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