB Midland Mall LLC 16,164
JRI (Northwoods) CB Northwoods Mall LLC 540,606
CB Northwoods Mall LLC N/A 126,809
JG Old Hickory Ltd. CB Old Hickory Mall LLC 665,884
CB Old Hickory Mall LLC N/A 35,046
JVJ Beaumont Joint Venture CB Parkdale Mall LLC 000,000
Xxxxxxxx Xxxxxxxxxx Xx. XX Xxxxxxxx Mall LLC 5,947
JVJ Asheboro Joint Venture XX Xxxxxxxx Mall LLC 40,010
XX Xxxxxxxx Mall LLC N/A 615
JRI (Regency) CB Regency Mall LLC 159,197
CB Regency Mall LLC N/A 55,644
JG Middletown Ltd. XX Xxxxx Mall LLC 11,913
XX Xxxxx Mall LLC N/A 627
JRI (Wausau Penney) CB Wausau Penney LLC 12,155
CB Wausau Penney LLC N/A 5,209
JRI (Wausau Center) CB Wausau Center LLC 330,935
CB Wausau Center LLC N/A 141,829
CV Investments N/A 807,118
------------------------------------------------------------------------------------------------------------
Total 11,454,173
E-15
159
EXHIBIT F
Exchange Rights of Common Units
Issued In Exchange For or Upon Redemption of SCUs
1. At any time, subject to the remainder of this Exhibit F, a holder
of Common Units issued in exchange for or upon the redemption of SCU (such
Common Units are referred to herein as "JCUs") shall have the right to exchange
all or any portion of such holder's JCUs (the "JCU Offered Units") for JCU
Exchange Consideration (as defined below), subject to the limitations contained
in Paragraphs 3 and 4 below. Any such JCU 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 "JCU Exchange Notice")
delivered by the holder exercising the JCU Exchange Right (the "JCU Exercising
Holder") to the Company.
2. The exchange consideration (the "JCU Exchange Consideration")
payable by the Company to each JCU Exercising Holder shall be equal to the
product of (x) the Common Stock Amount with respect to the JCU Offered Units
multiplied by (y) the Current Per Share Market Price, each computed as of the
date on which the JCU Exchange Notice was delivered to the Company. The JCU
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 JCU 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 JCU 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).
3. Notwithstanding anything herein to the contrary, any JCU Exchange
Right may only be exercised to the extent that, upon exercise of the JCU
Exchange Right, assuming payment by the Company of the JCU Exchange
Consideration in shares of Common Stock, the JCU 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 JCU
Exchange Right, in excess of the applicable Ownership Limit. If a JCU 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 JCU Exchange Right cannot be exercised in full
as aforesaid, the JCU Exchange Notice shall be deemed to be modified to provide
that the JCU 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 JCU Exchange Notice with respect to the remainder of such
JCU Exchange Right shall be deemed to have been withdrawn.
4. JCU Exchange Rights may be exercised at any time and from time to
time, provided, however, that, except with the prior written consent of the
General Partner, (x) only one (1) JCU Exchange Notices may be delivered to the
Company by all holders of JCUs during any consecutive twelve (12) month period;
and (y) no JCU Exchange Notice may be delivered with respect to JCUs either (i)
having a value of less than $250,000 calculated by multiplying the Common Stock
Amount with respect to such JCUs by the Current Per Share Market Price or (ii)
if a holder does not own JCUs having a value of $250,000 or more, constituting
less than all of the JCUs owned by such holder.
F-1
160
5. Within thirty (30) days after receipt by the Company of any JCU
Exchange Notice delivered in accordance with the requirements of Paragraph 1
hereof, the Company shall deliver to the JCU Exercising Holder a notice (a "JCU
Election Notice"), which JCU Election Notice shall set forth the computation of
the JCU Exchange Consideration and shall specify the form of the JCU Exchange
Consideration (which shall be in accordance with Paragraph 2 hereof), to be paid
by the Company to such JCU Exercising Holder and the date, time and location for
completion of the purchase and sale of the JCU Offered Units, which date shall,
to the extent required, in no event be more than (A) in the case of JCU Offered
Units with respect to which the Company has elected to pay the JCU Exchange
Consideration by issuance of shares of Common Stock, ten (10) days after the
delivery by the Company of the JCU Election Notice for the JCU Offered Units or
(B) in the case of JCU Offered Units with respect to which the Company has
elected to pay the JCU Exchange Consideration in cash, sixty (60) days after the
initial date of receipt by the Company of the JCU Exchange Notice for such JCU
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 JCU Offered Units. Notwithstanding the
foregoing, the Company agrees to use its reasonable efforts to cause the closing
of the exchange hereunder to occur as quickly as possible. If the Company has
delivered a JCU Election Notice to the JCU Exercising Holder with respect to a
JCU Exchange Notice, the JCU Exchange Notice may not be withdrawn or modified by
the JCU Exercising Holder without the consent of the General Partner. Similarly,
if the Company delivers a JCU Election Notice to a JCU Exercising Holder, the
Company may not modify the JCU Election Notice without the consent of the JCU
Exercising Holder.
6. Notwithstanding the limitation set forth in clause (x) of Paragraph
4, in the event that the Company provides notice to the holders of JCUs,
pursuant to Paragraph 8(v) hereof, the JCU Exchange Rights shall be exercisable
by each holder of JCUs at any time 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 8(v) hereof). In the event that a JCU Exercising Holder delivers to
the Company a JCU Exchange Notice pursuant to this Paragraph 6, the Company
shall be required to deliver a JCU Election Notice before the earlier of (l) the
tenth (10th) Business Day after the Company receives the JCU 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 JCU Election
Notice shall, among other things, set the date for the purchase and sale of the
JCU Offered Units, which date shall, to the extent required, in no event be more
than (A) in the case of JCU Offered Units with respect to which the Company has
elected to pay the JCU 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 ease JCU
Offered Units with respect to which the Company has elected to pay the JCU
Exchange Consideration in cash, sixty (60) days after the initial date of
receipt by the Company of the JCU Exchange Notice for such JCU 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 JCU 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.
F-2
161
7. At the closing of the purchase and sale of JCU Offered Units,
payment of the JCU Exchange Consideration shall be accompanied by proper
instruments of transfer and assignment and by the delivery of (i)
representations and warranties of (A) the JCU Exercising Holder with respect to
(x) its due authority to sell all of the right, title and interest in and to
such JCU Offered Units to the Company, (y) the status of the JCU Offered Units
being sold, free and clear of all Liens and (z) its intent to acquire the Common
Stock for investment purposes and not for distribution, and (B) the Company with
respect to due authority for the purchase of such JCU Offered Units, and (ii) to
the extent that any shares of Common Stock are issued in payment of the JCU
Exchange Consideration or any portion thereof, (A) an opinion of counsel for the
Company reasonably satisfactory to the JCU Exercising Holder, to the effect that
(I) such shares of Common Stock have been duly authorized, are validly issued,
fully-paid and non- assessable and (II) 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 JCU 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.
8. 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 JCUs, as follows:
(i) At all times during the pendency of the JCU 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 JCU Exchange Consideration in regards to
all JCUs 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 JCUs 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 JCUs, 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, dated April 30, 1999, as amended from time to time, and any
successor agreement thereof, 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
F-3
162
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 JCUs under
Exhibit F and the Agreement.
(v) The Company shall notify the holders of JCUs 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 the Agreement or requires the approval of
the holders of JCUs or (ii) to require a vote of the holders of JCUs to
a transaction that does not otherwise require such a vote under the
Agreement or (iii) to effect the validity of any transaction if such
notice is not given. Each holder of JCUs, 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 JCU Exchange Rights; provided, however, that a
holder of JCUs 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.
12. All JCU Offered Units tendered to the Company in accordance with the
exercise of JCU Exchange Rights shall be delivered to the Company free and clear
of all Liens and should any Liens exist or arise with respect to such Units, the
Company shall be under no obligation to acquire the same unless, in connection
with such acquisition, the Company has elected to pay such portion of the JCU
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 is expressly authorized to apply such portion of the JCU 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 JCU Offered Units to the Company,
the transferring holder thereof shall assume and pay such transfer tax.
10. Subject to the restrictions of transfer set forth in the Agreement,
the Assignee of any holder of JCUs may exercise the rights of such holder of
JCUs pursuant to this Exhibit F, and such holder of JCUs 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 JCU Exchange Consideration shall
be paid by the Company directly to such Assignee and not to such holder.
