[DESCRIPTION] EXHIBIT 10 SECOND AMENDED AND RESTATED AGREEMENT
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
June 30, 1998
1
TABLE OF CONTENTS
ARTICLE I. Definitions, Etc.
1.1. Definitions 2
Accountants 2
Acquisition Cost 2
Act 2
Additional Partner 2
Additional Units 2
Adjusted Capital Account Deficit 3
Administrative Expenses 3
Affiliate 4
Agreement 4
Assignee 4
Assumed Liability 4
Audited Financial Statements 4
Bankruptcy 5
Capital Account 6
Capital Contribution 6
Capital Stock 6
CBL 6
Certificate of Limited Partnership 7
Claim 7
Closing Price 7
Code 8
Common Stock 8
Common Stock Amount 8
Common Units 8
Company 9
Consent of the Limited Partners 9
Contributed Property 9
Contribution Date 9
Contributing Partner 9
Control 9
Conversion Factor 10
Current Per Share Market Price 11
Demand Notice 11
Depreciation 11
Entity 11
ERISA 11
Exercise Notice 11
First Restated Agreement 12
General Partner 12
General Partner Loan 12
Gross Asset Value 12
Immediate Family 13
Incentive Option 13
Incentive Option Agreement 13
Joint Venture Partnership 13
Liens 14
Limited Partner Representatives 14
Limited Partners 14
i
Liquidating Transaction 14
Liquidating Trustee 14
Major Decisions 14
Majority-In-Interest of the Limited Partners 14
Management Agreement 15
Management Company 15
Minimum Gain Attributable to Partner
Nonrecourse Debt 15
Net Cash Flow 15
Net Financing Proceeds 16
Net Income or Net Loss 16
Net Sale Proceeds 18
Nonrecourse Deductions 19
Nonrecourse Liabilities 19
Offered ▇▇▇▇▇ ▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 19
Ownership Limit 19
Partner Nonrecourse Debt 19
Partner Nonrecourse Deductions 19
Partners 19
Partnership 19
Partnership Minimum Gain 19
Partnership Units 20
Person 20
Preferred Contributed Funds 20
Preferred Distribution Requirement 20
Preferred Distribution Shortfall 20
Preferred Redemption Amount 20
Preferred Redemption Price 20
Preferred Stock 20
Preferred Unit Designation 20
Preferred Unit Issue Price 21
Preferred Units 21
Properties 21
Property Partnerships 21
Qualified Individual 21
Registered Agent 21
Registered Office 21
Regulations 22
Regulatory Allocations 22
REIT 22
REIT Expenses 22
REIT Requirements 23
Requesting Party 23
Related Issue 23
Responding Party 23
Restricted Partner 23
Rights 23
SEC 23
Securities Act 23
Stock Incentive Plan 23
Substituted Limited Partner 23
Tax Items 23
Trading Day 24
Transfer 24
ii
1.2. Exhibits, Etc. 24
ARTICLE II. Organization
2.1. Continuation 24
2.2. Name 25
2.3. Character of the Business 25
2.4. Location of the Principal Place of Business 26
2.5. Registered Agent and Registered Office 26
ARTICLE III. Term
3.1. Commencement 27
3.2. Dissolution 27
ARTICLE IV. Contributions to Capital
4.1. Partners 27
4.2. General Partner Capital Contribution 28
4.3. Limited Partner Capital Contributions 28
4.4. Issuance of Additional Units 29
4.5. Admission of Additional Partners. 32
4.6. Stock Incentive Plan 33
4.7. No Third Party Beneficiary 34
4.8. No Interest; No Return 34
4.9. Adjustment Upon Conversion of Preferred Stock 34
ARTICLE V. Representations, Warranties and Covenants
5.1. Representations and Warranties 35
5.2. Covenants 36
ARTICLE VI. Allocations, Distributions, and Other Tax and Accounting
Matters
6.1. Allocations, Distributions, and Other Tax
and Accounting Matters 36
6.2. Distributions 36
6.3. Books of Account 38
6.4. Reports 39
6.5. Audits 40
6.6. Tax Elections and Returns 40
6.7. Tax Matters Partner 42
ARTICLE VII. Rights, Duties and Restrictions of the General Partner
7.1. Expenditures by Partnership 43
7.2. Powers and Duties of General Partner 44
7.3. Major Decisions 48
7.4. Actions with Respect to Certain Documents 48
7.5. Reliance by Third Parties 49
7.6. Company Participation 50
7.7. Proscriptions 50
iii
7.8. Additional Partners 51
7.9. Title Holder 51
7.10. Compensation of the General Partner 51
7.11. Waiver and Indemnification. 51
7.12. Limited Partner Representatives 52
7.13. Operation in Accordance with REIT Requirements 53
7.14. Transactions with Affiliates 54
7.15. Other Matters Concerning the General Partner 54
