FIRST AMENDMENT TO THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CBL & ASSOCIATES LIMITED PARTNERSHIP

Limited Partnership Agreement

You are currently viewing:

This Limited Partnership Agreement involves

CBL &| ASSOCIATES PROPERTIES INC | CBL Holdings I, Inc | CBL Holdings II, Inc

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: FIRST AMENDMENT TO THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CBL & ASSOCIATES LIMITED PARTNERSHIP
Date: 11/22/2005
Industry: Real Estate Operations

Exhibit 10.1.7

FIRST

AMENDMENT TO

THIRD AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

CBL & ASSOCIATES LIMITED PARTNERSHIP

------------------------------------------------------------------------------

Dated as of November 16, 2005

------------------------------------------------------------------------------

THIS FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF CBL & ASSOCIATES LIMITED PARTNERSHIP (this "Amendment")

is hereby adopted by CBL Holdings I, Inc., a Delaware corporation (the "General

Partner"), as the general partner of CBL & Associates Limited Partnership, a

Delaware limited partnership (the "Partnership"), and by CBL Holdings II, Inc.,

a Delaware corporation, a limited partner of the Partnership representing a

Majority-In-Interest of the Limited Partners of the Partnership (the "Limited

Partner"). For ease of reference, capitalized terms used herein and not

otherwise defined have the meanings assigned to them in the Third Amended and

Restated Agreement of Limited Partnership of CBL & Associates Limited

Partnership, dated as of June 15, 2005 (the "Agreement").

WHEREAS, the General Partner desires to establish and set forth the

terms of a new series of Partnership Units designated as Series K Special Common

Units (the "K-SCUs").

WHEREAS, Section 4.4(a) of the Agreement grants the General Partner

authority to cause the Partnership to issue Partnership Units in the Partnership

to any Person in one or more classes or series, with such designations,

preferences and relative, participating, optional or other special rights,

powers and duties as may be determined by the General Partner in its sole and

absolute discretion so long as the issuance does not violate Section 9.3 of the

Agreement.

WHEREAS, the General Partner desires to amend the Agreement to, among

other things, set forth the terms of the K-SCUs.

WHEREAS, Sections 4.4(a) and 14.7(b) of the Agreement grant the General

Partner power and authority to amend the Agreement (including, without

limitation, the distribution and allocation provisions thereof) without the

consent of any of the Partnership's Limited Partners to evidence any action

taken by the General Partner pursuant to Section 4.4(a) and to set forth the

rights, powers and duties of the holders of any Additional Units issued pursuant

to Section 4.4(a).

WHEREAS, Section 14.7(a) of the Agreement provides for the amendment of

the Agreement with the approval of the General Partner and the Consent of the

Limited Partners, subject to the limitations set forth therein.

NOW, THEREFORE, the General Partner, with the Consent of the Limited

Partners, hereby amends the Agreement as follows:

<PAGE>

1. Section 1.1 of the Agreement is hereby amended and supplemented as set

forth below:

(a) The following definitions are hereby deleted and replaced

with the following:

"Common Unit Conversion Factor" shall mean 1.0, provided,

that, in the event that the Partnership (i) makes a

distribution to all holders of its Common Units in Common

Units (other than a distribution of Common Units pursuant to

an offer to all holders of Common Units, SCUs S-SCUs, L-SCUs,

and K-SCUs permitting each to elect to receive a distribution

in Common Units in lieu of a cash distribution (such a

distribution of Common Units is referred to herein as a

"Distribution of Common Units in Lieu of Cash")), (ii)