F-4
163
11. 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 JCU Exchange Consideration payable thereafter by the Company
pursuant to clauses (B) and (C) of Paragraph 2 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 Company may not become a party to any such transaction unless the
terms thereof are consistent with the foregoing.
12. The provisions of Article XI and Exhibit D of the Agreement shall
not apply to the JCUs.
13. Capitalized terms used herein and not otherwise defined have the meanings
assigned to them in the Agreement.
F-5
164
EXHIBIT G
Xxxxxx Limited Partner Representative
For the following entities:
CB Brookfield Square Mall LLC
CB Xxxx Xxxxx Center LLC
C.V. Investments
CB Citadel Mall LLC
CB Columbia Mall LLC
CB Eastgate Mall LLC
XX Xxxxxxx Mall LLC
CB Fashion Square Mall LLC
XX Xxxxxxx Mall LLC
XX Xxxxx Mall LLC
XX Xxxxxxxxx Mall LLC
CB Kentucky Oaks Mall LLC
CB Midland Mall LLC
CB Northwoods Mall LLC
CB Old Hickory Mall LLC
CB Parkdale Mall LLC
XX Xxxxxxxx Mall LLC
CB Regency Mall LLC
XX Xxxxx Mall LLC
CB Wausau Center LLC
CB Wausau Penney LLC
G-1
165
EXHIBIT H
TERMS
OF
SERIES S 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 July 28,
2004, 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 S Special Common Units" (the "S-SCUs") and the number of
units constituting such series shall initially be 960,307 (but shall be
1,920,614 after the 6/15/05 Stock Split). The Operating Partnership may not
issue any additional S-SCUs unless [(i) the issuance is required to deliver
additional consideration as required by the terms of the Contribution and
Exchange Agreement, dated as of May 21, 2004, among Xxxxxx Xxxxxx, Xxxx Xxxxxx
Leeds, Xxxxxx Xxxxxxx, Pittsburgh Mall Limited Partnership and Monroeville
Mall Partners, L.P., as the same may be further amended, supplemented or
modified (the "Contribution Agreement") or (ii) it has obtained the prior
written consent of the holders of record of a majority of the outstanding
S-SCUs ("Majority Holders"). The rights and obligations of the S-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
H.
H-1
166
2. Distribution Rights. (a) Holders of S-SCUs shall be
entitled to receive, when, as and if declared by the General Partner
distributions with respect to the S-SCUs in the manner and to the fullest
extent set forth in the Partnership Agreement.
(b) Distributions with respect to the S-SCUs shall be payable
on the dates designated by the General Partner for the payment of
distributions to the holders of SCUs and Common Units. Any distribution
payable on the S-SCUs for the quarter in which the S-SCUs are first issued
will be prorated and computed on the basis of a 360-day year consisting of
twelve 30-day months. Distributions will be payable to holders of record of
the S-SCUs 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 SCUs and Common Units.
(c) At such time, if any, as there is any distribution
shortfall with respect to the S-SCUs as described in Section 6.2(b)(i) 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 that by their terms rank junior as to distributions to the
rights of the S-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 S-SCUs as to distributions).
(d) Distributions with respect to the S-SCUs are intended to
qualify as permitted distributions of cash that are not treated as a disguised
sale within the meaning of Regulation Section 1.707-4, and the provisions of
this Exhibit H shall be construed and applied consistent with such
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 S-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 with respect
to the S-SCUs described in Section 6.2(b)(i) of the Partnership Agreement,
before any distribution or payment shall be made to holders of Common Units or
any other series of Partnership Units ranking junior to the S-SCUs or SCUs as
to liquidation rights. 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 S-SCUs and
SCUs, then the holders of the S-SCUs and the SCUs shall share ratably in any
such distribution of assets, based on the number of S-SCUs or SCUs held by
each such holder. Holders of S-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 S-SCUs shall have been paid
in cash, the S-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.
H-2
167
4. Optional Redemption. (a) At any time after the Operating
Partnership shall have achieved the Distribution Benchmark, the Operating
Partnership, at its option upon not less than thirty (30) nor more than sixty
(60) days' written notice, may redeem the S-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
S-SCUs. Such redemption shall be made by (i) paying in cash to the holders of
S-SCUs with respect to their S-SCUs being redeemed, any distribution shortfall
with respect to the S-SCUs described in Section 6.2(b)(i) 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. If fewer than all of the outstanding S-SCUs are to be
redeemed, the S-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
S-SCUs to be redeemed shall surrender the certificates evidencing such S-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. From and after the redemption date distributions shall cease to be
payable with respect to such S-SCUs, such S-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). For purposes hereof, the term
"Distribution Benchmark" shall mean when the quarterly distributions paid over
a period of twelve (12) consecutive quarters pursuant to Sections 6.2(b)(ii)
and (iii) of the Partnership Agreement per S-SCU then outstanding shall have
equaled or exceeded 130% of the S-SCU Basic Distribution Amount.
(b) Notwithstanding the provisions of Paragraph 4(a) above,
unless full cumulative distributions on all S-SCUs shall have been or
contemporaneously are paid in cash or a sum sufficient for the payment thereof
in cash set apart for payment for all past distribution periods and the then
current distribution period or portion thereof, no S-SCUs shall be redeemed
unless all outstanding units of S-SCUs are simultaneously redeemed.
(c) Notice of redemption pursuant to Paragraph 4(a) above
shall be mailed by the Operating Partnership by registered mail, return
receipt requested, 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 S-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 S-SCUs. Each notice shall state (i) the
redemption date; (ii) the total number of S-SCUs to be redeemed and the number
of S-SCUs held by such holder to be redeemed; (iii) the Common Unit Amount;
(iv) the place or places where S-SCUs are to be surrendered for payment of the
distribution shortfall with respect to the S-SCUs described in Section
6.2(b)(i) 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 S-SCUs to be redeemed shall cease to be payable on such
redemption date.
(d) All S-SCUs redeemed pursuant to this Paragraph 4 shall be
deemed retired and terminated.
H-3
168
(e) The S-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.
(f) As used herein, the term "Common Unit Amount" shall mean,
with respect to any number of S-SCUs, the number of Common Units equal to such
number of S-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 S-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 through the date
hereof 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 S-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, but which
may include any other distribution of Common Units), 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 S-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.
(g) Notwithstanding anything to the contrary in this Section 4,
the redemption date may not be a date prior to the eighth anniversary of the
initial closing under the Contribution Agreement.
5. Put Right.
(a) If an original Holder of S-SCUs shall die on or before the fifth anniversary
of the issuance of the S-SCUs, the successor Holder of such S-SCUs shall have
the option to deliver to the Operating Partnership, within sixty (60) days from
such date of death (the "Put
H-4
169
Period"), a written notice (the "Put Notice") that
requires the Operating Partnership to redeem all or part of such Holder's S-SCUs
for the Put Consideration. The Put Consideration for each S-SCU shall be an
amount, equal to the sum of (x) the product of the Current Per Share Market
Price per share of Common Stock and the Common Stock Amount applicable to such
S-SCU, each computed as of such date of death, plus (y) the lesser of the
Closing Amount or the Redeemable Amount (each as defined below), provided that
in the event that the Redeemable Amount is a number less than $0, the amount of
this clause (x) shall be $0, minus (z) the amount of $3.91 per S-SCU ($1.955 per
S-SCU after the 6/15/05 Stock Split), which amount will be reduced by 5% upon
each date on which payment of a quarterly distribution is made to the holders of
the S-SCUs (prorated for the quarter in which the S-SCUs are first issued and
computed on the basis of a 360-day year consisting of twelve 30-day months). The
Put Consideration shall, at the election of the Operating Partnership, be
payable in any combination of cash or shares of Common Stock, which Common Stock
shall be valued for this purpose at the Current Per Share Market Price as of
such date of death. The Closing Amount shall be the difference between (i)
$78.10 ($39.05 after the 6/15/05 Stock Split), divided by the Conversion Factor,
minus (ii) the Current Per Share Market Price per share of Common Stock as of
the date of issuance of the S-SCUs, but in no case shall such Current Per Share
Market Price per share of Common Stock be an amount less than $56.70 ($28.35
after the 6/15/05 Stock Split). The Redeemable Amount shall be the difference
between (i) $78.10 ($39.05 after the 6/15/05 Stock Split), divided by the
Conversion Factor, minus (ii) the product of the Current Per Share Market Price
per share of Common Stock and the Common Stock Amount applicable to each S-SCU,
each computed as of such date of death. In addition to and in conjunction with
the payment of the Put Consideration, the holders of the S-SCUs shall be
entitled to payment in cash of any distribution shortfall with respect to the
S-SCUs described in Section 6.2(b)(i) of the Partnership Agreement.