ARTICLE VIII. Dissolution, Liquidation and Winding-Up
8.1. Accounting 55
8.2. Distribution on Dissolution 56
8.3. Timing Requirements 56
8.4. Sale of Partnership Assets 57
8.5. Distributions in Kind 57
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 58
9.2. Transfers by Limited Partners 60
9.3. Restrictions on Transfer 61
ARTICLE X. Rights and Obligations of the Limited Partners
10.1. No Participation in Management 64
10.2. Bankruptcy of a Limited Partner 65
10.3. No Withdrawal 65
10.4. Duties and Conflicts 65
10.5. Limited Liability 66
ARTICLE XI. Grant of Rights to Limited Partners
11.1. Grant of Rights 66
11.2. Terms of Rights 67
ARTICLE XII. Indemnification
12.1. Indemnification of the Limited Partners 67
12.2. Indemnification of the General Partner,
the Company and Others 68
ARTICLE XIII. Arbitration of Disputes
13.1. Arbitration 68
13.2. Procedures 69
13.3. Binding Character 70
13.4. Exclusivity 70
13.5. No Alternative of Agreement 70
iv
ARTICLE XIV. General Provisions
14.1. Notices 70
14.2. Successor 71
14.3. Effect and Interpretation 71
14.4. Counterparts 71
14.5. Partners Not Agents 71
14.6. Entire Understanding; Etc. 72
14.7. Amendments 72
14.8. Severability 73
14.9. Pronouns and Headings 73
14.10. Assurances 74
14.11. Expenses 74
14.12. Waiver of Partition 74
EXHIBITS
A Percentage Interests
B Preferred Unit Designation
C Allocations
D Rights Terms
v
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.
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF
CBL & ASSOCIATES LIMITED PARTNERSHIP
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
is made and entered into as of the 30th day of June, 1998 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 parties desire to amend the First Restated Agreement
in its entirety as set forth in this Agreement.
1
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged,
the parties hereto, intending legally to be bound, hereby agree that the
First Restated Agreement shall be amended and restated in its entirety as
follows:
ARTICLE I.
Definitions, Etc.
1. Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below:
"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.
2
"Adjusted Capital Account Deficit" shall mean with respect to any
Partner, the deficit balance, if any, in such Partner's Capital Account
as of 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)(1) 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
3
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.
"Agreement" shall mean this Second 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.
4
"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, 11 U.S.C. 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 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.
5
"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.
"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.
"CBL" shall mean CBL & Associates, Inc., a Tennessee corporation.
6
"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
7
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 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, the number of shares of Common Stock equal to such number
of Common Units multiplied by the Conversion Factor; provided, however,
that in the event 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"),
then the Common Stock Amount shall also include such additional rights
that a holder of that number of shares of Common Stock would be entitled
to receive.
"Common Units" shall mean the ownership interest of a 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 at 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
8
not include Preferred Units.
"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 of
a 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; provided, however, that except as
otherwise required by the Act, the Consent of the Limited Partners shall
only be required if ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ or his Affiliates collectively
own at least 15% of the then outstanding Common Units.