subdivides or splits its outstanding Common Units (which shall

expressly exclude any Distribution of Common Units in Lieu of

Cash), or (iii) combines or reverse splits its outstanding

Common Units into a smaller number of Common Units (in each

case, without making a comparable distribution, subdivision,

split, combination or reverse split with respect to the SCUs,

S-SCUs, L-SCUs or K-SCUs), the Common Unit Conversion Factor

in effect immediately preceding such event shall be adjusted

by multiplying the Common Unit Conversion Factor by a

fraction, the numerator of which shall be the number of Common

Units issued and outstanding on the record date for such

distribution, subdivision, split, combination or reverse split

(assuming for such purposes that such distribution,

subdivision, split, combination or reverse split occurred as

of such time), and the denominator of which shall be the

actual number of Common Units (determined without the above

assumption) issued and outstanding on the record date for such

distribution, subdivision, split, combination or reverse

split. Any adjustment to the Common Unit Conversion Factor

shall become effective immediately after the record date for

such event in the case of a distribution or the effective date

in the case of a subdivision, split, combination or reverse

split.

"Common Stock Amount" shall mean, with respect to any number

of Common Units, SCUs, S-SCUs, L-SCUs or K-SCUs, the number of

shares of Common Stock equal to such number of Common Units,

SCUs, S-SCUs, L-SCUs or K-SCUs, as the case may be, multiplied

by the Conversion Factor; provided, however, that in the event

that the Company issues to all holders of Common Stock rights,

options, warrants or convertible or exchangeable securities

entitling the shareholders to subscribe for or purchase

additional Common Stock, or any other securities or property

of the Company, the value of which is not included in the

first sentence of the definition of Closing Price of the

shares of Common Stock (collectively, "additional rights"),

other than a right to receive a dividend or other distribution

of Common Stock that corresponds to Common Units issued to the

Company pursuant to a Distribution of Common Units in Lieu of

Cash, then the Common Stock Amount shall also include, other

than with respect to any Common Units, SCUs, S-SCUs, L-SCUs or

K-SCUs "beneficially owned" by an "Acquiring Person" (as such

terms are defined in the Company's Rights Agreement, dated as

of April 30, 1999, as amended and as it may be further amended

from time to time, and any successor agreement thereto), such

additional

<PAGE>

rights that a holder of that number of shares of

Common Stock would be entitled to receive.

"Conversion Factor" shall mean 1.0, provided that in the event

that the Company (i) pays a dividend on its outstanding shares

of Common Stock in shares of Common Stock or makes a

distribution to all holders of its outstanding Common Stock in

shares of Common Stock (in either case other than a dividend

or other distribution of shares of Common Stock that

corresponds to Common Units issued to the Company pursuant to

a Dividend of Common Units in Lieu of Cash), (ii) subdivides

or splits its outstanding shares of Common Stock, or (iii)

combines or reverse splits its outstanding shares of Common

Stock into a smaller number of shares of Common Stock (in each

case, without making a comparable dividend, distribution,

subdivision, split, combination or reverse split with respect

to the Common Units, the SCUs, S-SCUs, L-SCUs or K-SCUs), the

Conversion Factor in effect immediately preceding such event

shall be adjusted by multiplying the Conversion Factor by a

fraction, the numerator of which shall be the number of shares

of Common Stock issued and outstanding on the record date for

such dividend, distribution, subdivision, split, combination

or reverse split (assuming for such purposes that such

dividend, distribution, subdivision, split, combination or

reverse split occurred as of such time), and the denominator

of which shall be the actual number of shares of Common Stock

(determined without the above assumption) issued and

outstanding on the record date for such dividend,

distribution, subdivision, split, combination or reverse

split. Any adjustment to the Conversion Factor shall become

effective immediately after the record date for such event in

the case of a dividend or distribution or the effective date

in the case of a subdivision, split, combination or reverse

split.

"Partnership Units" shall mean the Common Units, the Preferred

Units, the SCUs, the S-SCUs, the L-SCUs and the K-SCUs.

(b) The following definitions are hereby added to Section 1.1 of

the Agreement: "K-SCUs" shall have the meaning set forth in

Exhibit K.