Set forth below is an illustration of the calculation of the Put Consideration.
The calculation assumes that the Current Per Share Market Price upon the date of
first issuance of the S-SCUs was $56.70 ($28.35 after the 6/15/05 Stock Split)
and that the Current Per Share Market Price upon the date of death was $70.00
($35.00 after the 6/15/05 Stock Split). The Put Consideration for each S-SCU
shall be calculated as follows:
($70.00 ($35.00 after the 6/15/05 Stock Split) x Common Stock Amount (calculated
as of the date of death) plus (the lesser of the Closing Amount or the
Redeemable Amount (each as calculated below)) minus
($3.91 per S-SCU ($1.955 after the 6/15/05 Stock Split), which amount will be
reduced by 5% upon each date on which payment of a quarterly distribution is
made to the holders of the S-SCUs (prorated for the quarter in which the S-SCUs
are first issued and computed on the basis of a 360-day year consisting of
twelve 30-day months)) equals the Put Consideration.
The Closing Amount shall equal: ($78.10/ the Conversion Factor) - $56.70;
($39.05/ the Conversion Factor) - $28.35 (after the 6/15/05 Stock Split).
H-5
170
The Redeemable Amount shall equal: ($78.10/ the Conversion Factor) - ($70.00 x
Common Stock Amount (calculated as of the date of death); ($39.05/ the
Conversion Factor) - ($35.00 x Common Stock Amount (calculated as of the date of
death) (after the 6/15/05 Stock Split).
(b) A Put Notice in the form annexed hereto as Attachment 1 hereto shall be duly
completed, executed and mailed by registered mail, return receipt requested,
addressed to the Operating Partnership at 2030 Xxxxxxxx Place Boulevard, CBL
Center, Suite 500, Chattanooga, Tennessee 37421-6000 Attention: Chief Executive
Officer. A Put Notice once dispatched may not be withdrawn except with the
written consent of the Operating Partnership. From and after the dispatch of a
Put Notice with respect to any S-SCUs, all distributions shall cease to be
payable with respect to the S-SCUs, the S-SCUs shall no longer be deemed
outstanding and all rights of holders with respect to the S-SCUs shall
terminate, except the right to receive the Put Consideration and any other
payments described in Paragraphs 5(a) or 5(c) at the Put Closing.
(c) Within thirty (30) days of receipt of a Put Notice pursuant to Paragraph
5(b) above, the Operating Partnership shall, by registered mail, return receipt
requested, addressed to the respective holders of record of the S-SCUs at their
respective addresses as they appear on the records of the Operating Partnership,
deliver a notice (a "Put Response Notice") setting forth the date and time (the
"Put Closing Date") on which the S-SCUs are to be surrendered for payment of the
Put Consideration and any other payments described in Paragraph 5(a) above (the
"Put Closing") and setting forth with reasonable specificity (i) the amount and
calculation of such payments to be made, and (ii) the amount of cash or Common
Stock to be used to pay the Put Consideration (the "Put Stock"). The Put Closing
Date shall be a date not more than thirty (30) days from the date of receipt of
the Put Notice if the Operating Partnership shall elect to pay the Put
Consideration entirely in shares of Common Stock, and not more than ninety (90)
days from the receipt of the Put Notice if the Operating Partnership shall elect
to pay the Put Consideration entirely in cash, provided that if payment of the
cash Put Consideration is delayed beyond thirty (30) days from the receipt of
the Put Notice, it will bear interest at the prime rate from such date until
payment.
(d) The Put Closing shall take place at the offices of the Operating Partnership
or at such other location set forth by the Operating Partnership in the Put
Response Notice. At the Put Closing, the holders of the offered S-SCUs shall
surrender the certificates evidencing such S-SCUs, if any, and otherwise execute
such documents reasonably requested by the Operating Partnership to consummate
or evidence such surrender, and the Operating Partnership shall pay the Put
Consideration, including without limitation, through the delivery of stock
certificates or other appropriate means to evidence any Put Stock, together with
any other payments described in Paragraph 5(a) above.
(e) Notwithstanding anything in clause (a) above to the
contrary for purposes of this Section 5, S-SCUs issued by the Operating
Partnership to, and held of record by, an entity that is not an Original Holder
(a "Record Holder") shall nevertheless be deemed held of record by an Original
holder to the extent that such Original Holder shall, at any time (and from time
to time) not less than ninety (90) days prior to such Original Holder's date of
death, have given written notice to the Operating Partnership of the S-SCUs held
of record by such Record Holder of which the Original Holder is the beneficial
owner.
H-6
171
(f) For purposes of this Section 5,
(i) the term "Original Holder" shall mean the persons
identified in Attachment 2 hereof, as of
the date hereof, and the number of S-SCUs beneficially owned by such Original
Holder and the Record Holder thereof (for purposes of clause (e) above) are
identified next to such Original Holder's name; and
(ii) the term "Successor Holder" shall mean the
estate of the deceased Original Holder as well
as any successor beneficial owner (by will or laws of succession) of the S-SCUs
of the deceased Original Holder, provided however, that a Record Holder of
S-SCUs that was deemed an Original Holder under clause (e) above with respect to
such S-SCUs on behalf of such deceased Original Holder shall likewise be deemed
a Successor Holder of such S-SCUs on behalf of such Successor Holder(s) for
purposes of this Section 5.
6. Voting Rights. (a) Holders of the S-SCUs shall have the
voting rights set forth herein and in the Partnership Agreement.
(b) So long as any S-SCUs remain outstanding, the Operating
Partnership shall not, without the affirmative vote or consent of the holders of
two-thirds of the S-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 S-SCU outstanding
prior to the Recapitalization Transaction will (A) remain
outstanding following the consummation of such
Recapitalization Transaction without any amendment to the
rights and obligations of holders of the S-SCUs that is
materially adverse to the holders of S-SCUs (as reasonably
determined by the board of directors of the Company) 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 materially no less favorable
than those of a S-SCU under this Exhibit H and the Partnership
Agreement (as reasonably determined by the board of directors
of the Company), and (y) each holder of S-SCUs shall have the
option to convert its S-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 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;
H-7
172
(ii) amend, alter or repeal the provisions of this
Exhibit H or Section 6.2(b) of the Partnership Agreement, the
provisions of Sections 9.2(a) or 9.2(d) as they apply to
holders of S-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, in a manner materially
adverse to the holders of the S-SCUs (as reasonably determined
by the board of directors of the Company); 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 S-SCUs
disproportionately with respect to the rights of holders of
the Common Units (as reasonably determined by the board of
directors of the Company); it being understood that nothing in
this Exhibit H, 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 S-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 S-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 6 shall
not apply and holders of the S-SCUs shall not be entitled to vote on matters on
account of S-SCUs that have been (i) redeemed by the Operating Partnership, (ii)
exchanged by the holders pursuant to Paragraph 7 hereof, or (iii) the subject of
a Put Closing.
(e) In any matter in which the S-SCUs may vote as a class (as expressly provided
herein or as may be required by law), each S-SCU shall be entitled to one vote.
In any matter in which the S-SCUs may vote with the Common Units and/or SCUs as
a single class, each S-SCU shall be entitled to the number of votes equal to the
number of Common Units issuable upon the exchange of one S-SCU pursuant to
Paragraph 7(b) hereof.
7. Exchange.
(a) At any time following the issuance of the S-SCUs, subject
to the remainder of this Paragraph 7, a holder of S-SCUs shall have the right
(the "Series S Exchange Right") to exchange all or any portion of such
holder's S-SCU's (the "Series S Offered Units") for Exchange Consideration (as
defined below), subject to the limitations contained in Paragraphs 7(c) and
7(d) below. Any such Series S 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 S Exchange Notice")
delivered, at the election of the holder exercising the Series S Exchange
Right (the "Series S Exercising Holder"), to the Company or to the Operating
Partnership, by the Series S Exercising Holder.
H-8
173
(b) The exchange consideration (the "Series S Exchange
Consideration") payable by the Company or the Operating Partnership, as
applicable, to each Series S Exercising Holder shall be equal to the product
of (x) the Common Stock Amount with respect to the Series S Offered Units
multiplied by (y) the Current Per Share Market Price, each computed as of the
date on which the Series S Exchange Notice was delivered to the Company. In
connection with a Series S Exchange Notice delivered to the Company, the
Series S 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 S 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 S 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 S Exchange Notice delivered to the Operating Partnership, the Series S
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 S Exchange Consideration,
concurrently with any exchange pursuant to this Paragraph 7, the Operating
Partnership shall pay the Series S Exercising Holder cash in an amount equal
to any distribution shortfall described in Section 6.2(b)(i) of the
Partnership Agreement with respect to the Series S Offered Units outstanding
on the date of the exchange.