"Contributed Property" shall have the meaning set forth in Section
4.2(b) hereof.
"Contribution Date" shall have the meaning set forth in Section 4.4
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 an Entity. In the case of a limited
9
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, (ii) subdivides its
outstanding shares of Common Stock, or (iii) combines its outstanding
shares of Common Stock into a smaller number of shares of Common Stock,
the Conversion Factor 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 or combination (assuming for such
purposes that such dividend, distribution, subdivision or combination
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 or combination. Any adjustment to the
Conversion Factor shall become effective immediately after the record
10
date for such event in the case of a dividend or distribution or the
effective date in the case of a subdivision or combination.
"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 1.704-1(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).
"Exercise Notice" shall have the meaning set forth in Schedule 1 to
Exhibit D.
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"First Restated Agreement" shall have the meaning set forth in the
preamble to this Agreement.
"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 at the time of
reference thereto.
"General Partner Loan" shall have the meaning set forth in Section
4.7 hereof.
"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:
1. a Capital Contribution (other than a de
minimis Capital Contribution) to the Partnership by a
new or existing Partner as consideration for
Partnership Units;
2. 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
3. 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
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(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 paragraph (b) above is necessary
or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this
paragraph (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 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
paragraph (c) of the definition of Net Income and Net Loss in
the case of adjustment by Depreciation, and paragraph (d) of
said definition in all other cases.
"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.
"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.
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"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 Representatives" shall have the meaning
set forth in Section 7.12 hereof.
"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 or assigns as a
limited partners hereof, and (ii) any Person who, at the time
of reference thereto, is a limited partner of the
Partnership.
"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.
"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
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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.
"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).
"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, or
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
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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 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
16
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)(1) 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
1.704-1(b)(2)(iv)(e), (f) and (m), the amount of such
17
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 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 recomputated
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 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.
18
"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
Schedule 3 to Exhibit D.
"Office Building" shall mean the 49,250 square foot
office building known as One Park Place located at ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇.
"Ownership Limit" shall have the meaning set forth in
Exhibit D.
"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.
19
"Partnership Units" shall mean the Common Units and the
Preferred Units.
"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.
"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.
20
"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.
"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(f) 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
22
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 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.
"Restricted Partner" shall have the meaning set forth in
Section 1(b) of Exhibit C.
"Rights" shall have the meaning set forth in Section
11.1 hereof.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Stock Incentive Plan" shall mean the Company's 1993
Stock Incentive Plan.
"Substituted Limited Partner" shall have the meaning set
forth in the Act.
"Tax Items" shall have the meaning set forth in Section
3(a) of Exhibit C.
23
"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, and as a verb, shall mean to sell, assign, convey,
pledge, hypothecate, give, encumber or otherwise transfer.
1. 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.
ARTICLE I.
Organization
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 be as
provided in the Act except as otherwise herein expressly
provided. Promptly upon the execution and delivery hereof,
24
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.
1. 1. 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.
1. 2. 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
25
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 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.
1. 3. 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.
1. 4. 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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇ or such other location as the General Partner may
select in its sole and absolute discretion.
26
ARTICLE I.
Term
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.
1. 1. Dissolution. The Partnership shall continue
until dissolved upon the occurrence of the earliest of the
following events:
(a) The withdrawal (as 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 I.
Contributions to Capital
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
27
Partner and a Limited Partner hereunder. The Partnership
shall establish and maintain a separate Capital Account for
each Partner.
1. 1. 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 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.
28
1. 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 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.
1. 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
29
more series of any of such classes, with such designations,
preferences and relative, participating, optional or other
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
30
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 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.
31
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.
(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.
1. 1. 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
32
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 a
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 for the
calendar month in which an admission of any Additional
Partner occurs shall be allocated among all Partners and
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.
1. 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
33
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.
1. 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.
1. 1. 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.
1. 2. Adjustment Upon Conversion of Preferred Stock.
Upon the conversion of any shares of Preferred Stock to
34
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 I.