"K-SCU Basic Distribution Amount" shall mean, with respect to

an K-SCU, $.7125/quarter and, commencing with the fifth full

calendar quarter following the issuance of the K-SCUs,

$.7422/quarter; provided, however, that such amount will be

adjusted appropriately to account for any unit splits,

combinations or other similar events with respect to the

K-SCUs

"Series K Exchange Notice" shall have the meaning set forth

in Exhibit K

"Series K Exchange Rights" shall have the meaning set forth in

Exhibit K.

"Series K Offered Units" shall have the meaning set forth in

Exhibit K.

<PAGE>

2. Pursuant to Sections 4.5 and 7.8 of the Agreement, upon execution of a

Limited Partner Acceptance of the Partnership Agreement in the form attached

hereto as Attachment 1 (a "Limited Partner Acceptance") or by causing a Limited

Partner Acceptance to be executed on its behalf, each initial holder of K-SCUs

automatically will be admitted as an Additional Partner of the Partnership,

without any further action or approval and the General Partner hereby agrees to

cause the names of such recipients to be recorded on the books and records of

the Partnership on the date of such admission.

3. Sections 6.2(d), 6.2(e), 6.2(f) and 6.2(g) of the Agreement are hereby

renumbered as Sections 6.2(e), 6.2(f), 6.2(g) and 6.2(h), respectively, and

cross references to those provisions in other provisions of this Agreement shall

be deemed amended accordingly to the extent not expressly amended hereby.

4. The following shall be added as new Section 6.2(d) of the Agreement:

"(d) Distributions shall also be made in accordance with the

following order of priority:

(i) Concurrently, ratably and on parity with the distributions

to holders of SCUs, S-SCUs and L-SCUs provided for under

Sections 6.2(a)(iii), 6.2(b)(i) and 6.2(c)(i), respectively,

to the extent that the amount of Net Cash Flow distributed to

the holders of K-SCUs for any prior quarter was (for any

reason, including as a result of Section 6.2(e), a lack of

legally available funds or a decision by the General Partner

not to make distributions for such quarter) less than the

amount required to be distributed for such quarter on account

of the K-SCUs pursuant to subparagraph (ii) below, and such

shortfall has not been subsequently distributed pursuant to

this Section 6.2(d)(i), Net Cash Flow shall be distributed to

the holders of K-SCUs until they have received an amount per

K-SCU, as applicable, necessary to satisfy such shortfall for

all prior quarters of the current and all prior Partnership

taxable years;"

"(ii) Concurrently, ratably and on parity with the

distributions to holders of SCUs, S-SCUs and L-SCUs provided

for under Sections 6.2(a)(iv), 6.2(b)(ii) and 6.2(c)(ii), Net

Cash Flow shall be distributed among the holders of K-SCUs

until they have received for the quarter to which the

distribution relates an amount for each outstanding K-SCU

equal to the applicable K-SCU Basic Distribution Amount;

(iii) Concurrently, ratably and on parity with the

distributions to holders of SCUs, S-SCUs, L-SCUs and Common

Units provided for under Sections 6.2(a)(v), 6.2(b)(iii) and

6.2(c)(iii), the balance of the Net Cash Flow to be

distributed, if any, shall be distributed to holders of K-SCUs

pro rata in accordance with their proportionate ownership of

the aggregate number of SCUs, S-SCUs, L-SCUs, K-SCUs and

Common Units outstanding (counting each SCU, S-SCU, L-SCU or

K-SCU as the number of Common Units into which it is

convertible pursuant to the terms of Exhibit E, Exhibit H,

Exhibit J or Exhibit K, as applicable), provided, however,

that such distribution to the holders of K-SCUs shall:

<PAGE>

(A) be made only after the quarterly distributions on

account of each Common Unit under Section 6.2(a)(v)

for each of the four previous consecutive quarters

shall have been greater than the applicable K-SCU

Basic Distribution Amount in each of such quarters;

and

(B) be reduced by the amount of the distribution made

to such Holders on account of their K-SCUs with

respect to such quarter pursuant to subparagraph

(d)(ii) above and the reduction will be allocated

among the holders of K-SCUs pro rata in accordance

with their respective percentage interests in the

total number of K-SCUs then outstanding.