(c) Notwithstanding anything herein to the contrary, any
Series S Exchange Right with respect to the Company may only be exercised to
the extent that, upon exercise of the Series S Exchange Right, assuming
payment by the Company of the Series S Exchange Consideration in shares of
Common Stock, the Series S 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 S Exchange
Right, in excess of the applicable Ownership Limit. If a Series S 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 S Exchange Right cannot be exercised
in full as aforesaid, the Series S Exchange Notice shall be deemed to be
modified to provide that the Series S 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 S Exchange Notice
with respect to the remainder of such Series S Exchange Right shall be deemed
to have been withdrawn.
(d) Series S 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,
(i) except with the prior written consent of the General Partner,
(x) only one (1) Series S Exchange Notice may be delivered to
either the Company or the Operating Partnership by all holders
of S-SCUs during any consecutive twelve (12) month period; and
(y) no Series S Exchange Notice may be delivered with respect
to S-SCUs either (A) having a value of less than $500,000
calculated by multiplying the Common Stock Amount with respect
to such S-SCUs by the Current Per Share Market Price or (B) if
a holder does not
H-9
174
own S-SCUs having a value of $500,000 or
more, constituting less than all of the S-SCUs owned by such
holder, and
(ii) Series S Exchange Rights may only be exercised with respect to
S-SCUs issued at least one year prior to delivery of the
Exchange Notice.
(e) Within thirty (30) days after receipt by the Company or the Operating
Partnership of any Series S 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 S Exercising Holder a notice (a
"Series S Election Notice"), which Series S Election Notice shall set forth the
computation of the Series S Exchange Consideration and, in the case of a Series
S Election Notice delivered by the Company, shall specify the form of the Series
S 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 S Exercising Holder and the date, time and location for
completion of the purchase and sale of the Series S Offered Units, which date
shall, to the extent required, in no event be more than (A) in the case of
Series S Offered Units with respect to which (x) the Operating Partnership is
required to pay the Series S Exchange Consideration by issuance of Common Units
or (y) the Company has elected to pay the Series S 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 S Election
Notice for the Series S Offered Units or (B) in the case of Series S Offered
Units with respect to which the Company has elected to pay the Series S Exchange
Consideration in cash, sixty (60) days after the initial date of receipt by the
Company of the Series S Exchange Notice for such Series S 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 S 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 S Election Notice to the Series S Exercising Holder with
respect to a Series S Exchange Notice, the Series S Exchange Notice may not be
withdrawn or modified by the Series S 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 S Election Notice to a Series S Exercising Holder, the Company
or the Operating Partnership, as applicable, may not modify the Series S
Election Notice without the consent of the Series S Exercising Holder.
(f) At the closing of the purchase and sale of Series S Offered Units,
payment of the Series S 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 S Exercising Holder with
respect to (x) its due authority to sell all of the right, title and interest in
and to such Series S Offered Units to the Company or the Operating Partnership,
as applicable, (y) the status of the Series S 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 S Offered Units, and (ii) to the
extent that any shares of Common Stock or Common Units are issued in payment of
the Series S Exchange
H-10
175
Consideration or any portion thereof, (A) an opinion of
counsel for the Company or the Operating Partnership, as applicable, reasonably
satisfactory to the Series S Exercising, 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 S
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 S
Exercising Holder as a holder of the applicable number of Common Units, as
applicable.
(g) 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 S-SCUs, as follows:
(i) At all times during the pendency of the Series S 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 S Exchange Consideration in regard to
all S-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 S-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 S-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 June 12, 2001) 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 its sole discretion, 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 S-SCUs
H-11
176
under this Exhibit H and the Partnership Agreement (as reasonably
determined by the board of directors of the Company). The provisions
of this clause (iv) of Paragraph 7(g) shall not prohibit the Company
from issuing shares of its Common Stock or other equity securities or
any instrument convertible into any equity security in lieu of a cash
dividend declared by the Company.
(h) 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 S-SCUs, as follows:
(i) At all times during the pendency of the Series S 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 S
Exchange Consideration in regard to all S-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 June 12, 2001) 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 S-SCUs under this Exhibit H and the
Partnership Agreement (as reasonably determined by the board of
directors of the Company). The provisions of this clause (ii) of
Paragraph 7(h) shall not prohibit the Operating Partnership from
making a Distribution of Common Units in Lieu of Cash.
(i) All Series S Offered Units tendered to the Company or to the Operating
Partnership, as applicable, in accordance with the exercise of Series S 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 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 S 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 S 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
H-12
177
payable as a result of the transfer of Series S Offered
Units to the Company, the transferring holder thereof shall assume and pay such
transfer tax.
(j) Subject to the restrictions on transfer set forth in the
Partnership Agreement and in Paragraph 8 hereof, the Assignee
of any holder of S-SCUs may exercise the rights of such holder
of S-SCUs pursuant to this Paragraph 7, and such holder of
S-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 S Exchange Consideration shall be paid by the Company
or the Operating Partnership, as applicable, directly to such
Assignee and not to such holder.
(k) 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 S 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 S Exchange Consideration payable by the Operating
Partnership pursuant to the last sentence of Paragraph 7(b)
shall be adjusted accordingly.
(l) As of the date hereof (i) the Conversion Factor is 1.0 and
(ii) the Common Unit Conversion Factor is 1.0.
(m) The provisions of Article XI, Exhibit D and Exhibit F of the
Partnership Agreement shall not apply to the S-SCUs or to any
Common Units received in exchange for, or upon the conversion
of, any S-SCUs in accordance with the terms of this Exhibit H.
Exhibit I of the Partnership Agreement sets forth the exchange
rights of the Common Units received in exchange for, or upon
the conversion of, S-SCUs in accordance with the terms of this
Exhibit H.
8. Restrictions on Transfer.
(a) 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) an Approved Transfer of
S-SCUs, and (ii) the admission of any transferee of a S-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 S-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 S-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 S-SCUs accruing from and
after the date of transfer, (B) a duly executed and acknowledged instrument by
which the transferee confirms
H-13
178
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.
(b) For the purposes of this Paragraph 8, an "Approved
Transfer" shall mean
(i) any pledge by an initial holder of S-SCUs 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;
or
(ii) any transfer by Monroeville Mall Partners, L.P. or its
Affiliate to Xxxxxx Xxxxxx, Xxxx Xxxxxx Leeds, Xxxxxx Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxx Xxxxxx
Xxxxx or Xxxxxx Xxxxxx, or to any trust for their benefit,
provided however, that the aggregate number of holders of
record of S-SCUs shall not, as a result of any such transfers,
exceed eight (8).
9. Acquisition and Demand Redemption.
(a) Holders of outstanding S-SCUs (or OPUs received upon
redemption by the Operating Partnership of such S-SCUs) shall have the right,
subject to and in accordance with the provisions of this Section, to request,
pursuant to an Acquisition Notice, that the Operating Partnership (i)
directly, or through an affiliate, accept by assignment an agreement (the
"Acquisition Agreement") to acquire a Qualifying Property, and (ii) promptly
following the closing of the acquisition of such Qualifying Property pursuant
to the Acquisition Agreement, to distribute it (and all associated assets or
agreements acquired in conjunction with such Qualifying Property) among such
Holders in the manner specified in such Acquisition Notice in redemption of
their S-SCUs (or OPUs, as applicable) having an aggregate value equal to the
Acquisition Price (the "Redemption S-SCUs").
(b) An Acquisition Notice shall be in the form set forth in
Attachment 2 hereto and may only be given (i) during the period commencing on
the second anniversary and terminating on the third anniversary of the Closing
under the Contribution Agreement, or (ii) at any time after the seventh
anniversary of the Closing under the Contribution Agreement. One or more
Acquisition Notices may be given during either of such periods, provided that
(1) any Acquisition Notice may only be with respect to a Qualifying Property
having an Acquisition Price that does not exceed the value of the S-SCUs (and
OPUs, as applicable) that are then held by such Holders free and clear of any
lien, encumbrance or rights of third parties and that have not been the
subject of a prior Acquisition Notice, unless in conjunction with their
Acquisition Notice, the Holders jointly and severally undertake to contribute
such excess amount to the Operating Partnership on account of their Redemption
S-SCUs (and not as a loan) concurrently with the closing of the acquisition of
the Qualifying Property, (2) no Acquisition Notice may be for an Acquisition
Price less than $5 million, (3) Acquisition Notices given under clause (i) of
the preceding sentence may only be delivered with respect to one or more
Qualifying Properties having in the aggregate an Acquisition Price not to
exceed $40 million, and (4) Acquisition
H-14
179
Notices given under clause (ii) of the
preceding sentence may only be delivered with respect to one or more
Qualifying Properties having in the aggregate an Acquisition Price not to
exceed $20 million unless the Acquisition Notice is given within one year
following receipt of a Protection Period Termination Notice by the Operating
Partnership.