Representations, Warranties and Covenants
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 with the
execution, delivery and performance of this Agreement
except for those which have been heretofore obtained.
35
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.
1. 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 I.
Allocations, Distributions, and
Other Tax and Accounting Matters
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 hereof, shall be
allocated to the Limited Partners pursuant to the First
Restated Agreement.
1. 1. 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
36
General Partner shall determine. All such distributions
other than distributions of Net Financing Proceeds and
Net Sales Proceeds shall be made in accordance with the
following order of priority:
1. First, to the extent that the amount of
Net Cash Flow distributed to the 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;
2. 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
3. Third, the balance of the Net Cash Flow
to be distributed, if any, shall be distributed to
holders of Common Units, pro rata in accordance with
their proportionate ownership of Common Units.
(b) 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. Distributions of Net
Financing Proceeds and Net Sales Proceeds shall be made,
first to the relevant Partner, on account of the
Preferred Units in accordance with the terms thereof,
and then to the holders of Common Units, pro rata in
accordance with their proportionate ownership of Common
Units. 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
37
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 giving rise to a special allocation
of 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 Sales 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). Upon the receipt by
the General Partner of each Exercise Notice pursuant to
which one or more Limited Partners exercise Rights in
accordance with the provisions of Article XI hereof, the
General Partner shall, unless the General Partner is
required or elects only to issue Common Stock to such
exercising Limited Partner or Limited Partners, cause
the Partnership to distribute to the Partners, pro rata
in accordance with their proportionate ownership of
Partnership Units on the date of delivery of such
Exercise Notice, all (or such lesser portion as the
General Partner shall reasonably determine to be prudent
under the circumstances) of Net Cash Flow, which
distribution shall be made prior to the closing of the
purchase and sale of the Offered Units specified in such
Exercise Notice.
(c) 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 6.2(c).
(d) Notwithstanding the forgoing, all
distributions pursuant to this Section 6.2 shall remain
subject to the provisions of the Certificates of
Designation for each class or series of Preferred Units
set forth in Exhibit B hereto.
1. 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
38
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.
1. 1. 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 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
39
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.
1. 2. 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).
1. 3. 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 a 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 a Transfer of a Partnership Unit, including Transfers made
in connection with the exercise of Rights, made in accordance
with the provisions of the Agreement. The General Partner
shall cause the Accountants to prepare and file all state and
federal tax returns on a timely basis. The General Partner
shall cause the Accountants to prepare and submit to the
Limited Partner Representatives on or before April 1 of each
year for review all federal and state income tax returns of
the Partnership and cause the accountants for the Property
Partnerships (and diligently seek to cause the accountants of
40
the Joint Venture Partnerships not Controlled by the
Partnership) to submit to the Limited Partner Representatives
on or before April 1 of each year for review all federal and
state income tax returns of the Property Partnerships. If
the Limited Partner Representatives determine that any
modifications to the tax returns of the Partnership or any
Property Partnership should be considered, such Limited
Partner Representatives shall, within thirty (30) days
following receipt of such tax returns from the Accountants or
the General Partner, indicate to the Accountants or to the
General Partner to advise the Property Partnership's
accountants the suggested revisions to the tax returns, which
returns shall be resubmitted to the Limited Partner
Representatives for their review (but not approval). The
Limited Partner Representatives shall complete their review
of the resubmitted returns within ten (10) days after receipt
thereof from the Accountants or the General Partner. The
General Partner shall consult in good faith with the Limited
Partner Representatives regarding any proposed modifications
to the tax returns of the Partnership and/or the Property
Partnerships. A statement of the allocation of Net Income or
Net Loss of the Partnership shown on the annual income tax
returns prepared by the Accountants and a statement of the
allocation of Net Income or Net Loss shown on the income tax
return of the Property Partnerships shall be transmitted and
delivered to the Limited Partner Representatives within ten
(10) days of the receipt thereof by the Partnership. The
General Partner shall be responsible for preparing and filing
41
all federal and state tax returns for the Partnership and
furnishing copies thereof to the Partners, together with
required Partnership schedules showing allocations of tax
items and copies of the tax returns of all Property
Partnerships all within the period of time prescribed by law.