(iv) Notwithstanding the foregoing, all distributions pursuant

to this Section 6.2(d) shall remain subject to the provisions

of (i) each Certificate of Designation for any class or series

of Preferred Units, (ii) Exhibit E hereto with respect to the

SCUs, (iii) Exhibit H hereto with respect to the S-SCUs, (iv)

Exhibit J hereto with respect to the L-SCUs, and (v) Exhibit K

hereto with respect to the K-SCUs.

5. New Section 6.2(f) (formerly Section 6.2(e) is hereby amended and

replaced with the following:

(f) Notwithstanding the foregoing, all distributions pursuant

to this Section 6.2 shall remain subject to the provisions of

the Certificate of Designation for each class or series of

Preferred Units set forth in Exhibit B hereto, Exhibit E

hereto with respect to the SCUs, Exhibit H hereto with respect

to the S-SCUs, Exhibit J hereto with respect to the L-SCUs and

Exhibit K hereto with respect to the K-SCUs.

6. Section 6.6 of the Agreement shall be amended by replacing the words

"(or Series J, Series S or Series L Exchange Rights)" with the words "(or Series

J, Series S, Series L or Series K Exchange Rights)".

7. The last sentence of Section 8.2 of the Agreement is hereby deleted and

replaced in its entirety with the following:

"Notwithstanding the foregoing, all distributions pursuant to

this Section 8.2 shall remain subject to the provisions of (i)

the Certificate of Designation for each class or series of

Preferred Units set forth in Exhibit B hereto; (ii) Exhibit E

hereto with respect to the SCUs; (iii) Exhibit H hereto with

respect to the S-SCUs; (iv) Exhibit J hereto with respect to

the L-SCUs; and (v) Exhibit K hereto with respect to the

K-SCUs."

8. The following paragraph is added as Section 9.2(f) of the Agreement:

"(f) The applicable Approved Transfers permitted in Paragraph

8 of Exhibit K hereto shall also be available, mutatis

mutandis, to holders of any Common Units issued in exchange

for or upon the redemption of K-SCUs."

<PAGE>

9. Exhibit A of the Agreement is hereby deleted and is replaced in its

entirety by new Exhibit A attached hereto as Attachment 2.

10. Exhibit C of the Agreement is hereby deleted and is replaced in its

entirety by new Exhibit C attached hereto as Attachment 3.

11. Except as expressly amended hereby, the Agreement shall remain in full

force and effect. [Signatures on Next Page]

[Signatures on Next Page]

<PAGE>

IN WITNESS WHEREOF, the General Partner has executed this Third

Amendment as of the date first written above.

CBL HOLDINGS I, INC.

By: /s/ John N. Foy

--------------------------------------

Name: John n. Foy

Title: Vice Chairman of the Board

and Chief Financial Officer

Accepted and Agreed:

CBL & ASSOCIATES PROPERTIES, INC.

By:/s/ John N. Foy

--------------------------------------------------

Name: John N. Foy

Title: Vice Chairman of the Board and

Chief Financial Officer

Consented to:

CBL HOLDINGS II, INC.