(c) Upon receipt of an Acquisition Notice, the Operating
Partnership shall use its best efforts (except that the Operating Partnership
shall not be required to incur any liability (contingent or otherwise),
expense or loss, including without limitation, any potential liability as an
owner of the Qualifying Property under any environmental law or regulation,
except to the extent expressly provided herein) to acquire (or cause an
affiliate to acquire) the Qualifying Property and distribute it to such
Holders in the manner specified in such Acquisition Notice and in accordance
with the terms of this Section. An Acquisition Notice once dispatched may not
be withdrawn except with the written consent of the Operating Partnership.
From and after the redemption of the Redemption S-SCUs, all distributions
shall cease to be payable with respect to the Redemption S-SCUs, the
Redemption S-SCUs shall no longer be deemed outstanding and all rights of
Holders with respect to the Redemption S-SCUs shall terminate.
(d) A "Qualifying Property" shall be any real estate property
the acquisition and ownership of which, in the opinion of counsel to the
Operating Partnership and the Company, will not (i) jeopardize the status of
the Company as a real estate investment trust under the Code, or (ii) cause
the Operating Partnership or any of its affiliates to incur any liability
(contingent or otherwise), expense or loss, including without limitation, any
potential liability as an owner of the Qualifying Property under any
environmental law or regulation, other than (1) a solely monetary liability,
expense or loss the full amount of which has been included in the Acquisition
Price, or (2) a liability, expense or loss for which the Operating Partnership
has been fully indemnified under terms and by an indemnitor reasonably
satisfactory to the Operating Partnership. A Qualifying Property must,
following its acquisition pursuant to the Acquisition Agreement, be freely
transferable (including, without limitation, under the terms of any
indebtedness encumbering the Qualifying Property) without liability, expense
or loss to the Operating Partnership or its affiliates other than a solely
monetary liability, expense or loss the full amount of which has been included
in the Acquisition Price. The Holders delivering the Acquisition Notice shall
have the right to arrange to finance the purchase of the Qualifying Property
with a loan (an "Acquisition Loan"), the terms of which shall be satisfactory
to such Holders in the exercise of their sole discretion; provided, however,
that in no event shall the Operating Partnership or any of its affiliates be
subject to any personal liability under any of the documents or instruments
evidencing or securing an Acquisition Loan or as a result of an Acquisition
Loan (unless the Operating Partnership shall have been fully indemnified for
such liability under terms and by an indemnitor reasonably satisfactory to the
Operating Partnership). The Operating Partnership shall cooperate with such
Holders to reduce the transfer and recordation taxes and other costs
associated with the conveyance of the Qualifying Property to such Holders in
exchange for the Redemption S-SCUs, and the parties anticipate that the
Operating Partnership may organize a single member limited liability company
to acquire the Qualifying Property and then convey the membership interests in
such limited liability company to the Holders.
(e) An Acquisition Agreement shall be an agreement that (i)
has been duly executed and is fully binding upon the seller and purchaser, and
which purchaser shall include
H-15
180
one or more of such Holders or an affiliate
thereof, (ii) expressly provides for the due assignment of all of purchaser's
rights thereunder to the Operating Partnership or its affiliates, (iii)
imposes no restriction or limitation on the ability of the Operating
Partnership or its affiliates to transfer the Qualifying Property to the
Holders in redemption of their Redemption S-SCUs as contemplated in the
Acquisition Notice, and (iv) does not provide for the closing thereunder to
occur as of the last day of a calendar month.
(f) Following delivery of an Acquisition Notice and until
redemption by the Operating Partnership of the Redemption S-SCUs, the Holders
and their affiliates identified in the Acquisition Notice may not transfer,
encumber or grant any third party rights to or in any of their S-SCUs (and
OPUs, as applicable). The Operating Partnership shall redeem the Redemption
S-SCUs within 15 business days of the closing of the acquisition of the
Qualifying Property. The Holders and the Operating Partnership (and their
affiliates) will execute such additional documents and agreements reasonably
necessary to accomplish the transfer to the Holders of the Qualifying Property
and the redemption of the Redemption S-SCUs. At the closing of the redemption
of the Redemption S-SCUs, the Operating Partnership shall also pay in cash to
the Holders of the Redemption S-SCUs on the date of such closing all
distribution shortfalls for prior periods with respect to such Redemption
S-SCUs described in Section 6.2(b)(i) of the Partnership Agreement.
(g) For purposes of this Section, (i) the "Acquisition Price"
shall be the purchase price and related transaction costs specified by the
Holders in their Acquisition Notice, net of any indebtedness or other
liabilities encumbering or otherwise secured by such property, including any
Acquisition Loan, (ii) for redemptions under Acquisition Notices delivered
pursuant to Section 9(b)(i) above, the value of each Redemption S-SCUs held by
the Holders shall be deemed to be $78.10 ($39.05 after the 6/15/05 Stock
Split), reduced by the amount of $2.35 ($1.175 after the 6/15/05 Stock Split)
per Redemption S-SCU (the "Reduction Amount"), which Reduction Amount shall be
reduced by 5% upon each date on which payment of a quarterly distribution is
made on account of such Redemption S-SCU following the second anniversary of
the Closing under the Contribution Agreement, and (iii) for redemptions under
Acquisition Notices delivered pursuant to Section 9(b)(i) above, the value of
each Redemption S-SCUs held by the Holders shall be deemed to be the product
of the Current Per Share Market Price per share of Common Stock and the Common
Stock Amount applicable to such Redemption S-SCU, computed as of the tenth
business day prior to the Acquisition Notice.
(h) For purposes of this Section, a "Protection Period
Termination Notice" shall mean any notice contractually required to be delivered
by the Operating Partnership to such Holders of the Redemption S-SCUs to the
effect that either (i) a substantial possibility exists that the Operating
Partnership will dispose of the property contributed to the Operating
Partnership in exchange for such Holders' S-SCUs, or (ii) the Operating
Partnership will not offer such Holders "bottom guarantees" after expiration of
any applicable tax protection period provided under such contract.
(i) Solely for purposes of this Section, a Holder of S-SCUs
shall mean a Person issued S-SCUs by the Operating Partnership and any
permitted transferee thereof (including, without limitation, a Substitute
Limited Partner).
X-00
000
00. 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.
11. 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 S-SCUs set forth in
the Partnership Agreement and this Exhibit H 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
S-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 S-SCUs herein set
forth shall be deemed dependent upon any other provision thereof unless so
expressed therein.
12. No Preemptive Rights. No holder of S-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.
[Signature on Next Page]
H-17
182
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 S Special Common Units to be duly executed by its Vice Chairman
of the Board this 28 day of July, 2004.
CBL HOLDINGS I, INC.
By: /s/ Xxxx X. Xxx
Name: Xxxx X. Xxx
Title: Vice Chairman of the Board and
Chief Financial Officer
Acknowledged and Agreed:
CBL & Associates Properties, Inc.
By: /s/ Xxxx X. Xxx
Name: Xxxx X. Xxx
Title: Vice Chairman of the Board and
Chief Financial Officer
H-18
183
Attachment 1 to Exhibit H
Form of Put Notice
To: CBL & Associates Limited Partnership (the "Operating Partnership")
Pursuant to the terms of that certain Third Amended and Restated
Agreement of Limited Partnership of CBL & Associates Limited Partnership, dated
June 15, 2005 and as may be further amended (the "Partnership Agreement"), the
undersigned, as a Successor Holder (as defined in the Partnership Agreement),
does hereby provide this written notice to the Operating Partnership. The
undersigned does hereby state as follows:
1. The undersigned is a Successor Holder as defined in the Partnership Agreement
and, as of the date hereof, holds _________ S-SCUs (as defined in the
Partnership Agreement).