1. 4. 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 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
42
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 I.
Rights, Duties and Restrictions of the General Partner
1. Expenditures by Partnership. The General Partner is
hereby authorized to pay compensation for accounting,
administrative, legal, technical, management and other
services 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
43
funds of the Partnership. The Partnership shall also assume,
and pay when due, all Administrative Expenses.
1. 1. 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 wheresoever
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
44
renew or extend leases, to amend, change or modify the
terms and provisions of any leases and to 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 ▇▇▇▇▇▇) 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
45
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;
(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 Partnership's 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, ▇▇▇ 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;
46
(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;
(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
47
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.
1. 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.
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.
48
1. 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.
1. 1. 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
49
claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (ii) the Person
executing and delivering 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.
1. 2. 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.
1. 3. 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;
50
(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.
1. Additional Partners. The General Partner shall have the
right to admit additional Partners to the Partnership in
accordance with the provisions of this Agreement.
1. 1. 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.
1. 2. 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.
1. 3. 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
51
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 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 be 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.
1. Limited Partner Representatives. A Majority-In-Interest
of the Limited Partners shall appoint one or more
representatives ("Limited Partner Representatives").
Whenever, under the terms of this Agreement, matters require
the Consent of the Limited Partners, the same shall mean the
consent of a majority of the Limited Partner Representatives,
and any action taken by the Limited Partner Representatives
52
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, which
shall be irrevocable, to take all action, or to authorize all
action, which the Limited Partners are authorized to take
under the provisions of this Agreement. A
Majority-In-Interest of the Limited Partners shall have the
right, at any time, within their sole discretion, upon not
less than 10 days' prior notice, to replace any of the
Limited Partner Representatives, to appoint a temporary
substitute to act for any Limited Partner Representative
unable to act, or to vest in only one of the Limited Partner
Representatives the sole power to exercise rights of the
Limited Partner Representatives hereunder. The Limited
Partner Representatives shall be appointed or replaced by the
Limited Partners in writing, a copy of which shall be
delivered to the Partners. Any appointments of Limited
Partner Representatives made hereunder shall remain effective
until rescinded in a written notice, 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.
1. 1. 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
53
any federal income or excise tax liability. The Partnership
shall avoid taking any action, or permitting any Property
Partnership 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 the
timing thereof.
1. 2. 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.
1. 3. Other Matters Concerning the General Partner.
A. The General Partner may rely and shall be
protected in acting or refraining from acting upon any
54
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 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 E.
Dissolution, Liquidation and Winding-Up
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
55
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.
1. 1. 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 forgoing, all distributions pursuant to
this Section 8.2 shall remain subject to the provisions of
the Certificates of Designation for each class or series of
Preferred Units set forth in Exhibit B hereto.
56
1. 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.
1. 1. 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 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.
1. 2. 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
57
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.
1. 3. 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.
1. 4. 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 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.
58
ARTICLE
I.
Transfer of Partnership Units
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
59
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 (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.
1. 1. Transfers by Limited Partners.
A. Subject to the provisions of Sections 9.2(b)
and 9.3 hereof, including, without limitation,
compliance with any restrictions or limitations set
forth therein, 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, a bona fide pledgee after a default in
the obligation secured by the pledge, or to a bona fide
purchaser for value from such pledgee, provided that
prior written notice of such proposed transfer is
delivered to the General Partner. No other Transfers 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.