By:/s/ John N. Foy

--------------------------------------------------

Name: John N. Foy

Title: Chairman of the board and Chief

Financial Officer

<PAGE>

Attachment 1

Form of

Acknowledgement Regarding

Issuance of Partnership Interests

and Assumption of Partnership Agreement

FOR VALUABLE CONSIDERATION, the receipt and sufficiency of which are

hereby acknowledged, the undersigned partnership, CBL & ASSOCIATES LIMITED

PARTNERSHIP, a Delaware limited partnership having an address of CBL Center,

2030 Hamilton Place Boulevard, Suite 500, Chattanooga, Tennessee 37421 (the

"Partnership"), does hereby acknowledge that there has been acquired by and

issued to _____________________, a _______________ having an address of

__________________ ("Contributor"), the partnership interests denoted as Series

K Special Common Units ("K-SCUs") containing the terms and characteristics and

as described on Schedule A, attached hereto and made a part hereof, being

interests as a limited partner in and of the Partnership on the books of the

Partnership, together with any and all right, title and interest in any

property, both real and personal, to which the K-SCUs relate and any other

rights, privileges and benefits appertaining thereto. The Partnership and

Contributor acknowledge that the issuance of the K-SCUs to Contributor (i) is in

consideration for Contributor's contribution of certain limited liability

company interests in ________________ to the capital of the Partnership as set

forth in that certain Contribution Agreement among Contributor, the Partnership

and Eastland Investments, L.P. and other contributors dated October 17, 2005

(the "Contribution Agreement"), and (ii) is being made in accordance with, and

subject to the parties' respective representations and warranties contained in

the Contribution Agreement.

Contributor further acknowledges by execution hereof that the issuance

of the K-SCUs to, and the acquisition and ownership of the K-SCUs by,

Contributor is subject to all of the terms and conditions of the Third Amended

and Restated Agreement of Limited Partnership of CBL & Associates Limited

Partnership dated June 15, 2005, as amended by the First Amendment to Third

Amended and Restated Agreement of Limited Partnership of CBL & Associates

Limited Partnership dated as of November 16, 2005 and as the same may be further

amended from time to time (the "OP Agreement"), and Contributor, by execution of

this Acknowledgement, agrees to abide by and be bound by all of the terms and

conditions of the OP Agreement as a limited partner and holder of K-SCUs of the

Partnership.

<PAGE>

ATTACHMENT 1 CONTINUED

IN WITNESS WHEREOF, the Partnership and Contributor have executed this

Acknowledgement as of the _____ day of __________, 2005.

PARTNERSHIP: CBL & ASSOCIATES LIMITED PARTNERSHIP

a Delaware limited partnership

By: CBL Holdings I, Inc.,

its general partner

By: _________________________

Name: _______________________

Title: ______________________

ACCEPTANCE

The Contributor hereby acknowledges its acceptance of the K-SCUs and

agrees to be bound by and subject at all times to all of the terms and

conditions of the OP Agreement, which Agreement is incorporated herein by

reference, as a limited partner and holder of K-SCUs of the Partnership.

DATED as of the _____ day of __________, 2005.

CONTRIBUTOR: ______________________________________ ,

a ____________________________________

By: _______________________________

Name: ____________________________

Title: _____________________________

<PAGE>

ATTACHMENT 1 CONTINUED

SCHEDULE A

DESCRIPTION OF THE INTERESTS

[to be attached as Exhibit K]

EXHIBIT K

TERMS

SERIES K SPECIAL COMMON UNITS

CBL & ASSOCIATES LIMITED PARTNERSHIP

(the "Operating Partnership")

Pursuant to Section 4.4 of the

Third Amended and Restated Partnership Agreement of

the Operating Partnership

WHEREAS, Section 4.4 of the Third Amended and Restated Partnership

Agreement of the Operating Partnership, dated June 15, 2005 (as amended by a

First Amendment, dated November 16, 2005, and as the same may hereafter be

amended as permitted therein and herein, the "Partnership Agreement") grants CBL

Holdings I, Inc., the general partner of the Operating Partnership (the "General

Partner"), authority to cause the Operating Partnership to issue interests in

the Operating Partnership to persons other than the General Partner in one or

more classes or series, with such designations, preferences and relative,

participating, optional or other special rights, powers and duties as may be

determined by the General Partner in its sole and absolute discretion. (For ease

of reference, capitalized terms used herein and not otherwise defined have the

meanings assigned to them in the Partnership Agreement.)