2. The Original Holder of the S-SCUs held by the undersigned was __________.
3. The date of death of the Original Holder was _________.
4. The undersigned hereby exercises the Put Rights set forth in Section 5(a) of
Exhibit H to the Partnership Agreement and shall require the Operating
Partnership to redeem _______ of the S-SCUs referenced above for the Put
Consideration, as defined in Exhibit H to the Partnership Agreement.
This Put Notice is dated _________.
Signed: ______________________________
Successor Holder
X-00
000
Xxxxxxxxxx 2 to Exhibit H
Record Holder Original Holder Percentage Number of S-SCU's
--------------- --------------- ---------- -----------------
1. Monroeville Mall Partners, L.P. 767667
------
Xxx Xxxxxx 29.8019% 228,779
Xxxxxx Xxxxxxx 6.3529% 48,769
Xxxxxxx Xxxxxx 23.0832% 177,202
Xxxxxx Xxxxxx 2.2989% 17,648
Xxxxxxxxx Xxxxxx 23.0832% 177,202
Xxxx Xxxxxx 2.1847% 16,771
Booke Xxxxxx Xxxxx 2.1671% 16,636
Xxxx Xxxxxx Leeds 7.4137% 56,913
Xxx Xxxxxxxx 1.0936% 8,395
Xxx Xxxxxxxx 1.0936% 8,395
Xxxxxx Xxxxxxxx 1.0936% 8,395
Xxx Xxxxxxx 0.3336% 2,561
-----
100.0000% 767667
2. Xxxxxxxxxxx Xxxx XXX'x XX 00000
-----
Xxx Xxxxxx 60.4000% 7734
Xxxxxx Xxxxxxx 5.4000% 691
Xxxx Xxxxxx Leeds 31.0000% 3969
Xxxxxxx Xxxxxx 0.6400% 82
Xxxxxx Xxxxxx 0.6400% 82
Xxxxxxxxx Xxxxxx 0.6400% 82
Xxxx Xxxxxx 0.6400% 82
Booke Xxxxxx Xxxxx 0.6400% 82
--
100.0000% 12804
I-19
185
EXHIBIT I
Exchange Rights of Common Units
Issued In Exchange For or Upon Redemption of S-SCUs
1. At any time, subject to the remainder of this Exhibit I, a
holder of Common Units issued in exchange for or upon the redemption of S-SCUs
(such Common Units are referred to herein as "MCUs") shall have the right to
exchange all or any portion of such holder's MCUs (the "MCU Offered Units")
for MCU Exchange Consideration (as defined below), subject to the limitations
contained in Paragraphs 3 and 4 below. Any such MCU 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 "MCU
Exchange Notice") delivered by the holder exercising the MCU Exchange Right
(the "MCU Exercising Holder") to the Company.
2. The exchange consideration (the "MCU Exchange
Consideration") payable by the Company to each MCU Exercising Holder shall be
equal to the product of (x) the Common Stock Amount with respect to the MCU
Offered Units multiplied by (y) the Current Per Share Market Price, each
computed as of the date on which the MCU Exchange Notice was delivered to the
Company. The MCU 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 MCU
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 MCU 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).
3. Notwithstanding anything herein to the contrary, any MCU
Exchange Right may only be exercised to the extent that, upon exercise of the
MCU Exchange Right, assuming payment by the Company of the MCU Exchange
Consideration in shares of Common Stock, the MCU 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 MCU
Exchange Right, in excess of the applicable Ownership Limit. If a MCU 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 MCU Exchange Right cannot be exercised in
full as aforesaid, the MCU Exchange Notice shall be deemed to be modified to
provide that the MCU 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 MCU Exchange Notice with respect to the
remainder of such MCU Exchange Right shall be deemed to have been withdrawn.
4. MCU Exchange Rights may be exercised at any time and from
time to time, provided, however, that, except with the prior written consent
of the General Partner, (x) only one (1) MCU Exchange Notices may be delivered
to the Company by all holders of MCUs during any consecutive twelve (12) month
period; and (y) no MCU Exchange Notice may be delivered with respect to MCUs
either (i) having a value of less than $250,000 calculated by multiplying the
Common Stock Amount with respect to such MCUs by the
I-1
186
Current Per Share Market
Price or (ii) if a holder does not own MCUs having a value of $250,000 or
more, constituting less than all of the MCUs owned by such holder.
5. Within thirty (30) days after receipt by the Company of any MCU Exchange
Notice delivered in accordance with the requirements of Paragraph 1 hereof, the
Company shall deliver to the MCU Exercising Holder a notice (a "MCU Election
Notice"), which MCU Election Notice shall set forth the computation of the MCU
Exchange Consideration and shall specify the form of the MCU Exchange
Consideration (which shall be in accordance with Paragraph 2 hereof), to be paid
by the Company to such MCU Exercising Holder and the date, time and location for
completion of the purchase and sale of the MCU Offered Units, which date shall,
to the extent required, in no event be more than (A) in the case of MCU Offered
Units with respect to which the Company has elected to pay the MCU Exchange
Consideration by issuance of shares of Common Stock, ten (10) days after the
delivery by the Company of the MCU Election Notice for the MCU Offered Units or
(B) in the case of MCU Offered Units with respect to which the Company has
elected to pay the MCU Exchange Consideration in cash, sixty (60) days after the
initial date of receipt by the Company of the MCU Exchange Notice for such MCU
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 MCU Offered Units. Notwithstanding the
foregoing, the Company agrees to use its reasonable efforts to cause the closing
of the exchange hereunder to occur as quickly as possible. If the Company has
delivered a MCU Election Notice to the MCU Exercising Holder with respect to a
MCU Exchange Notice, the MCU Exchange Notice may not be withdrawn or modified by
the MCU Exercising Holder (except to the extent of any deemed modification
required by Paragraph 3 hereof) without the consent of the General Partner.
Similarly, if the Company delivers a MCU Election Notice to a MCU Exercising
Holder, the Company may not modify the MCU Election Notice without the consent
of the MCU Exercising Holder.
6. At the closing of the purchase and sale of MCU Offered Units, payment of
the MCU Exchange Consideration shall be accompanied by proper instruments of
transfer and assignment and by the delivery of (i) representations and
warranties of (A) the MCU Exercising Holder with respect to (x) its due
authority to sell all of the right, title and interest in and to such MCU
Offered Units to the Company, (y) the status of the MCU Offered Units being
sold, free and clear of all Liens and (z) its intent to acquire the Common Stock
for investment purposes and not for distribution, and (B) the Company with
respect to due authority for the purchase of such MCU Offered Units, and (ii) to
the extent that any shares of Common Stock are issued in payment of the MCU
Exchange Consideration or any portion thereof, (A) an opinion of counsel for the
Company reasonably satisfactory to the MCU Exercising Holder, to the effect that
(I) such shares of Common Stock have been duly authorized, are validly issued,
fully-paid and non-assessable and (II) 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 MCU 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.
I-2
187
7. 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 MCUs, as follows:
(a) At all times during the pendency of the MCU 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 MCU Exchange Consideration in regard to
all MCUs which are from time to time outstanding.
(b) 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 MCUs 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.
(c) Each holder of MCUs, 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.
(d) Other than as contemplated under the terms of the Rights
Agreement, dated April 30, 1999, as amended from time to time, and any
successor agreement thereof, 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 MCUs under
this Exhibit I and the Agreement. The provisions of this clause (iv) of
Paragraph 7 shall not prohibit the Company from issuing shares of its
Common Stock or other equity securities or any instrument convertible
into any equity security in lieu of a cash dividend declared by the
Company, provided, however, that the shares being issued are valued for
this purpose at no less than the Current Per Share Market Price.
8. All MCU Offered Units tendered to the Company in accordance with the
exercise of MCU Exchange Rights shall be delivered to the Company free and clear
of all Liens and should any Liens exist or arise with respect to such Units, the
Company shall be under no obligation to acquire the same unless, in connection
with such acquisition, the Company has elected to pay such portion of the MCU
Exchange Consideration in the form of cash consideration in circumstances where
such consideration will be sufficient to cause such existing
I-3
Lien to be
discharged in full upon application of all or a part of such consideration, and
the Company is expressly authorized to apply such portion of the MCU 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 MCU Offered Units to the Company,
the transferring holder thereof shall assume and pay such transfer tax.
9. Subject to the restrictions of transfer set forth in the Agreement, the
Assignee of any holder of MCUs may exercise the rights of such holder of MCUs
pursuant to this Exhibit I, and such holder of MCUs 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 MCU Exchange Consideration shall
be paid by the Company directly to such Assignee and not to such holder.