B. No transfer permitted or consented to under
this Section 9.2 (other than pursuant to a statutory
merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a
successor corporation or other Entity by operation of
law) shall relieve the transferor Limited Partner of its
obligations under this Agreement without the approval of
the General Partner, in its sole and absolute
discretion. Upon such permitted or consented to
60
Transfer, the transferee 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
and for any or no reason whatsoever. An Assignee shall
be entitled as a result of such Transfer only to receive
the economic benefits of the Partnership Interest to
which the transferor Limited Partner would otherwise be
entitled, along with such transferor Limited Partner's
rights with respect to the Rights (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 (a) to participate in the management of the
Partnership or to vote on any matter requiring the
consent or approval of the Limited Partners, (b) to
demand or receive any account of the Partnership's
business, or (c) to inspect the Partnership's books and
records, unless and until such Assignee is admitted to
the Partnership as a Substituted Limited Partner. A
transferee of a Partnership Unit may become a
Substituted Limited Partner only upon the satisfaction
of the following conditions: (A) filing with the
Partnership of a duly executed and acknowledged written
instrument of assignment in a form approved by the
General Partner specifying the Partnership Units being
assigned, setting forth the intention of the transferor
Limited Partner that such transferee succeed to the
assignor's interest as a Limited Partner and assuming by
operation of law or express agreement all of the
obligations of the transferor Limited Partner under this
Agreement with respect to such transferred Partnership
Units; (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 adoption by such transferee of the
provisions of this Agreement; (C) obtaining the written
consent of the General Partner as provided in Section
9.2(a) above; 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 subject to the obligations of the transferor
Limited Partner hereunder.
1. 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
61
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 other 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 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,
62
cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to
Department of Labor Regulations Section 2510.2-101; (x) if
such Transfer would result in the Transferor or 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; (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; (xiv) except with the
express written consent of the General Partner, if such
Transfer would result either in 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 Regulations; or (xv) except with
63
the express written consent of the General Partner, to any
entity that is a partnership, grantor trust or S corporation
if (i) 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
(ii) a principal purpose of the use of the tiered arrangement
is to permit the Partnership to satisfy the 100-person
limitation in paragraph (h)(1)(ii) of Section 1.7704-1 of the
Regulations.
ARTICLE I.
Rights and Obligations of the Limited Partners
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 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;
64
(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.
1. 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 terms 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 with
Article IX hereof.
1. 1. 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.
1. 2. 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
65
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.
1. 3. 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
▇.
▇▇▇▇▇ of Rights to Limited Partners
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
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
66
contained in Exhibit D hereto, upon delivery to the Company
of an Exercise Notice, which notice shall specify the number
of Common Units to be exchanged by such Limited Partner.
Once delivered, the Exercise Notice shall be irrevocable,
subject to delivery by the Company or the General Partnerof
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.
1. 1. Terms of Rights. The terms and provisions
applicable to the Rights shall be as set forth in attached
Exhibit D.
ARTICLE
I.
Indemnification
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
67
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.
1. 1. 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
I.
Arbitration of Disputes
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 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 be resolved by binding
arbitration in New York, New York, in accordance with this
Article XIII and, to the extent not inconsistent herewith,
68
the Expedited Procedures and Commercial Arbitration Rules of
the American Arbitration Association or any successor
thereto.
1. 1. 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 "Big 6"
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 "Big 6" 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 "Big 6" 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
69
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 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.
1. 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.
1. 1. 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.
1. 2. No Alternative 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.
70
ARTICLE I.
General Provisions
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 of
this Section 14.1, the address of the General Partner shall
be: One Park Place, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇ (telecopier number (▇▇▇) ▇▇▇-▇▇▇▇) and the address
of each of the Limited Partners shall be c/o CBL &
Associates, Inc., One Park Place, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (telecopier number (423)
490-8662). The address of any party hereto may be changed by
a notice in writing given in accordance with the provisions
hereof.
1. 1. 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.
1. 2. Effect and Interpretation. This Agreement
shall be governed by and construed in conformity with the
laws of the State of Delaware.
71
1. 3. 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.
1. 4. 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.
1. 5. Entire Understanding; Etc. This Agreement
constitutes the entire agreement and understanding among the
Partners and supersedes any prior understandings and/or
written or oral agreements among them respecting the subject
matter within.
1. 6. 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)
72
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:
1. 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;
2. to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance
with this Agreement;
3. 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);
4. 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
5. to satisfy any requirements, conditions,
or guidelines 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.