NOW THEREFORE, the General Partner hereby designates a series of

priority units and fixes the designations, powers, preferences and relative,

participating, optional or other special rights, and the qualifications,

limitations or restrictions thereof, of such priority units, as follows:

Section 1. Designation and Amount. The units of such series shall be

designated "Series K Special Common Units" (the "K-SCUs") and the number of

units constituting such series shall initially be 1,144,924. The Operating

Partnership may not issue any additional K-SCUs unless (i) the issuance is

required by the terms hereof, or (ii) it has obtained the prior written consent

of the holders of record of a majority of the outstanding K-SCUs ("Majority

Holders"). The rights and obligations of the K-SCUs shall be as set forth herein

(to the extent not inconsistent with the Partnership Agreement) and in the

Partnership Agreement. Nothing in the foregoing shall be deemed to limit the

right and power of the General Partner to cause the Operating Partnership to

issue securities otherwise designated to the fullest extent permitted under the

terms of the Partnership Agreement and this Exhibit K.

<PAGE>

ATTACHMENT 1 CONTINUED

Section 2. Distribution Rights.

(a) Holders of K-SCUs shall be entitled to receive, when, as and if

declared by the General Partner distributions with respect to the K-SCUs in the

manner and to the fullest extent set forth in the Partnership Agreement.

(b) Distributions with respect to the K-SCUs shall be payable on the

dates designated by the General Partner for the payment of distributions to the

holders of Common Units. Any distribution payable on the K-SCUs for the quarter

in which the K-SCUs are first issued will be prorated and computed on the basis

of a 360-day year consisting of twelve 30-day months. Distributions will be

payable to holders of record of the K-SCUs as they appear in the records of the

Operating Partnership at the close of business on the applicable record date,

which shall be the record date designated by the General Partner for the payment

of distributions for such quarter to the holders of Common Units.

respect to the K-SCUs as described in Section 6.2(d)(i) of the Partnership

Agreement, none of the Operating Partnership, the General Partner or the REIT

will redeem, purchase or otherwise acquire for any consideration (or any moneys

be paid to or made available for any sinking fund for the redemption of any such

units) any Common Units or any other units of interest in the Partnership that

by their terms rank junior as to distributions to the rights of the K-SCUs

(except by conversion into or exchange for shares of Common Stock of the REIT or

other units of the Operating Partnership ranking junior to the K-SCUs as to

distributions).

(d) Distributions with respect to the K-SCUs are intended to qualify as

permitted distributions of cash that are not treated as a disguised sale within

the meaning of Treasury Regulation 1.707-4, and the provisions of this Exhibit K

shall be construed and applied consistent with such Treasury Regulations.

Section 3. Special Distribution upon Liquidation. Upon any voluntary or

involuntary liquidation, dissolution or winding-up of the affairs of the

Operating Partnership, the holders of K-SCUs shall be entitled to be paid out of

the assets of the Operating Partnership legally available for distribution to

its unit holders an amount equal to any distribution shortfall with respect to

the K-SCUs described in Section 6.2(d)(i) of the Partnership Agreement, before

any distribution or payment shall be made to holders of Common Units or any

other series of Partnership Units ranking junior to the K-SCUs as to liquidation

rights. In the event that, upon such voluntary or involuntary liquidation,

dissolution or winding-up, the available assets of the Operating Partnership are

insufficient to pay such amount on all outstanding K-SCUs, then the holders of

the K-SCUs shall share ratably in any such distribution of assets, based on the

number of K-SCUs held by each such holder. Holders of K-SCUs shall be entitled

to written notice of any such liquidation. In addition, upon any voluntary or

involuntary liquidation, dissolution or winding-up of the affairs of the

Operating Partnership, after any such distribution shortfall on account of the

K-SCUs shall have been paid in cash, the K-SCUs shall be treated as if they had

been exchanged for Common Units pursuant to the terms of Paragraph 7(b) hereof.

The consolidation or merger of the Operating Partnership with or into any

partnership, limited

<PAGE>

ATTACHMENT 1 CONTINUED

liability company, corporation, trust or other entity shall

not be deemed to constitute a liquidation, dissolution or winding-up of the

Operating Partnership.

Section 4. Optional Redemption.