10. 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 MCU Exchange Consideration payable thereafter by the Company
pursuant to clauses (B) and (C) of Paragraph 2 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.
11. The provisions of Article XI and Exhibit D or Exhibit F of the
Agreement shall not apply to the MCUs.
12. Capitalized terms used herein and not otherwise defined have the
meanings assigned to them in the Agreement.
[Signature on Next Page]
I-4
188
IN WITNESS WHEREOF, CBL & Associates Properties, Inc. has
caused this Exchange Rights of Common Units Issued in Exchange For or Upon
Redemption of S-SCUs to be duly executed this 28 day of July, 2004.
CBL & ASSOCIATES PROPERTIES, INC.
By: /s/ Xxxx X. Xxx
Name: Xxxx X. Xxx
Title: Vice Chairman of the Board and
Chief Financial Officer
Acknowledged and Agreed:
CBL & ASSOCIATES LIMITED PARTNERSHIP
By: CBL Holdings I, Inc.,
solely in its capacity as general partner
By: /s/ Xxxx X. Xxx
Name: Xxxx X. Xxx
Title: Vice Chairman of the Board and
Chief Financial Officer
I-5
189
EXHIBIT J
TERMS
OF
SERIES L 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 June 1,
2005, 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.)
WHEREAS, the Company (as defined in the Partnership Agreement)
has declared a stock dividend of one share of Common Stock for each outstanding
share of Common Stock and has set the record date for such stock dividend as
June 1, 2005 and a payment date of June 15, 2005 (the "6/15/05 Stock Split").
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 units, as follows:
1. Designation and Amount.
The units of such series shall be designated "Series L Special
Common Units" (the "L-SCUs") and the number of units constituting such series
shall initially be 285,850 (and shall be 571,700 after the 6/15/05 Stock Split).
The rights and obligations of the L-SCUs shall be as set forth herein (to the
extent not inconsistent with the Partnership Agreement) and in the Partnership
Agreement. The Operating Partnership may not issue any additional L-SCUs unless
(i) the issuance is required to deliver additional consideration as required by
the terms of the Contribution Agreement, dated as of March 18, 2005, among
Newburgh/Six Mile Limited Partnership, Xxxxxxxx Xxxxxx Park Retail Holding LLC
and the Operating Partnership (the "Contribution Agreement") or (ii) it has
obtained the prior written consent of the holders of record of a majority of the
outstanding L-SCUs ("Majority Holders"). Nothing in the foregoing shall be
deemed to limit the right and power of the General Partner to cause the
Operating
J-1
190
Partnership to designate and issue additional L-SCUs, designate and
issues other series of units, and/or designate and issue other securities to the
fullest extent permitted under the terms of the Partnership Agreement and this
Exhibit J.
2. Distribution Rights.
(a) Holders of L-SCUs shall be entitled to receive
distributions with respect to the L-SCUs in the manner and to the fullest extent
set forth in the Partnership Agreement.
(b) L-SCU Basic Distribution Amount. Until the earlier to
occur of (i) June 1, 2020 or (ii) the date upon which the L-SCU Threshold is
met, holders of the L-SCUs shall be entitled to receive distributions equal to
the L-SCU Basic Distribution Amount as provided in Section 6.2(c)(ii) of the
Partnership Agreement. The foregoing amounts shall be adjusted to reflect any
splits, reverse splits, distributions of Common Units or similar adjustments to
the amount of the Operating Partnership's outstanding Common Units.
(c) Additional Distributions. Until the earlier to occur of
(i) June 1, 2020 or (ii) the date upon which the L-SCU Threshold is met, Holders
of L-SCUs shall be entitled to receive additional quarterly distributions with
respect to the L-SCUs in the event that the quarterly distributions to the
holders of Common Units exceed the L-SCU Basic Distribution Amount on a per unit
basis with such additional distribution to the holders of L-SCUs to be in the
amount of such excess (the "Additional Distributions") and such Additional
Distribution shall be payable in the same manner as distributions are made to
holders of Common Units.
(d) Distribution Procedures. Distributions with respect to the
L-SCUs shall be payable quarterly on the dates designated by the General Partner
for the payment of distributions to the holders of Common Units. Any
distribution payable on the L-SCUs for the quarter in which the L-SCUs are first
issued will be prorated and computed on the basis of a 360-day year consisting
of twelve 30-day months. Distributions will be payable to holders of record of
the L-SCUs 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.
(e) L-SCU Distribution Threshold and Conversion to
Distribution Rights of Common Units. At the earlier to occur of (i) such time as
the holders of Common Units have received distributions that have equaled or
exceeded the L-SCU Basic Distribution Amount payable to holders of L-SCUs for
each of four consecutive calendar quarters (the "L-SCU Threshold"); or (ii) June
1, 2020, then the distribution rights of holders of all L-SCUs shall be
converted to the distribution rights of holders of Common Units and there shall
be no further distinction between the distribution rights attributable to L-SCUs
and the distribution rights attributable to Common Units. Specifically and by
way of clarification, upon the occurrence of the events set forth in this
Paragraph 2(e), there shall be no further priority distributions paid or payable
to the holders of L-SCUs pursuant to Section 6.2(c) of the Partnership Agreement
and each holder of L-SCUs shall automatically thereupon be deemed to hold the
distribution rights attributable to Common Units in the same per unit amount as
such holder holds L-SCUs. Following a conversion of distribution rights, all
other rights attributable to L-SCUs shall remain as stated in this Exhibit J.
J-2
191
(f) At such time, if any, as there is any distribution
shortfall as described in Section 6.2(c)(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 L-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 L-SCUs as to
distributions).
(g) Distributions with respect to the L-SCUs are intended to
qualify as permitted distributions of cash that are not treated as a disguised
sale within the meaning of Regulation Section 1.707-4 and the provisions of this
Exhibit J shall be construed and applied consistent with such Regulations.
3. Rights of L-SCU Holders.
(a) So long as any L-SCUs remain outstanding, the Operating
Partnership shall not, without the affirmative vote or consent of the holders of
two-thirds of the L-SCUs outstanding at the time, given in person or by proxy,
either in writing or at a meeting (such series voting as a class):
(i) undertake, consent to, or otherwise participate
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 herein referred to as a "Recapitalization Transaction") unless
in connection with such Recapitalization Transaction, (x) either each L-SCU
outstanding prior to the Recapitalization Transaction will (A) remain
outstanding following the consummation of such Recapitalization Transaction
without any amendment to the rights and obligation of the holders of the L-SCUs
that is materially adverse to the holders of L-SCUs (as reasonably determined by
the board of directors of the Company) 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 materially no less favorable than those of an
L-SCU holder under this Exhibit J and the Partnership Agreement (as reasonably
determined by the board of directors of the Company), and (y) each holder of
L-SCUs shall have the option to convert its L-SCUs into the amount and type of
consideration and/or securities receivable by a holder of the same number of
Common Units as such holder of L-SCUs;
(ii) amend, alter or repeal the provisions of this
Exhibit J or Section 6.2(b) of the
Partnership Agreement, the provisions of Sections 9.2(a) or 9.2(d) as they apply
to holders of L-SCUs or the provisions of Section 9.2(c), in each case whether
by merger, consolidation or otherwise, in a manner adverse to the holders of the
L-SCUs (as reasonably determined by the board of directors of the Company); or
J-3
192
(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 L-SCUs
disproportionately with respect to the rights of the holders of the Common Units
(as reasonably determined by the board of directors of the Company); it being
understood that nothing in this Exhibit J 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 L-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.
(b) Unless specifically set forth in this Exhibit J, holders
of L-SCUs shall have each and every right, privilege and entitlement as holders
of Common Units, including but not limited to voting rights, i.e., each holder
of one L-SCU shall have the same voting rights as a holder of one Common Unit
and the holders of the L-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. Unless specifically set forth in this Exhibit J or
in the Partnership Agreement, holders of L-SCUs do not have rights that are
superior or that take priority over the rights of holders of Common Units. If
and to the extent the Operating Partnership may issue to all holders of Common
Units additional 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, then
such additional rights shall automatically be issued to all holders of L-SCUs
such that the holders of L-SCUs shall at all times (except as specifically set
forth in this Exhibit J) have the rights, privileges and entitlements of holders
of Common Units. Holders of L-SCUs shall have the rights set forth in that
certain Registration Rights Agreement dated June 1, 2005 between the holders and
the Company (the "Rights Agreement").
4. Exchange.
(a) At any time following the issuance of the L-SCUs, subject
to the remainder of this Paragraph 4, a holder of L-SCUs shall have the right
(the "Series L Exchange Right") to exchange all or any portion of such holder's
L-SCU's (the "Series L Offered Units") for Exchange Consideration (as defined
below), subject to the limitations contained in Paragraphs 4(c) and 4(d) below.
Any such Series L 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 L Exchange Notice") delivered, at
the election of the holder exercising the Series L Exchange Right (the "Series L
Exercising Holder"), to the Company or to the Operating Partnership, by the
Series L Exercising Holder.
(b) The exchange consideration (the "Series L Exchange
Consideration") payable by the Company or the Operating Partnership, as
applicable, to each Series L Exercising Holder shall be equal to the product of
(x) the Common Stock Amount with respect to the Series L Offered Units
multiplied by (y) the Current Per Share Market Price, each computed as of the
date on which the Series L Exchange Notice was delivered to the Company. In
connection with a Series L Exchange Notice delivered to the Company, the Series
L 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 L 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 L
J-4
193
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 addition to the Series L Exchange
Consideration, concurrently with any exchange pursuant to this Paragraph 4, the
Operating Partnership shall pay the Series L Exercising Holder cash in an amount
equal to any distribution shortfall described in Section 6.2(b)(i) of the
Partnership Agreement with respect to the Series L Offered Units outstanding on
the date of the Exchange.
(c) Notwithstanding anything herein to the contrary, any
Series L Exchange Right with respect to the Company may only be exercised to the
extent that, upon exercise of the Series L Exchange Right, assuming payment by
the Company of the Series L Exchange Consideration in shares of Common Stock,
the Series L 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 L Exchange Right, in excess of the
applicable Ownership Limit. If a Series L 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 L Exchange Right cannot be exercised in full as aforesaid, the Series L
Exchange Notice shall be deemed to be modified to provide that the Series L
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 L Exchange Notice with respect to the remainder of such
Series L Exchange Right shall be deemed to have been withdrawn.
(d) Series L Exchange Rights may be exercised at any time
after the date set forth in Paragraph 4(a) above and from time to time,
provided, however, that, except with the prior written consent of the General
Partner, (x) only one (1) Series L Exchange Notice may be delivered to either
the Company or the Operating Partnership by all holders of L-SCUs during any
consecutive twelve (12) month period; and (y) no Series L Exchange Notice may be
delivered with respect to L-SCUs either (A) having a value of less than
$3,000,000 calculated by multiplying the Common Stock Amount with respect to
such L-SCUs by the Current Per Share Market Price or (B) if the holders of all
of the then-outstanding L-SCUs do not own L-SCUs having a value of $3,000,000 or
more as calculated in (A) above, constituting less than all of the L-SCUs owned
by such holders as a group.
(e) Within thirty (30) days after receipt by the Company or
the Operating Partnership of any Series L Exchange Notice delivered in
accordance with the requirements of Paragraph 4(a) hereof, the Company or the
Operating Partnership, as applicable, shall deliver to the Series L Exercising
Holder a notice (a "Series L Election Notice"), which Series L Election Notice
shall set forth the computation of the Series L Exchange Consideration and, in
the case of a Series L Election Notice delivered by the Company, shall specify
the form of the Series L Exchange Consideration (which shall be in accordance
with Paragraph 4(b) hereof), to be paid by the Company or the Operating
Partnership, as applicable to such Series L Exercising Holder and the date, time
and location for completion of the purchase and sale of the Series L Offered
Units, which date shall, to the extent required, in no event be more than (A) in
the case of Series L Offered Units with respect to which the Company has elected
to pay the Series L Exchange
J-5
194
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 L Election Notice for the Series L
Offered Units or (B) in the case of Series L Offered Units with respect to which
the Company has elected to pay the Series L Exchange Consideration in cash,
sixty (60) days after the initial date of receipt by the Company of the Series L
Exchange Notice for such Series L 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 L
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 L Election Notice
to the Series L Exercising Holder with respect to a Series L Exchange Notice,
the Series L Exchange Notice may not be withdrawn or modified by the Series L
Exercising Holder (except to the extent of any deemed modification required by
Section 4(c) above) without the consent of the General Partner. Similarly, if
the Company or the Operating Partnership delivers a Series L Election Notice to
a Series L Exercising Holder, the Company or the Operating Partnership, as
applicable, may not modify the Series L Election Notice without the consent of
the Series L Exercising Holder.
(f) At the closing of the purchase and sale of Series L
Offered Units, payment of the Series L 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 L Exercising Holder with
respect to (x) the Series L Exercising Holder's due authority to sell all of the
right, title and interest in and to such Series L Offered Units to the Company
or the Operating Partnership, as applicable, (y) the status of the Series L
Offered Units being sold, free and clear of all Liens and (z) the Series L
Exercising Holder's intent to acquire the Common Stock for investment purposes
and not for distribution, and (B) the Company or the Operating Partnership, as
applicable, with respect to due authority of the Company or the Operating
Partnership, as applicable, for the purchase of such Series L Offered Units, and
(ii) to the extent that any shares of Common Stock are issued in payment of the
Series L 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 L Exercising, to the effect that (I) such shares of
Common Stock 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 L 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.
(g) 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 L-SCUs, as follows:
(i) At all times during the pendency of the Series L
Exchange Rights, the Company shall
reserve for issuance such number of shares of Common Stock as may be
J-6
195
necessary
to enable the Company to issue such shares in full payment of the Series L
Exchange Consideration in regard to all L-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 L-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 L-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; and
(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 June 12, 2001) 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 its sole discretion, 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 L-SCUs under this Exhibit J and the Partnership Agreement (as reasonably
determined by the board of directors of the Company). The provisions of this
clause (iv) of Paragraph 4(g) shall not prohibit the Company from issuing shares
of its Common Stock or other equity securities or any instrument convertible
into any equity security in lieu of a cash dividend declared by the Company.
(h) All Series L Offered Units tendered to the Company or to
the Operating Partnership, as applicable, in accordance with the exercise of
Series L 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
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 L
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 L 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 L Offered Units to the Company, the transferring holder
thereof shall assume and pay such transfer tax.
J-7
196
(i) Subject to the restrictions on transfer set forth in the
Partnership Agreement and in Paragraph 5 hereof, the Assignee of any holder of
L-SCUs may exercise the rights of such holder of L-SCUs pursuant to this
Paragraph 4, and such holder of L-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 L Exchange Consideration shall be
paid by the Company or the Operating Partnership, as applicable, directly to
such Assignee and not to such holder.
(j) 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 L Exchange Consideration payable thereafter by
the Company pursuant to clauses (B) and (C) of Paragraph 4(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 L Exchange Consideration payable by the Operating
Partnership pursuant to the last sentence of Paragraph 4(b) shall be adjusted
accordingly.
(k) As of the date hereof (i) the Conversion Factor is
1.0 and (ii) the Common Unit Conversion Factor is 1.0.
5. Restrictions on Transfer.
(a) 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) an Approved Transfer of
L-SCUs, and (ii) the admission of any transferee of a L-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 L-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 L-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 L-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.
(b) For the purposes of this Paragraph 5, an "Approved
Transfer" shall mean
J-8
197
(i) any pledge by an initial holder of L-SCUs 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; or
(ii) any transfer by Xxxxxxxx Xxxxxx Park Retail Holdings LLC or its Affiliate
to Xxxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxx, Xxxx X. Xxxxxxxx,
Brothers Four LLC, Xxxxxx X. Xxxx, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxxxx, or to
any trust for their benefit, provided however, that the aggregate number of
holders of record of L-SCUs shall not, as a result of any such transfers, exceed
eight (8).
6. 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.
7. 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 L-SCUs set forth in the Partnership Agreement and this Exhibit
J 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 L-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 L-SCUs herein set
forth shall be deemed dependent upon any other provision thereof unless so
expressed therein.
8. No Preemptive Rights.
No holder of L-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.
[Signature on Next Page]
J-9
198
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 L Special Common Units to be duly executed to be effective this
1st day of June, 2005.
CBL HOLDINGS I, INC.
By:
--------------------------------------------
Name:
Title:
Acknowledged and Agreed:
CBL & ASSOCIATES PROPERTIES, INC.
By: ___________________________
Name:
Title:
J-10
199
Attachment 1 to Exhibit J (Terms of L-SCUs)
Original Holders and Record Holders
Original Holder Record Holder Number of L-SCUs
----------------------------------------------- ---------------------------------------- -----------------------------
Xxxxxxxx Xxxxxx Park Retail Holding LLC Same 285,850 (571,700 after
6/15/05 Stock Split)
J-11