1. 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.
73
1. 1. 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".
1. 2. Assurances. Each of the Partners shall
hereafter execute and deliver such further instruments and do
such further acts and things as may be required or useful to
carry out the intent and purpose of this Agreement and as are
not inconsistent with the terms hereof.
1. 3. 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.
1. 4. 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 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
74
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.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement or caused this Agreement to be executed as of
the date and year first above written.
GENERAL PARTNER:
CBL HOLDINGS I, INC.
By: __Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
LIMITED PARTNERS:
CBL HOLDINGS, II, INC.
By:____Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board, President
and Chief Executive Officer
CBL & ASSOCIATES, INC.
By:____Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board, President
and Chief Executive Officer
CBL EMPLOYEES PARTNERSHIP/▇▇▇▇▇▇
By: CBL & Associates, Inc.
Managing Partner
By:____Charles B. Lebovitz____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board, President
and Chief Executive Officer
75
COLLEGE STATION ASSOCIATES
By:____Charles B. Lebovitz____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Managing Partner
FOOTHILLS PLAZA PARTNERSHIP
By: Mortgage Services, Inc.
Managing Partner
By:___John N. Foy_______
▇▇▇▇ ▇. ▇▇▇, President
____John N. Foy_____
▇▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇ ROAD PARTNERSHIP
By: CBL & ASSOCIATES, INC.,
Managing Partner
By:_____Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board, President
and Chief Executive Officer
____Ben S. Landress______
▇▇▇ ▇. ▇▇▇▇▇▇▇▇
____Alan L. Lebovitz____
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
____Charles B. Lebovitz____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
___Charles B. Lebovitz____
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
___Michael I. Lebovitz____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
76
___Stephen D. Lebovitz___
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
TRUST U/W ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ F/B/O
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ET AL
By:___Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Trustee
By:____Faye L. Israel_______
▇▇▇▇ ▇. Israel,
Trustee
By:___Ralph Schumacker______
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Trustee
TRUST U/W ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ F/B/O
▇▇▇▇ ▇. ISRAEL, ET AL
By:___Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Trustee
By:____Faye L. Israel______
▇▇▇▇ ▇. Israel,
Trustee
By:___Ralph Shumacker_____
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
Trustee
___Mark D. Mancuso______
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___Eric P. Snyder_______
▇▇▇▇ ▇. ▇▇▇▇▇▇
77
___Augustus N. Stephas_____
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
WAREHOUSE PARTNERSHIP
By: CBL & Associates, Inc.,
Managing Partner
By:___Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Chairman of the Board, President
and Chief Executive Officer
___Jay Wiston_________
▇▇▇ ▇▇▇▇▇▇
___James L. Wolford___
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
SOLELY FOR PURPOSES OF SECTIONS
4.6,5.2, 7.6, 7.13 9.3 and 12.2,
ARTICLEs XI, XIII AND XIV AND
EXHIBIT D HEREOF:
CBL & Associates Properties, INC.
By:___Charles B. Lebovitz_____
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
78
EXHIBIT A
EXHIBIT B
To be provided by the General Partner pursuant to the terms
of the Agreement.
CERTIFICATE OF DESIGNATION
OF
9.0% SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS
OF
CBL & ASSOCIATES PROPERTIES, 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 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 "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.
2. Dividends and Distribution Rights.
(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 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 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 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 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 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 (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 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
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
periods 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 other units of capital
stock of the Operating Partnership ranking junior to or on a
parity with the Series A 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 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 be 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 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 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 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.
(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 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 of 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
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 not be
convertible into or exchangeable for any other property or
units of the Operating Partnership.
7. Ranking.
The 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
preferences 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 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
IN WITNESS WHEREOF, CBL Holdings
I, Inc. has caused this
Certificate of Designation of Series A Cumulative Redeemable
Preferred Units to be duly executed by its Executive Vice
President and Chief Financial Officer this _____ day of June,
1998.
CBL Holdings I, Inc.
By
▇▇▇▇ ▇▇▇
Executive Vice President
and Chief Financial
Officer
EXHIBIT C
Allocations
1. Allocation of Net Income and Net Loss.
(a) Except as otherwise provided herein, Net Income and Net Loss
of the Partnership for each tax year shall be allocated among the
Partners in the follow 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(c)
(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 subparagraph
(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) Any remaining Net Income and Net Losses shall be
allocated among the Partners in accordance with their proportionate
ownership of Common Units (except as otherwise required by the
Regulations).
(iv) Notwithstanding subparagraphs (i), (ii) and (iii), Net
Income and Net Losses from a Liquidation Transaction shall be
allocated as follows:
First, Net Income (or Net Losses) 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;
Second, Net Income (or Net Losses) shall be allocated
among the Partners so that the Capital Accounts of the
Partners (excluding from the Capital Account of any Partner
the amount attributable to its Preferred Units) are
proportional to the number of Common Units held by each
Partner; and
Third, any remaining Net Income (and Losses) shall be
allocated among the Partners in accordance with their
proportionate ownership of Common Units.
2. Special Allocations.
Notwithstanding any provisions of paragraph 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
paragraph (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 paragraph (a) shall
be made in proportion to the respective amounts required to be allocated
to each Partner pursuant hereto.
(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 Section 1.704-2(i).(4) and (j)(2). This
paragraph (b) in intended to comply with the minimum gain chargeback
requirement with respect to Partner Nonrecourse Debt contained in said
section of the Regulations and shall be interpreted consistently
therewith. Allocations pursuant to this paragraph (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 Section 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 paragraph (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 Deduction. 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.
(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 Section 1.704-2(b)(4) and (i)(1).
(f) Curative Allocations. The Regulatory Allocations (as defined
below) shall be taken into account in allocating other item of income,
gain, loss, and deduction among the Partners so that, to the extent
possible, the cumulative net amount of allocations of Partnership items
under paragraphs 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. This subparagraph (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 paragraph 2.
3. Tax Allocations.
(a) Generally. Subject to paragraphs (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 but 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 Clause
(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
paragraph (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. The General Partner will not specially
allocate Tax Items (other than the Section 704(c) Tax Items) to cure for
the effect of the ceiling rule. 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.
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 through 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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 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 ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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 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
▇▇▇▇▇▇▇ 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 the ▇▇▇▇▇▇▇ 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 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 (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.
"▇▇▇▇-▇▇▇▇▇ Act" shall mean the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ 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) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 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
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 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.
"Registration Rights" shall mean the registration rights
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 ▇▇▇▇▇▇▇ 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.
"▇▇▇▇▇▇▇ Group" shall mean (i) ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 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
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 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 Rights 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.
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 ▇▇▇▇-▇▇▇▇▇ 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 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 or 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 ▇▇▇▇▇▇▇ Group shall terminate, to the extent necessary to
reduce the Constructive Ownership of the members of the Lebovitz Group or
the ▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ 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:
(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.
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.
EXHIBIT D
SCHEDULE 1
EXCHANGE NOTICE
To: CBL & Associates Properties, Inc.
Reference is made to that certain Second Amended and Restated
Agreement of Limited Partnership of CBL & Associates Limited Partnership
dated June __, 1998 (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: ___________________
Exercising Partner
Number of
Offered
Units
Exercising Partners:
_________________________
_________________________
EXHIBIT D
SCHEDULE 2
ELECTION NOTICE
To: All Exercising Partners
Reference is made to that certain Second Amended and Restated
Agreement of Limited Partnership of CBL & Associates Limited Partnership
dated June __, 1998 (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 & ASSOCIATES PROPERTIES, INC.,
a Delaware corporation
By:_______________________________
Its: _________________________
EXHIBIT D
SCHEDULE 3
REGISTRATION RIGHTS
EXHIBIT D
SCHEDULE 4
GRANDFATHERED RELATED PARTY TENANTS