(a) At any time after the occurrence of both (i) November 16, 2015 and

(ii) achievement by the Operating Partnership of the Distribution Benchmark, the

Operating Partnership, at its option upon not less than thirty (30) nor more

than sixty (60) days' written notice, may redeem the K-SCUs, in whole or in

part, on the first Business Day following any record date established for the

determination of parties entitled to receive any distributions being made to

holders of K-SCUs. Such redemption shall be made by (i) paying in cash to the

holders of K-SCUs with respect to their K-SCUs being redeemed, any distribution

shortfall with respect to the K-SCUs described in Section 6.2(d)(i) of the

Partnership Agreement outstanding on the date of redemption (whether or not

declared) and (ii) issuing to the holders thereof a number of Common Units equal

to the Common Unit Amount. If fewer than all of the outstanding K-SCUs are to be

redeemed, the K-SCUs to be redeemed shall be redeemed pro rata (as nearly as may

be practicable without creating fractional units) or by lot or by any other

equitable method determined by the Operating Partnership. Holders of K-SCUs to

be redeemed shall surrender the certificates evidencing such K-SCUs, if any, at

the place designated in the Operating Partnership's notice and shall be entitled

to the distribution payments and Common Units described in the second sentence

of this Paragraph 4(a) prior to or concurrently with such surrender. From and

after the redemption date distributions shall cease to be payable with respect

to such K-SCUs, such K-SCUs shall no longer be deemed outstanding and all rights

of the holders of such units will terminate, except the right to receive the

distribution payments and Common Units described in the second sentence of this

Paragraph 4(a). For purposes hereof, the term "Distribution Benchmark" shall

mean when the quarterly distributions paid over a period of four (4) consecutive

quarters pursuant to Sections 6.2(d)(ii) and (iii) of the Partnership Agreement

per K-SCU then outstanding shall have equaled or exceeded the K-SCU Basic

Distribution Amount.

(b) Notwithstanding the provisions of Paragraph 4(a) above, unless full

cumulative distributions on all K-SCUs shall have been or contemporaneously are

paid in cash or a sum sufficient for the payment thereof in cash set apart for

payment for all past distribution periods and the then current distribution

period or portion thereof, no K-SCUs shall be redeemed unless all outstanding

units of K-SCUs are simultaneously redeemed.

mailed by the Operating Partnership by registered mail, return receipt

requested, not less than thirty (30) nor more than sixty (60) days prior to the

redemption date, addressed to the respective holders of record of the K-SCUs to

be redeemed at their respective addresses as they appear on the records of the

Operating Partnership. Failure to give such notice or any defect thereto or in

the mailing thereof shall not affect the validity of the proceedings for the

redemption of any K-SCUs. Each notice shall state (i) the redemption date; (ii)

the total number of K-SCUs to be redeemed and the number of K-SCUs held by such

holder to be redeemed; (iii) the Common Unit Amount; (iv) the place or places

where K-SCUs are to be surrendered for payment of any distribution shortfall

with respect to the K-SCUs described in Section 6.2(d)(i) of the Partnership

Agreement

iii

<PAGE>

ATTACHMENT 1 CONTINUED

outstanding thereon and the issuance of a number of Common Units equal

to the Common Unit Amount; and (v) that distributions on the K-SCUs to be

redeemed shall cease to be payable on such redemption date.

(d) All K-SCUs redeemed pursuant to this Paragraph 4 shall be deemed

retired and terminated from and after the redemption date.

(e) The K-SCUs shall have no stated maturity and shall not be subject

to any sinking fund or mandatory redemption except as otherwise provided in this

Section 4.

(f) As used herein, the term "Common Unit Amount" shall mean, with

respect to any number of K-SCUs, the number of Common Units equal to such number

of K-SCUs multiplied by the Common Unit Conversion Factor; provided, however,

that in the event that the Operating Partnership issues to all holders of Common

Units rights, options, warrants or convertible or exchangeable securities

entitling such holders to subscribe for or purchase additional Common Units, or

any other securities or property of the Operating Partnership (collectively,

"Common Unit Additional Rights"), other than a right to receive Common Units

pursuant to a Distribution of Common Units in Lieu of Cash (as defined below),

then the Common Unit Amount shall also include (other than with respect to any

Common Units or K-SCUs "beneficially owned" by an "Acquiring Person" (as those

terms are defined in the Company's Rights Agreement, dated as of April 30, 1999,

as amended through the date hereof and as it may be further amended from time to

time, and any successor agreement thereof (collectively, the "Rights

Agreement"))), such Common Unit Additional Rights that a holder of that number

of Common Units would be entitled to receive. As used herein, the term "Common

Unit Conversion Factor" shall mean 1.0, provided, that, in the event that the

Operating Partnership (i) makes a distribution to all holders of its Common

Units in Common Units (other than a distribution of Common Units pursuant to an

offer to all holders of Common Units and K-SCUs permitting each to elect to

receive a distribution in Common Units in lieu of a cash distribution (such a

distribution of Common Units is referred to herein as a "Distribution of Common

Units in Lieu of Cash")), (ii) subdivides or splits its outstanding Common Units

(which shall expressly exclude any Distribution of Common Units in Lieu of Cash,

but which may include any other distribution of Common Units), or (iii) combines

or reverse splits its outstanding Common Units into a smaller number of Common

Units (in each case, without making a comparable distribution, subdivision,

split, combination or reverse split with respect to the K-SCUs), the Common Unit

Conversion Factor in effect immediately preceding such event shall be adjusted

by multiplying the Common Unit Conversion Factor by a fraction, the numerator of

which shall be the number of Common Units issued and outstanding on the record

date for such distribution, subdivision, split, combination or reverse split

(assuming for such purposes that such distribution, subdivision, split,

combination or reverse split occurred as of such time), and the denominator of

which shall be the actual number of Common Units (determined without the above

assumption) issued and outstanding on the record date for such distribution,

subdivision, split, combination or reverse split. Any adjustment to the Common

Unit Conversion Factor shall become effective immediately after the record date

for such event in the case of a distribution or the effective date in the case

of a subdivision, split, combination or reverse split.

<PAGE>

ATTACHMENT 1 CONTINUED

Section 5. Voting Rights.

(a) Holders of the K-SCUs shall have the voting rights set forth herein

and in the Partnership Agreement.

(b) So long as any K-SCUs remain outstanding, the Operating Partnership

shall not, without the affirmative vote or consent of the holders of a

majority of the K-SCUs outstanding at the time, given in person or by

proxy, either in writing or at a meeting (such series voting separately

as a class):

(i) undertake, consent to, or otherwise participate in or acquiesce to

any recapitalization transaction (including, without limitation, an

initial public offering, a merger, consolidation, other business

combination, exchange, self-tender offer for all or substantially all

of the Common Units, or sale or other disposition of all or

substantially all of the Operating Partnership's assets) (each of the

foregoing being referred to herein as a "Recapitalization Transaction")

unless in connection with such a Recapitalization Transaction (x)

either each K-SCU outstanding prior to the Recapitalization Transaction

will (A) remain outstanding following the consummation of such

Recapitalization Transaction without any amendment to the rights and

obligations of holders of the K-SCUs that is materially adverse to the

holders of K-SCUs (as reasonably determined by the Board of Directors

of the Company) or (B) be converted into or exchanged for securities of

the surviving entity having preferences, conversion and other rights,

voting powers, restrictions, distribution rights and terms and

conditions of redemption thereof materially no less favorable than

those of a K-SCU under this Exhibit K and the Partnership Agreement (as

reasonably determined by the Board of Directors of the Company), and

(y) each holder of K-SCUs shall have the option to convert its K-SCUs

into the amount and type of consideration and/or securities receivable

by a holder of the number of Common Units into which such holder's

K-SCUs could have been exchanged immediately prior to the consummation

of the Recapitalization Transaction pursuant to Paragraph 6(b) hereof

upon the

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates